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TMI Blog1982 (2) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... partner in the firms Hanuman Prasad Surya Prakash and Kanhaiya Lal Hanuman Prasad. The assessee's wife Smt. Gita Devi was also a partner in both of these firms. The assessee, in his individual capacity, was, however, a partner in Kanhaiya Lal Hanuman Prasad only. The assessment of the assessee-individual was completed by the ITO by order dated 22-12-1977 on the assessee's share from the firm Kanhaiya Lal Hanuman Prasad and the assessment was, thus, made on a total income or Rs. 37,260. Subsequently, however, the Commissioner was of the view that the assessment order of the ITO dated 22-12-1977 was erroneous and prejudicial to the interests of revenue because the share income of Smt. Gita Devi from the firm Hanuman Prasad Surya Prakash was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income, the income of share of the wife Smt. Gita Devi from the firm Hanumati Prasad Surya Prakash was unjustified. The revenue has also come up in appeal before us with the grievance that the AAC wrongly excluded from the assessee's total income, the income of share of the wife Smt. Gita Devi from the firm Hanuman Prasad Surya Prakash which was in accordance with the ruling of the Hon'ble Allahabad High Court in the case of Madho Prasad v. CIT [1978] 112 ITR 492. 3. The assessee's learned counsel, Shri Gulati, submitted to us that even according to Explanation 1 to section 64, the aggregation of income has to be done either in the case of the husband or the wife whose total income (excluding the income which is to be aggregated) is grea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Commissioner under section 263 was unjustified and should be cancelled. Alternatively, the submission of Shri Gulati was that the direction of the Commissioner should be modified and that the ITO should act according to law, i.e., subject to the provisions of the Income-tax Act. 4. On the other hand, the learned departmental representative, Shri Srivastava, relying on the ruling of the Hon'ble Allahabad High Court in the case of Addl. CIT v. Saraya Distillery [1978] 115 ITR 34 submitted to us that an order was erroneous either when it does not decide a point and record a finding on an issue, which ought to have been done or comes to a decision on that issue wrongly. Elaborating on his argument, Shri Srivastava contended before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Sanka Sankariah. The last argument of Shri Srivastava was that the assessee should be treated as an individual in respect of the incomes of HUF which comprised not only the share from the firm Hanuman Prasad Surya Prakash but also share from the firm Kanhaiya Lal Hanuman Prasad and property income and if this was done, the assessee's total income even excluding the income aggregation of which was under consideration will be more than the income of the wife. He, therefore, vehemently argued before us that the order of the Commissioner was perfectly justified and should be upheld. Alternatively, Shri Srivastava submitted that even if the income of the wife Smt. Gita Devi from share in the firm Hanuman Prasad Surya Prakash was held to be no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entity from the individual. We, therefore, find no merit in the argument or the learned departmental representative, Shri Srivastava, that the income of the HUF of which the assessee was a karta should also be treated as the income of the assessee-individual for the purpose of deciding whether the income of the assessee-individual or the income of the wife (excluding the income aggregation of which was under consideration) was greater. Here it might perhaps not be out of place to mention that the Hon'ble Allahabad High Court in the case of Madho Prasad v. CIT merely laid down that even if the person represented his HUF as partner of a firm, he was a partner in his individual capacity only and, therefore, even if the income from share was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income of the assessee's wife in view or Explanation 1 to section 64(1). In these circumstances, if the ITO while making the assessment of the assessee-individual does not include in his total income the income of his wife, the order of the ITO cannot be said to be erroneous. We have, therefore, no hesitation in coming to the conclusion that the order of the Commissioner under section 263 was itself erroneous and unjustified. The order of the Commissioner under section 263 is, therefore, hereby cancelled. 8. This means that the order of the AAC which had the effect of restoring the assessment originally made by the ITO and deleting the addition made in consequence of the order of the Commissioner under section 263 cannot be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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