Punjab-Haryana High Court
Commissioner Of Income-Tax vs Shri Amar Nath Bhatia on 9 March, 1984
Equivalent citations: [1984]148ITR701(P&H)
JUDGMENT M.R. Shaema, J.
1. Amar Nath Bhatia as karta of the joint Hindu family formed a partnership firm with his minor sons, namely, Rajiv Kumar and Ajay Kumar. The business of the firm was being carried on under the name and style of Messrs United Steel Products, Panipat. The Income-tax Officer clubbed the income of Rajiv Kumar and Ajay Kumar with the income of Amar Nath Bhatia under Section 64(1)(ii) of the I.T. Act, 1961. In appeal, the Income-tax Appellate Tribunal, Chandigarh Bench, deleted from the income of the assessee the income derived by his two minor sons on the ground that since Amar Nath Bhatia had not become a member of the partnership firm in his individual capacity, the aforementioned provision of law was not attracted. At the instance of the Commissioner of Income-tax, Haryana, Rohtak, the following question of law has been referred to us for our opinion :
"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal has been in error in holding that the share income of the assessee's minor children from the firms in which he was a partner representing his HUF and not in his individual capacity, could not be clubbed and aggregated with his individual income under Section 64(1)(ii) of the Act?"
2. In CIT v. Anand Sarup [1980] 121 ITR 873 (P & H), a similar question came up for consideration before a Division Bench of this court. The Bench observed (p. 877) :
"It is well known that what is being taxed under the I.T. Act, is the income of a person, which includes an individual, a HUF, a company, a firm and an association of persons or a body of individuals, whether incorporated or not, a local authority and other artificial juristic persons not falling within the preceding categories. Section 64 of the Income-tax Act, 1961 (hereinafter called 'the Act'), provides that in computing the total income of any individual, there shall be included all such income as arises directly or indirectly--(i) to the spouse of such individual from the membership of the spouse in a firm carrying on a business in which such individual is a partner; (ii) to a minor child of such individual from the admission of the minor to the benefits of partnership in a firm. The word 'assessee', as defined in Section 2(7) of the Act, means a person by whom any tax or any other sum of money is payable under this Act and includes every person who is deemed to be an assessee under any provisions of this Act. From these provisions, it is apparent that the question is of the income of an individual and the concept of an individual has a different connotation from a HUF and other categories which are included in the definition of 'person' under Section 2(31) of the Act.
The word 'assessee' is wide enough not only to cover an individual but also a HUF, a company or a local authority and every firm and other association of persons or the partners of the firm or the members of the association individually. The section talks of only income of any individual capable of having a wife or minor children or both. It, therefore, necessarily excludes from its purview a group of persons forming a unit or a corporation created by a statute."
3. The learned counsel for the Revenue has brought to our notice a contra view taken by a Full Bench of the Allahabad High Court in Sahu Govind Prasad v. CIT [1983] 144 ITR 851. We are, however, bound to follow the view taken by a Division Bench of this court.
4. For the reasons aforementioned, the question of law is answered against the Revenue and in favour of the assessee. No costs.