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Interpretation of section 4 of the Indian Partnership Act, 1932, and sections 2(23) and 64 of the Income-tax Act, 1961 regarding clubbing of income from a partnership firm where an individual represents his Hindu undivided family and his wife is also a partner. Analysis: The High Court of GAUHATI delivered a judgment in response to a question referred by the Income-tax Appellate Tribunal regarding the clubbing of income from a partnership firm. The case involved an assessee who was a partner in a firm along with his wife, representing his Hindu undivided family. The Income-tax Officer included the wife's share income in the assessee's assessment under section 64(1) of the Income-tax Act. The assessee contended that the wife's income should not be clubbed with his individual income as he was a partner in a representative capacity. The Appellate Assistant Commissioner directed the deletion of the wife's share income, which was upheld by the Tribunal. The Revenue, dissatisfied with the Tribunal's decision, filed an application under section 256(1) of the Act to refer the question to the High Court. The Tribunal initially refused to make the reference, leading the Revenue to file an application under section 256(2) of the Act in the High Court. The court directed the Tribunal to refer the question, which led to the present judgment. The court considered the decisions in CIT v. Shri Om Prakash and CIT v. Jhabarmal Agarwalla. In CIT v. Shri Om Prakash, the Supreme Court held that income accruing to a person's wife or minor children from a partnership firm where the person is a partner as the karta of the Hindu undivided family cannot be included in the total income of that person. Applying this principle, the court concluded that the wife's share income should not be clubbed with the assessee's individual income. The court ruled in favor of the assessee and against the Revenue, directing the transmission of the judgment to the Income-tax Appellate Tribunal. In the absence of any specific direction, the court made no order as to costs in the case.
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