Satish Chandra, J. - (1.) THIS reference relates to assessment years 1969-70 and 1970-1971, the relevant previous years being the financial years.
(2.) SRI V. K. Purwar, the assessee, was in service in the firm of Messrs. Govind Ram Gajadhar Lal. There was a partition in this firm in October November, 1966, whereafter this firm was converted into a partnership firm. SRI V. K. Purwar became a partner. The share income received by SRI V. K. Purwar from the partnership firm, Messrs. Govind Ram Gajadhar Lal, is the subject-matter of dispute in this reference. The assessee claimed that he became a partner in his capacity as karta of his own HUF consisting of himself, his wife and daughter. The ITO, however, repelled this claim, and brought the share income to assessment in his individual capacity. This happened for the assessment year 1966-67. For the two subsequent years, namely, 1967-68 and 1968-69, also the ITO maintained the same position. The share income from this firm was assessed in the hands of Sri Purwar in his individual capacity. For the assessment years 1969-70 and 1970-71, Sri Purwar filed two returns--one in his individual capacity and another as the karta of his HUF. The share income from this firm was shown in the return filed as karta.
(3.) THE ITO, relying mainly on his previous orders, repelled the claim of the HUF and brought the share income from this firm to tax in the hands of Sri Purwar in his individual capacity. The assessee went up in appeal. In respect of one year he succeeded. The AAC held that the share income properly belonged to the HUF and was taxable in their hands. But for the year 1970-71, the appeal came up for hearing before another AAC, who differed from his predecessor, and rejected the claim of the HUF.;