COMMISSIONER OF INCOME TAX LUDHIANA Vs. OM PRAKASH

JUDGEMENT

(1.) Leave is granted in S.L.P. (C) No. 1608/80.

(2.) The common question posed in these cases relates to interpretation of the term "individual" in S. 64(1)(i)(ii) of the Income-tax Act, 1961 (as it stood prior to April 1, 1976). The conflict of judicial opinion of various High Courts with regard to connotation of that term gave rise to these cases, which needs to be resolved by this Court.

(3.) For appreciating the question involved in these cases, it will suffice to refer to the facts in Civil Appeal No. 4234 of 1983 which pertains to the assessment year 1973-74. The respondent was a partner in the partnership firm, M/s. Rockman Cycle Industries, Ludhiana in his capacity as Karta of the Hindu Undivided Family. Two minor children of the respondent, a daughter, Miss Neeru, and a son, Pankaj, were admitted to the benefits of the partnership. Similarly, they were also partners in another partnership firm, M/s. Munjal Gases, Ludhiana. The income arising in the hands of minor children was sought to be included in his total income. That was objected to by him on the ground that he was a partner in the firms in the capacity of Karta of the Hindu Undivided Family, so S. 64 of the Income-tax Act did not apply. The Income-tax Officer rejected that contention, included the share income of the minors in his total income and assessed him accordingly. The Appellate Assistant Commissioner upheld the order of the assessing authority, in appeal. On further appeal, the Income-tax Appellate Tribunal, Amritsar set aside the order of the appellate authority taking a contrary view and thus allowed the appeal of the respondent. Out of that order, at the instance of the Revenue, the following question was referred to the High Court under S. 256(1) of the Income-tax Act, 1961: