Shri M. S. Manvi as karta of his HUF was partner in three firms. share income belonged to HUF. There was partition in family on 19-10-1971. Subsequent to this partition, another partnership firm was formed in which coparceners of erstwhile family became partners. income of firm was share income from three firms, earlier referred to in which Shri Manvi formerly represented HUF but now represents coparceners. firm was also granted registration. income of firm was divided between partners and taxed in their hands. 2. argument was raised before ITO that income of firm is not taxable as it has already been taxed in hands of other firms and so it amounted to double taxation. This was negatived by ITO. 3. In appeal, AAC held as follows: "The contention is obviously not acceptable. Shri M. S. Manvi was partner in three registered firms during relevant year. share incomes of Shri Manvi from these firms have been assessed by ITO in impugned order in hands of sub-partnership firm M. S. Manvi. Clearly firm cannot be made partner in another firm. It is also clear from relevant partnership deed that Shri M. S. Manvi has been made partner in firms in his individual capacity only. Therefore, in ordinary course share incomes from three firms should have been assessed on M. S. Manvi in his individual status. What individual does with income after receipt thereof is only application of income. But apparently ITO did not assess income on individual in view of he diversion of income by overriding title, i.e., under agreement of sub-partnership. In such cases income becomes assessable in hands of sub-partnership and this is what ITO has done. I cannot agree with representative's view that in such cases shares income should not be assessed at all. appeal is, therefore, dismissed." assessee is in appeal. 4. argument raised before authorities below was repeated before u s . learned departmental representative relied upon order of authorities below: Having heard both sides, we hold that appeal filed by assessee should fail. Shri M. S. Manvi is partner in three firms, namely, karnataka Theatres, Karnataka Enterprises and Vijay Textiles. Earlier share income was being assessed in hands of HUF. After partition, share income does not go to Shri Manvi exclusively but to all coparceners. coparceners for their own convenience decided to have share income assessed in hands of firm and then got it distributed as partners of second firm. argument that sub-partnership also has paid tax and, therefore, there is double taxation is not tenable. Having formed sub- partnership, it is not possible to avoid paying registered firm's tax. If assessee wanted to avoid tax paid by sub-partnership, it could have straightway offered appropriate shares of coparceners from three firms originally consolidated in hands of M. S. Manvi for direct assessment in hands of respective coparceners. Having chosen to first consolidate share incomes in hands of sub-partnership and then to divide it, firm cannot say that it is doubly taxed. Moreover, when tax paid by registered firm is allowed as deduction in hands of partners before allocation of share income to partners, charges of double taxation fails. In result, appeal is dismissed. *** M.S. MANVI v. ADDITIONAL INCOME TAX OFFICER