COMMISSIONER OF INCOME TAX Vs. JHABARMAL AGARWALLA

JUDGEMENT

(1.) BY this reference made under S. 256(1) of the INCOME TAX ACT, 1961, the Tribunal, Gauhati Bench, Gauhati, has referred the following question of law for our opinion :

(2.) THERE appears to be some mistake in the question as, in view of the facts of the case, the relevant section should be S. 64(1)(i) and not S. 64(iii). We shall, therefore, read S. 64(1)(i) in place of S. 64(iii).

(3.) LEARNED counsel for the assessee, Dr. D. K. Mishra, as well as learned senior standing counsel for the Department, Mr. D. N. Choudhury, both fairly submitted before us that the High Courts in the country are divided on this point. The High Courts of Allahabad and Madras have taken the view that irrespective of the capacity in which an individual is a partner in a firm, the provisions of s. 64(1) of the Act would apply and the income of the husband, wife and minor children, if they are partners in the same firm, shall be clubbed together. The High Courts of Andhra Pradesh, Bombay, Karnataka, Gujarat, Madhya Pradesh and Punjab and Haryana have taken a contrary view and held that where a Karta of an HUF is a partner in a firm in his representative capacity along with his wife, the share income of the wife cannot be clubbed together with his income.