Orissa High Court
Commissioner Of Income-Tax vs Sanyasi Mohapatra on 10 August, 1990
Equivalent citations: [1991]188ITR602(ORISSA)
JUDGMENT S.C. Mohapatra, J.
1. This is a reference under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), where the statement of case was called for on the following question of law :
"Whether, on the facts and in the circumstances of the case, the Tribunal is justified in its conclusion that the minor sons' income from the firm cannot be assessed in the hands of their father as the father has no income of his own ?"
2. The assessee is an individual. For the assessment year 1976-77, the previous year tor which ended on March 31, 1376, the assessee had no income of his own. However, his two minor sons, namely, Santosh Kumar and Rama Krishna, were admitted to the benefits of the partnership in a firm styled M/s. Sanyasi Mohapatra and Sons who received a sum of Rs. 12,950 towards their share of profit. The Income-tax Officer issued notice to the assessee for inclusion of the amount to the nil income for assessment. The assessee filed a return showing nil income. However, the Income-tax Officer completed the assessment on a total income of Rs. 25,900 which was the benefit derived by his two minor sons from the firm and this was confirmed in appeal. In second appeal, the Tribunal held that in the absence of any income of the assessee, income of the minor sons cannot be included. This is the grievance of the Department in this reference.
3. The question whether income of minor children of a person having nil income could be included for assessment of the person was taken into consideration by a recent decision of the Madhya Pradesh High Court reported in CIT v. Shri Manakram [1990] 183 ITR 382. Referring to various decisions of the; different High Courts and of the Supreme Court, it was held that income of the minor children can be included to the nil income of the assessee to be the basis for assessing him. The aforesaid decision of the Madhya Pradesh High Court has our full concurrence.
4. Accordingly, the answer to the question is that, on the facts and in the circumstances of the case, the Tribunal is not justified in its conclusion that minor sons income from the firm cannot be included to be assessed in the hands of their father on the ground that the father had no income of his own. The question is answered in the negative against the assessee.
5. There shall be no order as to costs.
J. M. Mahapatra, J.
6. I agree.