PRAYAG DASS RAJGARHIA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) FOUR IT reference have been heard together. These involve a common question of fact and law. Shri Prayag Dass Rajgarhia is the Karta of a joint Hindu Family. He entered into a partnership with one Shri Satya Pal under the name and style of M/s Prayag Dass Rajgarhia & Co., w.e.f. 1st November, 1964. He had four minor daughters who were admitted to the benefits of the partnership. The share income of the four minor daughters was Rs. 18,753 in the accounting period relevant to the asst. year 1965 - 66. This amount was added to the applicant's individual income by operation of S. 64(ii) of the INCOME TAX ACT, 1961. The Tribunal's order dated 23rd December, 1970, gives the reasons for this. For this year, the question "Whether, on the facts and in the circumstances of the case, the share income from the firm of M/s Prayag Dass Rajgarhia & Company arising to the assessee's four minor daughters is includible in the total income of the assessee under S. 64(ii) of the INCOME TAX ACT, 1961 ?" has been referred to us.

(2.) THE other three cases which have been heard along with this case are the cases of Shri Kanhaya Lal Rajgarhia who was also the Karta of the HUF. He became a partner in a firm, M/s Kanhaya Lal Ashok Kumar & Co., and the benefits of partnership were given to his minor children consisting of two minor sons and one minor daughter. The assessee was also a partner in two other partnership firms, M/s Oriental Steel & Wire Industries and M/s Delhi Paper Marketing Co., and there also a similar question was involved. This question was the subject of numerous decisions of the Tribunal and in this case the matter was referred to a Full Bench of the Tribunal which held that the income of the minor children was not to be included in the assessee's income. On these facts and circumstances, the following question was referred for our opinion:

(3.) THE Full Bench decision of the Tribunal has given extensive and cogent reasons for coming to the conclusion that the income of the individual minors who were admitted to the benefits of the partnership are not to be included in the individual income of their father because the father in the cases in question became a partner only as a representative of the HUF and not on his own account. We would have examined these reasons in greater detail, but we find that there are already four reported decisions covering the same point.