COMMISSIONER OF INCOME-TAX, GUJARAT vs ASHOKBHAI CHIMANBHAI

The Supreme Court held that under the Income-tax Act, 1922, specifically Sections 3 and 4, profits from a partnership accrue only when a right to those profits comes into existence. In this case, the profits were deemed to have accrued to the quondam manager of a Hindu undivided family only on December 31, 1955, after a partition deed was executed, thus the family had no interest in those profits for the assessment year 1955-56. Consequently, the assessee was not liable to pay tax on those profits, affirming the High Court's decision.