COMMISSIONER OF INCOME-TAX, GUJARAT versus ASHOKBHAI CHIMANBHAI

758

COMMISSIONER OF INCOME-TAX, GUJARAT v. ASHOKBHAI CHIMANBHAI October 20, 1964 (K. SUBBA RAO,]. C. SHAH ANDS. M. SiKRI JJ.)

Income-lax Act, (11 of 1922), ss. 3 and 4--Trading fim1--Profits of

individual p"r/ners-Time of accrual.

Its manager v.-as a partner The assessce \\.'as a ffindu undivided family. in a firm and the family was entitled to his of lhc profi1s. The partnership agreement ;lrovided that the accounls of the firm should be adjusted c\"ery caJendar year, that is, on the 31st December of each year. On November 12, 1955, by a deed of partition, the family and its properly were divided and it v;as declared that the manager became exclusively Jn pro- entitled to the profits in the parlnership from 1st January 1955. ceedings for assessment for 1955-56, the corresponding previous year for the assessee being 27th October 1954 to 14th !'<ovcmbcr 1955. the assesscc contended that the share in the profi1s of 1hc partnership should not he included in ils taxable income because (i) under the partition deed the protils belonged to the quondam manager exclusively from Jst January 1955 and, (ii) since the partnership made up ils accounts at the end of the cctlendar year, the assessee had no interest in the share of the profits which accrued exclusively to its quondam manager al the end of the )'car. The lncon1e-tax Officer rejocted the contentions. The Appell<1tc Assistant Com- missioner and the Appellate Tribunal held that since there was a disruption in the family only oa 12th November 1955, the profits had to he appor- tioned be1"'·een the assessee and its manager. The J-ligh Court on a refer- ence. held in favour of the assessee accepting the second contention. The c·on11nic;sioner

to the Supreme Court.

HELD : The profits accrued to the quondam manager only on 31st December 1955, though they were the resu1t of transactions spread over the entire period of the c;1Jcndar year 1955. Since on that elate the assessec had, because of the parti1ion deed, no interest in the profits or any part thereof, the assessee was not liable to pay any tax on those profi1s. [766 C-D; 769 D-El

Jn the grOss receipts of a business day after day or from transaction to transaction lie embedded or dormant profit or loss. On such dormant profits or loss, undoubtedly, tar.able profits_ if any, of the business will be computed. But dormant profits cannot be equated with accrued profits charged to tax under ss. 3 and 4 of the Income-tax Act, 1922. The concept of accrual of profits of a business involves the determiaation by the method of accounting at the end of the accounting year or any shorrer period determined by lav.·; and unless a right to the profits comes into existence, there is no accrual of profits. Jn the case of a partnership, v.·hcrc, by a covenant binding between the parties, the accounts arc to be made at intervals. the right of a partner to demand his share of the profits docs not arise until the contingency under the covenant which gi\·es rise to that right, has arisen. [762 E-F; 765 H, 766 A]

E. D. Sa.r.'ioon & Ca. Ltd., v. Com1nissioner of Income-tax, Bombay

City, [1955], I S.C.R. 313, followed.

In re: The Spanish Pro.<pec1i111? Co. Ltd. [191 l] 1 Ch_ 92 and Bho11llal Laherchand v. Comn:issioner of Income-tax, Bombay City, 28 J.T.R. 919, referred to.

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C.I.T. v. ASHOKBHAI (Shah /.)

759

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Turner Morrison &: Co. Ltd. v. Commissioner of

West Bengal [1953] S.C.R. 520 and Du/ichand Laxminarayan v. Commissioner of ln•ome-tax, Nagpur, [1956] S.C.R. 154, explained.

CML APPELLATE °JURISDICTION: Civil Appeal No. 817 of

1963.

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Appeal from the judgment and order dated April 17, 1961

of the Gujarat High Court in l.T.R. 21 of 1960.

K. N. Rajagopal Sastri, R. H. Dhebar and R. N. Sachthey for

the appellant.

The respondent did not appear. The Judgment of the Court was delivered by Shah J. The respondent was. a Hindu undivided family con- sisting of Ashokbhai-the manager-his wife Shobhana and his minor son Chirag. Ashokbhai was a partner in a firm styled Messrs Amrit Chemicals with a share of five annas in every rupee It is common ground that the beneficial in the profit and loss. interest in the profits of the firm falling to the share of Ashokbhai belonged to the undivided family. The year of account of the Hindu undivided family was the Samvat year-1st of Kartika to 30th Ashwin. The year of account of Messrs Amrit Chemicals was the calendar year according to the Gregorian calendar.

