INCOME TAX OFFICER Vs. N BALASUBRAMANIAM
INCOME TAX APPELLATE TRIBUNAL
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(1.) THESE appeals by the revenue are consolidated and disposed of by a common order for the sake of convenience as they involve common issues. THESE appeals pertain to assessment years 1977-78 to 1982-83 and arise out of the consolidated order of the Dy. CIT (Appeals), Coimbatore dated 5-2-1992 wherein he deleted the share of profits derived by the wife of the assessee from the partnership firm included by the Assessing Officer Under Section 64(1)(i) of the Income-tax Act, 1961. The revenue has taken common grounds to urge that the order of the Dy. CIT(A) is opposed to law, facts and circumstances of the case and he erred in his decision and is not in accordance with the judgment of the jurisdictional High Court in the case of CIT v. V. Kumaraswamy  163 ITR 252 (Mad.).
(2.) The assessee is an individual and he is a partner in the firm M/s. N. Balasubramaniam & Co., Hardware Merchants at Rasipuram in his representative capacity. The original assessments made for these years were re-opened on the ground that the share income from the same firm derived by Smt. B. Mallika, wife of the assessee, is required to be included Under Section 64(1)(i). In the reassessments made the share income of Smt. B. Mallika was duly included as detailed in the impugned assessment orders. On appeal, the inclusion of share income was contested vehemently by the learned counsel for the assessee by relying on the judgment of the Andhra Pradesh High Court in the case of CIT v. Sanka Sankaraiah  113 ITR 313. In that case, it was ruled that where a person is a partner representing the HUF consisting of himself, his wife and children, the share income from the firm derived by his wife or minor children cannot be included in the individual assessment of the partner Under Section 64. The Dy. CIT(A) duly noted the fact that in the instant case the income of the assessee in his representative capacity from the firm has not been taken as his individual income. By inference it means, that share income of the partner in his representative capacity has been separately assessed presumably in the status of HUF because admittedly he represents the HUF in the partnership. After noting the aforesaid factual position, the Dy. CIT(A) abruptly came to the conclusion that in the circumstances of the case the income of the assessee's wife cannot be included in his hands. He has also observed that the decision of the Andhra Pradesh High Court had become final as the Special Leave Petition filed by the revenue against the said judgment has been dismissed by the Supreme Court. Following the aforesaid ruling of the Andhra Pradesh High Court,- the Dy. CIT(A) concluded that the inclusion of share of profits of Smt. B. Mallika, wife of the assessee, was not justified in law and accordingly he deleted the inclusion of share income for all these years.
At the time of hearing, the learned departmental representative has been heard at great length. He has reiterated the common grounds taken by the revenue and supported the orders of the Assessing Officer.
(3.) THE learned counsel for the assessee, on the other hand, vehemently supported the order of the Dy. CIT(A) by relying on the judgment of the Andhra Pradesh High Court in the case of Sanka Sankaraiah (supra) and also relied on the latest judgment of the Supreme Court in the case of CIT v. Harbhajan Lal  204 ITR 361 wherein the controversy has been set at rest in favour of the assessee.;
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