VIJAI BAHADUR SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN pursuance of the directions of this court under section 256(2) of the INcome-tax Act, 1961, the INcome-tax Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following three questions of law for the opinion of this court :

(2.) BRIEFLY, the facts are that for the assessment year 1973-74 for which the previous year ended on March 31, 1973, the assessee, Vijai Bahadur Singh, filed his return of income in the status of an individual from two sources, viz., (i) salary income as an employee of Friends Automobiles, a partnership concern, in which his wife, Smt. Durgawati Singh, was a partner, and (ii) income from a proprietary business known as Sanjay Trading Corporation which held an agency from Super Speed (P.) Ltd. for purchase and sale of its products.

(3.) IN due course while framing the assessment order for the assessment year 1973-74 in the case of the assessees wife, the INcome-tax Officer took the view that she was only a benamidar of her husband who was the real owner of the business Friends Automobiles so long it was a proprietary business and thereafter it was actually he who was a partner in the firm through his wife. The INcome-tax Officer further held that the income earned by her will be clubbed in the hands of her husband, namely, the assessee, in this reference. However, the disputed income was also assessed protectively in the hands of Smt. Durgawati Singh with the remarks : As the return has been filed voluntarily the assessment is made on protective basis.