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By deed dated November 12, 1955,

the Hindu undivided family was disrupted, and the property of the family was divided. The following are the material clauses of the deed of partition:-

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"4. There is joint family property of the joint family of Seth Ashokbhai Chimanbhai of the First Part. Out of that we are making a partial partition of the property as hereinafter stated, particulars whereof are as follows:- ( a) in the Partnership Firm in the name of the Amrit Chemicals five annas share out of sixteen annas in the rupee including goodwill together with the bene- fit and liability in respect of the profit and loss relating to five annas share in a rupee of sixteen annas made by the said firm from 1-1-1955 of the value of about Rs. 70,001.

8. The Partnership Firm of the Amrit Chemicals has been in existence from 1-1-1946 and a deed of partner- ship dated 14-8-1946 has been made in respect of the said partnership and according to the said deed there

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760

SUPRl!MI! COURT Rl!PORn

(I 96SJ I S.C.R.

is a share of five annas in a rupee of sixteen annas in the profit and loss of the said Finn in the name of Seth Ashokbhai Chimanbhai.

Seth Ashokbhai Chimanbhai has become the full owner of the said share henceforth and all !he rights under the said deed of partnership are to be enjoyed by Seth Ashokbhai Chimanbhai party of the First Part himself. Similarly, any liability under the said deed is to be borne and discharged by Seth Ashokbhai Chiman- bhai party of the rirst Part.

The account of the profit and Joss of the said part· nership Firm from 1-1-1955 remains to be made up and on the making of such accounts whatevi;r profit or loss the partnership Firm may have made thereout Seth Ashokbhai Chimanbhai shall be the full owner and res- ponsible for a five annas share out of the rupee of sixteen annas." In proceedings for

for 1955-56--the corresponding previous year being October 27, lg54 to November 14, 1955- the Hindu undivided family-hereinafter called "the assessee .. - <:ontended that the share in the profits of Messrs. Amrit Chemicals for the calendar year which accrued on or after December 31, 1955 belonged to Ashokbhai in his individual capacity and was E not liable to be included in the taxable income of the assesscic, because it had been declared under the partition deed to belong el\clusively to Ashokbhai as from January 1, 1955, and that in any event since the firm made up its accounts at the end of the <:alendar year, the assessee had no interest in the share of profits for the calendar year 1955 which accrued at the end of that F year to Ashokbhai in his individual capacity. The Income-Lal\ Officer ordered that Rs. 21,051 received by Ashokbhai as five annas share in the profits of the firm be included in the computation of the total income of the assessee. the Appellate Assistant Commissioner held that on November 12, 1955 Ashok- bhai ceased to represent the Hindu undivided family and the share G ot profits received from the firm had to be apportioned between the assessee and Ashokbhai. This order was confirmed by the Income-tu Appellate Tribunal.

In appeal

The Tribunal submitted a statement of case on the following

question to the High Court of Gujarat :

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''Whether on the facts and circumstances of this case the 5 annas share of the income of Amrit Chemical£

C.I.T. v. ASHOKBHAI (Shah !.)

761

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or any part thereof for the year 1-1-1955 to 31-12-1955 accrued to the assessee and whether it could be charged in its hands?"

The High Court agreed with the Revenue authorities that Ashok- bhai had become full owner of the five annas share in Messrs Amrit Chemicals with effect from November 12, 1955 and not B before, but upheld the alternative contention that no part of the share of profits which accrued to Ashokbhai on December 31, J 955 was liable to be included in the income of the assessee, because on the date of accrual the assessee had no interest in those profits, and recorded a negative answer to the question referred.

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Ashokbhai represented the assessee in the firm Me5srs. Amrit Chemicals till November 12, 1955, and thereafter he became by virtue of the deed of partition the sole owner of the five annai share in the firm. The beneficial interest of the assessee in the profits of Messrs. Amrit Chemicals therefore ceased only on the D execution of the deed of partition and not before. The Appellate Assistant Commissioner and the Tribunal held that the share in the profits of the firm for the year 1955 was liable to be appor- tioned between the assessee and Ashokbhai as an individual- the assessee being entitled to a fraction of the profits equal to the fraction which the period January 1, 1955 to November 12, It was also held by the 1955 bears to the calendar year 1955. Revenue authorities that the settlement of accounts of Messrs. Amrit Chemicals did not give rise to a debt due by a third person to Ashokbhai. The argumP,nt assumes that in the gross receipts in respect of any trading transaction carried on by an individual F or a firm lies dormant some element of profit, and to that element of profit attaches immediately the. charge to tax and it is not deferred till the date on which profits as a result of the transac- tions of the accounting year are ascertained after taking into con- the business outgoings at the end of ihe year on maldni up accounts. This argument raises an important question about the time of accrual of profits to individual partners in a trading firm. Do the profits in a trading venture carried on by a firm accrue to the partners of the firm from day to day or from tran- to transaction, or when the accounts are made, and a right to receive the profits arises under the covenants of the deed of partnership?

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Under the Income-tax Act, income is taxable when it acl'TUCll, arises or is received, or when it is by fiction deemed to accrue, arise or is deemed to be received. Receipt is not the only

7 ll 2

SUPREME COURT REPORTS

[1965) l S.C.R.

of chargeability to tax; if income accrues or arises it may become A liable to tax. For the purpose of this case it is unnecessary dilate upon the distinction between income "accruing" and "aris- ing". But there is no doubt that the two words are used to contradistinguish the word "receive''. is s'!id to be received when it reaches the assessee: when the right :to receive the income becomes vested in the assessee, it is said to accrue or arise. Fletcher Moulton L.J., in In re The Spanish Prospect- ing Co. Ltd.(') observed at p. 98:

Income

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"The word 'profit' has .

. a well-defined legal meaning and this meaning coincides with the funda- mental conception of profits in general parlance; although in mercantile phraseology the word may at times bear meanings indicated by the special context which deviate in some respects from this fundamental signification. Profit implies a comparison between· the state Qf a business at two specific dates usually sepa- rated by an interval of a year. The fundamental mean- ing is the amount of gain made by the business during the year. This can only be ascertained by a compari- son of the

at the two dates."

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In the gross receipts of a business day after day or from tran- saction to transaction lie embedded or dormant profit or loss: on such dormant profit or loss undoubtedly taxable profits, If any. of the business will be computed. But dormant profits j:annot be equated with profits charged to tax under ss. 3 and 4 'of the Income-tax Act. The concept of accrual of profits of a business involved the determination by the method of accounting at the end of the accounting year or any shorter period determined by law. If profits accrue to the assessee directly from the business the question whether they accrue de die, in diem or at the. close of' the year of account has at best an academic significance, but when upon ascertainment of profits the right of a person to a share therein is determined, the question assumes practical importance, for it is only on the right to receive profits or income, profits If there is no right, no profits will be accrue to that person. deemed to have accrued. This principle was applied by this Court in E.D. Sassoon & Co. Ltd. v. The Commissioner of Income-tax Bombay-City('). The material facts bearing on that principle were these: E.D. Sassoon & Co. Ltd.--<:alled 'Sassoons' -were the managing agents of a Company which may be called

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(1) (1911! 1 Ch. 92.

(2) (1955! 1 S.C.R. 311.

C.I.T. v. ASHOKBHAI (Shah J.)

763

D sible, and the remuneration or commission fell due

A "the United Mills" and were entitled to receive a percentage of annual net profits of the Company as their remuneration. On December I, 1943 Sassoons assigned to Messrs. Agarwal & Co. their office as managing agents and all their rights and benefits under. the managing agency agreement. Accounts of the manag- ing agency commission payable to the managing agerits for the B calendar year 1943 were made up in 1944 and commission for the whole year was paid to Messrs. Agarwal & Co., thereafter. In the course of assessment proceedings· of Sassoons it was debated whether in respect of commission earned by the managing agency, tax was payable on the entirety of the commission by C Messrs. Agarwal & Co. or by Sassoons or it was liable to be apportioned between Messrs. Agarwal & Co. and Sassoons. that Messrs. This Court held (Jagannal(lhadas J. dissenting) Agarwal & Co. alone were liable to pay tax on the whole of the remuneration received under the contract of service between the United Mills, because the managing agency was entire and indivi- the managing agents, only on completion of a definite period of service and at stated periods it being a condition of recovery of wages or salary that the service or duty should be completely performed. Remuneration as managing agents constituted according to the Court "a debt" only at the end of each such E period of service and no remuneration or commission was pay- able to the managing agents for broken periods. After referring to the observations of Fletcher Moulton L.J., in the Spanish Prospecting Co. Ltd.'s case(') Bhagwati J., observed that "it would be absurd to suggest that the profits o( the company could accrue from day to day or even from month to month". The F working of the company from day to day could certainly not indicate any profit or loss, even the working of the company from month to month could not be taken as . a reliable guide for this purpose. If the profit or loss has to be ascertained by a comparison of the assets at two stated points, the most business- like way would be to do so at stated intervals of one year and that would be a reasonable period to be adopted for the purpose. In the case of large business concerns the working of the com- pany during a particular month may show profits and the working in another month may show loss. The business during the earlier part of the year may show profit or loss and in the later part of the year may show loss or profit which would go to counter- balance the profit or loss as the case may be iii the earlier part

