COMMISSIONER OF INCOME TAX Vs. RAGHUBIRDAYAL AGARWALLA

JUDGEMENT

(1.) IN Civil Rule No. 6(M) of 1985, this Court directed the Tribunal, Guwahati, to refer the following question for opinion of this Court on the basis of an application filed by the Revenue under S. 256 (2) of the INCOME TAX ACT, 1961 (for short, "the Act") :

(2.) ACCORDINGLY , the above question has been referred for opinion of this Court.

(3.) THE assessee was a partner in a firm known as Anil Brothers, representing his HUF. In the said firm, his wife was also a partner. The ITO assessed the income of the assessee in his individual status under S. 144 r/w S. 147 of the Act for the relevant assessment year. The share income of the assessee's wife from the firm was also included by the AO under S. 64(1) of the Act. The contention of the assessee was that the share income of the wife of the assessee from the firm in which the assessee was also a partner as Karta in his representative capacity should not be clubbed under S. 64(1)(i) of the Act. The ITO observed that the assessee's wife was also a partner in the firm. He, therefore, held that her share of the firm had to be included in the assessee's assessment in his individual capacity. On appeal before the AAC, he directed deletion of the wife's share income from the assessment of the assessee in his individual capacity for the assessment year in question. Being aggrieved, the Revenue approached the Tribunal by filing an appeal and the Tribunal rejected the appeal. Therefore, an application under S. 256(1) of the Act was filed by the Revenue for referring the question for opinion of this Court. However, the Tribunal refused to make the reference holding that there was no referable question. Situated thus the Revenue filed an application in this Court under S. 256(2) of the Act (Civil Rule No. 6(M) of 1985). This Court disposed of the said civil rule giving a direction to the Tribunal to refer the said question. Hence, the present reference.