COMMISSIONER OF INCOME TAX Vs. NATVARLAL V DESAI

JUDGEMENT

(1.) IN all, these four references were filed by the Revenue and they are pertaining to different assessment years. IT Ref. Nos. 154 of 1989 is in respect of the asst. year 1976 77, 150 of 1989 is in respect of the asst. year 1978 79, 162 of 1989 is in respect of the asst. year 1981 82, and 180 of 1988 is in respect of asst. yrs. 1982 83 and 1983 84. Since common issue is involved in all the four references, they are disposed of by this common judgment.

(2.) AT the instance of the Revenue, the following question of law is referred to for the opinion of this Court:

(3.) ON 1st July, 1971 a new partnership deed was executed so that in the firm N. Desai and Co. the assessee had now 50 per cent share and his son Pradip had 25 per cent share therein. The ITO held that with regard to the 50 per cent share of the assessee in the said firm, there came into existence a sub partnership between the assessee and his wife and, therefore, added the share income of the wife to the income of the assessee. He relied upon the decision of this Court in the case of CIT vs. Mahendrasingh Mohansingh (1979) 12 CTR (Guj) 172 : (1980) 123 ITR 938 (Guj) : TC 42R.477. He also relied upon the observations of the Tribunal in the assessee's own case for the asst. yrs. 1972 73 to 1974 75 that the second transaction partook of the character of sub partnership. By the second transaction, the Tribunal was referring to the deed of partition. However, the Tribunal ultimately directed the ITO to decide the matter in the light of the said decision in the case of Mahendrasingh Mohansingh (supra). The CIT(A) allowed appeal filed by the assessee.