to

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(1) [1911] I Ch. 92.

794

SUPREME COURT REPORTS

[ l 965] 1 s.c.1t.

It would therefore be reasonable to determine the ·of the year. profit or loss as the case may be at the end of every year so that on such calculation of net profits the managing agents may be paid their remuneration or commission at the percentage stipu- lated in the managing agency agreement and the also be paid dividends out of the net profits of the company.

Counsel for the Commissioner submitted that the judgment in E.D. Sassoon Co. Ltd.'s case( 1 ) proceeded upon the special character of a managing agency agreement and did not purport to lay down a general rule that accrual of income depends on quantification, or that right to payment of an ascertainable amount does not arise till accounts are made. Counsel also sub- mitted that in sale transactions of a trading venture profits accrue to the trader from transaction to transaction and are embedded in each transaction carried on by the trader, and the charge im- pmC(] by s. 4(1 )(a) is not deferred till settlement of accounts. On that premise, counsel said, that profits dormant or embedded in the transactions carried on by Messrs. Amrit Chemicals accrued from transaction to transaction till November 12, 1955 and properly belonged to the assessee and were liable to be taxed in the hands of the osscsscc notwithstanding any subsequent disposi- tion of those profits by the assessee. In support of his conten- relied upon Turner Morrison & Co. I.rd. v. Com- tion counsel missioner of Income-tax, West Bengul(')-a case decided by this Court. In that case an Indian company received collllllission on sales effected in India of goods received from a foreign com- pany. The Indian Company handled the cargo arnving at Cal- cutta and made disbursements in connection therewith, collected and after deducting expenses including their commission remitted It was held by this Court the balance to the foreign principal. lhat the income, profits and gains derived from sale of goods by the Indian Company in British India were assessable to tax undcc- s. 4 ( I )(a) as income, profits and gains received in the taxable territories by the company on behalf of the foreign principal. The Court in that case observed at pp. 529-530 :

· "There can, therefore, be no question that when the gross sale proceeds were received by the agen!S io:India they necessarily received whatever income, profits· and P.ains were lying dormant or hidden or otherwise em- herlded in them. Of course, if on the taking of accounts it be found that there was no prpfit during the year

(I) (195SJ I S.C.R. 313.

(2) (1951) S.C.R. sn

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C.!.T. V. ASHOKBHAI (Shah J.)

765

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then the question of receipt of income, profits and gains would not arise but if there were income, profits and gains, then the proportionate part thereof attributable to the sale proceeds received by the agents in India were income, profits and gains received by them at the moment the gross sale proceeds were received by them in India and that being the position the provisions of section 4 (l )(a) were immediately attracted and the income profits and gains so received became chargeable to tax under section 3 of the Act."

These observations were, it may be noticed, made in rejecting the c contention raised by Counsel for the tax-payer that in the gross sale proceeds received by him in India, there was no income at alL Counsel for the Indian company said that the gross sale proceeds were merely credit items in the account and that several amounts were to be debited in the same account and if there remained any credit balance, such balance alone could be regard- D od as stamped with the formal impress of income capable of being dealt with as such: income could therefore be said to have been received only at that stage. The Court did propound that when sale proceeds are received in which is embedded income, that income will enter the ultimate computation of the total profits assessable to tax. But that is not to say that the profits E accrue or arise to a trader from day to day or from transaction to transaction. The observation that to the income, profits and gains embedded in the gross receipts s. 4 ( 1) was immediately attracted also does not warrant the inference that the Court intended to lay down that profits accrue to a tax-payer before the right thereto has come into existence. "Profits" as pointed out in E. D. Sassoon F Co. Ltd.'s case(') do not accrue from day to day or even from month to month and have to be ascertained by a comparison of assets at two stated points. The Court also pointed out in that case that the test for ascertaining whether profits have accrued or arisen is whether the person who is entitled thereto has a right to

G claim the profits.

