ARUNACHALAM C Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The questions referred in these I.T,R. Cs. relate to the scope of Section 64(1) (i) and (ii) of the I.T. Act, 1961 (called shortly the Act). I.T.R.Cs. Nos. 89 and 90 of 1976 are at the instance of the assessee. I.T.R.C, No. 85 of 1978 is at the instance of the Revenue.

(2.) The facts, in brief, are these : I.T.R.Cs. Nos. 89 and 90/1976 : Sri C. Arunachalam - the assessee was a partner in the firm of M/s Sunrise Industries Syndicate representing his HUF. His wife was also a partner in that firm. Sri C. Arunachalam was also a partner in that capacity in another firm called M/s. Sunrise Industries. There his minor children had been admitted to the benefits of tha partnership. For the assessment year 1971-72, Sri C. Arunachalam as an individual filed his return of income made of property income and refund of annuity deposit. The I.T.O. completed the assessment determining the assessee's total income at Rs. 12,368/- made up of property income of Rs. 10,643/- and refund of annuity deposit (other sources) of Rs. 1.725/- in the status of an individual. For the assessment year 1972-73. I.T.O. made similar assessment accepting the return of the assessee. In both the said assessments, the share income accruing to the wife and children in the said firms was not brought to tax in the assessee's hands. I.T.R.C. No. 85/1978; Sri K. Anantha Shenoy - the assessee herein was a partner representing his HUF in the firm of M/s Gajanana Cloth Stores (Wholesale), His three minor children were also admitted in that firm to the benefits of the partnership. The assessee as an individual fited his return of income being the remuneration received from the firm of M/s. Gajanana Cloth Stores. The I.T.O. accepted the same and completed the assessment in the status of an individual,

(3.) The Commissioner of Income-tax in the exercise of his powers under Section 263, revised the assessments in all the above cases and directed that the share income of the wife and minor sons of the assessee should be clubbed with the individual income of the assessee.