9911796707
TMI Blog1998 (11) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Officer issued notice under section 148 requiring the assessee to file a return in his individual capacity which was returned as nil. Applying section 64, the shares allotted to minor sons of the assessee, who were admitted to the benefits of partnership, in the firm in which he was also a partner representing the Hindu undivided family were assessed as income of the assessee in his individual capacity. This order on appeal was not sustained by the Appellate Assistant Commissioner holding that since section 64 applies only in case of an individual and not in the case of a person becoming partner in his status as karta of the Hindu undivided family, exigency for operating of section 64 in the present case did not arise. As the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Supreme Court in CIT v. Shri Om Prakash [1996] 217 ITR 785. The court explained : "A Hindu undivided family is itself an assessable entity or unit. The income earned by the karta is taxed in the hands of the Hindu undivided family. No part of such income is computed in his individual assessment. When section 64 speaks of 'computation of the total income of any individual', it ex hypothesi excludes from such computations, income which is assessable in the hands of the Hindu undivided family. Section 64 does not deal with the share income of the karta from the firm. It is confined to the clubbing together of the share income of the spouse or minor children of the individual from the firm, with such other income of that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... individual capacity. It is not attracted where he is a partner as the karta of the Hindu undivided family to which such wife and/or minor children belong. This is the holding of the decisions of this court in L. Hirday Narain's case [1970] 78 ITR 26 ; Harbhajan Lal's case [1993] 204 ITR 361 and Jayantilal Prem Chand Shah's case [1995] 211 ITR 111. It may not be quite apt to say that vis-a-vis the members of the Hindu undivided family, the karta is still an individual and, therefore, such income of wife and minor children should be included in the income of the karta derived as karta. Nor are we satisfied that such income of the wife and/or minor children should be included in the individual assessment of the karta." In view of the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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