It is true that E. D. Sassoon Co. Ltd.'s case(') related to a managing agency transaction and the Court said that the manag- ing agency being "a service contract one and indivisible" until the entire contract is performed, no right to remuneration arises. But the principle of the case is that unless a right to profits comes into In the case of a partner- the

ship, where by a covenant binding between the partners

there is no accrual of .profits.

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(I) (1955] I S.C.R. 313.

766

SUPREME COURT REPORTS

[1965) l S.C.R.

accounts are to be made at stated intervals, the right of a partner A to demand his share of the profits does not arise until the contin- gency which by operation of law or under a covenant of the In the present partnership deed gives rise to that right has arisen. case by cl. 11 of the partnership agreement the accounts Jf the firm had to be adjusted every year, and accounts for the calendar year 1955 were not and could not be adjusted before December B 31, 1955. By the covenant in the deed of partnership Ashokbh11i was entitled to receive the share of profits at the time when the accounts were adjusted. Before the agreed date, he had, under the deed of partnership, no right, unless the other partners agreed, to claim that the accounts be adjusted. H the profits arose on the settlement of accounts on December 31, 1955, Ashokbhai C alone was the owner of those profits and the assessee had no right therein. Those profits were undoubtedly the result of transac- tions spread over the entire period of the calendar year 1955, but if the profits did not arise from day to day or from transaction to transaction, destination of the profits must be determined by the D title thereto on the day on which they arose. H the a%essee ae<1uired no right in the share of profits received by Ashokbhai, the taxing authorities could not claim that the profits still be apportioned between the assessee and Ashokbhai and tax 'hould be levied on the apportioned income. In our judgment, income becomes taxable on the footing of accrual only after the E right of the tax.-payer to the income accrues or arises, and in the case of an agreement which makes profits receivable at or on the harpening of a contingency, the fact that the profits are the result of transactions spread over a period which covers a period preced- ing the happening of that contingency would not make the receipt liable to be paid to persons other than those who are entitled IO F receive it on the date on which it is actually received or became receivable.

Counsel for the Commissioner contend that under the Indian system of law a partnership is not a body distinct from the mem- bers composing it and that whatever may be the outlook of lay- G men concerning partnership, except for certain specific purposes it is established that a firm is not an entity or person m law but is merely an association of individuals, a firm name being only a collective name of those individuals who have agreed IC' carry on business in partnership; and therefore when income accrued to the firm in respect of each transaction it must be deemed to accrue H to the individual partners of the firm as well, and accrual is not postponed till the making up of accounts. Counsel relied upon

C.I.T. v. ASHOKBHAI (Shah J.)

767

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the observations made by this Court in Dulichand Laxmmarayan v. Commissioner of Income-tax, Nagpur('). In Dulichand's case(') it was held that deed evidencing a partnership of which the partners were an i_ndividual, a joint Hindu family and three firms could not be registered under s. 26-A of the Income-tax Act. But it cannot be iµferred therefrom that whenever the partnership receives gross receipts in respect of its tmsiness transaction in that which is embedded some profit or loss of the partnership, profit or loss results immediately on the gross receipts reaching the partnership to the individual partners in their aliquot shares. right Normally for profit to accrue or arise, there should be a C either under the statute or under contract between the tax-payer and others which entitles the former to make a demand for those profits.

