COMMISSIONER OF INCOME TAX Vs. NANAKRAM

JUDGEMENT

(1.) THE Tribunal, Jabalpur Bench, Jabalpur, has referred under s. 256 (1) of the IT Act, 1961 the following question for decision by this Court:

(2.) THE assessee in this case is one Nanakram. THE years of assessment are 1976-77 and 1977-78 Dilip Kumar and Suresh Kumar, two minor sons of the assessee, were admitted to the benefit of the partnership firm by name United Service Station Satna, Yet other two minor sons, Ashok Kumar and Brijlal, were admitted to the benefit of another partnership firm, styled as Krishna Dal Mills, THE assessee himself was a partner in both these firms, as representative of the HUF. THE ITO while assessing the total income in the hands of the assessee included the income of the minor sons, derived from these partnership firms. This was in terms of s. 64(1)(iii) of the IT Act,. THE AAC, in appeal, affirmed that order and rejected the contention that if the income of the assessee is nil, the benefit earned by his minor sons from the partnerships could not be included and taken into consideration, while assessing the total income in the hands of the assessee. THE Tribunal reversed this finding. THE view taken by the Tribunal is that in case the assessee has no income at all, which could be assessed to income-tax, the income of his minor children, earned as a result of their admission to the partnership, was not includible for assessing the income of the father (assessing in the present case). It is under these circumstances and the facts that the aforesaid question has been referred at the instance of the Department for decision by this Court.

(3.) WE accordingly answer the question, referred to us, in favour of the Revenue and against the assessee. There shall be no order as to costs.