R.K. Gulati, J. - (1.) AT the instance of the Commissioner of Income-tax, Allahabad, the Income-tax Appellate Tribunal has referred under Section 256 of the Income-tax Act, 1961, the following question of law for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in agreeing with the Appellate Assistant Commissioner in cancelling the assessment made in the case of Smt. Durga-wati Singh, on the basis of the return filed by her ?" The respondent-assessee in respect of the assessment year 1973-74 filed her return of income in the status of an individual showing an income of Rs. 1,792 from a proprietary business for the period April 1, 1972 to May 27, 1972. She also returned an amount of Rs. 32,854 as share income from the partnership business carried on in the name of Friends Automobiles. It may be observed, the business that was carried on by the firm, was the proprietary business of the assessee before May 27, 1972.
(2.) DURING the course of the assessment proceedings for the assessment year aforesaid, the Income-tax Officer found that the assessee was only a benamidar of her husband Sri Vijay Singh, who was the real owner of the business, Friends Automobiles, so long as it was a proprietary business and thereafter it was he who actually was a partner in the firm through his wife, namely, the assessee in this reference. Consequently, the Income-tax Officer held that the entire determined share income of the assessee in the registered firm as well as the income for the period the said business was a proprietary concern during the previous year relevant to the assessment year in dispute, would be clubbed with the income of Vijay Singh and assessed in his hands. However, since a return of income had been filed by the assessee voluntarily, an assessment in her hands was also completed on protective basis. The assessee appealed to the Appellate Assistant Commissioner of Income-tax, where the protective assessment was cancelled on the findings that as the income in dispute had already been assessed on substantive basis in the hands of the assessee's husband, Sri Vijay Singh, the same cannot be allowed to stand. On further appeal to the Income-tax Appellate Tribunal, at the instance of the Revenue, the order of the Appellate Assistant Commissioner was upheld. Hence, this reference to this court at the instance of the Revenue. It may be observed that the husband of the assessee had also contested the matter unsuccessfully against the assessment made in his hands, and in due course, the matter was referred to this court under Section 256(2) of the Income-tax Act, being I. T. R. No. 224 of 1981.
(3.) BOTH the references were heard together. By a separate judgment of date we have upheld the clubbing of the disputed income in the hands of the assessee's husband (see Vijay Bahadur Singh v. C1T [1998] 232 ITR 934 (All)). We have heard learned counsel for the parties.;