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Bhogilal Laherchand v. Commissioner of Income-tax BomblII/ In ) on which the High Court relied may be referred to. City( 2 Bhogila/'s case('> under a deed of partnership a father carried on D a business in partnership with his sons. Two of his minor sons were admitted to the benefits of the partnership. One of the minor sons named Arvind attained majority on August 22, 1950, and a fresh partnership deed was executed on August 28, 1950. Under the partnership deeds--Old as well as new-accounts were to be taken and the' profit or loss was to be ascertained on the Divali day of each Samvat year. Arvind died on August 31, 1950, and his share in the profits as ascertained on August 31, 1950 was Eought to be added under s. 16(3) of the Income-tax Act, 1922, to the income of his father_ on the footing that the amount constituted income of a minor child of the assessee which arose from the F admission of that niinor child to the benefits of the partnership. The Court held that as Arvind had agreed to remain a partner after attaining majority and under the terms of the partnership profit or loss was to be ascertained only on the Divali day of each year. it was impossible to predicate whether the partnership had made any profit or loss, on any date prior to the date of Divali in G any year and as the right to recei\'.e a share of the profits arose on the death of Arvind the share of profit could not be treated a, income which arose directly or -indfrectly to Arvind during his minority so as to make it liable to be included under s. 16 ( 3) in the assessment of the father. Chagla C.J., in delivering the judgment of the Court referred to E. D. Sassoon Co. Ltd.'s case( 1 ) H and observed that though income may accrue Q.r arise to an

(1) [1956] S.C.R. 154.

(2) (1955) 28 I.T.R. 919.

(3) (1955] 1 S.C.R. 313.

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768

SUPREME COURT REPORTS

[1965] I S.C.R.

In so holding, the learned Chief

to the effect that "income may accrue B

assessee before he actually receives it, income cannot accrue or A arise to him until he acquires a right to receive it; and unless and until there is created in favour of the asscssee a debt due by somebody, it cannot be said that be has acquired a right to receive the income. Justice quoted a passage from the judgment of Bhagwati J., in £. D. Sassoon Co. Lrd.'s to an assessee without the actual receipt of the same.

If the acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right, to receive the income. There must be a debt C owed to him by somebody. There must be as is otherwise ex- pressed debirum in praesenti, so/vendwn in futuro . ..... Unless and until there is created in favour of the assessee a debt due by somebody it cannot be said that he has acquired a right to receive the income or that income has accrued to him".

It \yas urged by Counsel for the Commissioner that between D

the partners collectively and individual partner there can be no relation of a debtor and creditor and therefore the principle enun- ciated by this Court in £. D. Sassoon Co. Ltd.'s case( 1 ) has no application to cases where a partner receives his share of the profits of the firm on making up the account of the partnership. But the principle of E. D. Sassoon Co. Ltd.'s easel'\ is that income E accrues or arises when a right thereto comes into existence and If that be the correct ratio, and we think it is, the not before. argument that a partnership is nothing but a compendious name for partners involving the corollary that a partner cannot be a creditor of the partnership will have no practical impact.

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In Bhogi/al's case( 2

) the position was substantially the same as in the present case. On Arvind attaining the age of majority and electing to continue as a partner be became entitled to all the rights and obligations of a partner since be was admitted to the benefits of the partnership and also to receive his share of profits G 4Xlmputed at the end of the year as regulated by the partnership deed. On the death of Arvind the partnership stood dissolved aild accounts had to be made up on August 31, 1950. But the earliest date on which Arvind's estate became entitled to a share in the profits was after he attained the age of majority: it was therefore not income which arose directly or indirectly in favour H of a rninor child so as to attract the application of s. 16(3) of the

(t) [19SS1 I S.C.R. 313.

(2) (19SS) 28 I.T.R. 919.

C.I.T. v. ASHOKBHAI (Shah I.)

76&

A Income-tax Act.

It must be noticed that in Bhogi/al's case('), income was earned by the firm in Samvat year 2006, and Arvind attained the age of majority before the end of that year. The Revenue authorities sought to apportion the spare of Arvind in the income, and sought to render the father liable for that part of the income which it was claimed was properly attributable to the B part of the year during which Arvind was a minor, but that claim was rejected and the entire share of Arvind in the profits was held oot taxable under s. 16(3) as part of the income of his father.

In the present case at the date when Ash'lkbhai acquired the joint C family and his share of the profits was not received by him on

right to receive a share of profits, there was no subsisting

behalf of the assessee.

There was in this case no assignment of the profits which bad already accrued to the assessee. Profits accrued to Ashokbhai and on the date on which they accrued the assessee had because D of the deed of partition no interest in the profits. The Revenue authorities could not claim that profits which under the insti:u- ment of partition did not accrue or arise to Ashokbhai as repre- senting the Hindu undivided family must for purposes of taxation be so deemed. The High Court was, therefore, right in answer- ing the question in the negative.

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The appeal fails and is dismissed.

A opeal dismissed.

(I} (195S) 28 LT.R. 919.