Commissioner of Income Tax vs Smt. Gira Sarabhai

B.K. Mehta, J.—In this group of three references, at the instance of the Commissioner, the dispute relates to the attraction of section 64 of the income tax Act, 1961 (''the Act'') for purposes of clubbing the income of the minor sons admitted to the benefit of partnership, or for that matter of wife from the profits of the firm with the income of the father or the husband, as the case may be, where such father or husband is a partner in the same firm in his representative capacity. We, therefore, intend to dispose of this group of references by this common judgment, though the questions referred to us are not precisely identical. The dispute is covered, so far as this Court is concerned, by the decision in Dinubhai Ishvarlal Patel v. K.D. Dixit, ITO [1979] 118 ITR 122 where the Division Bench has held that if one of the partners in a firm is a partner in a representative capacity for and on behalf of his joint family, the mere fact that his spouse is also a partner in the same firm or his minor children have been admitted to the benefits of that partnership firm, would not attract section 64(1)(ii) making the income of such spouse or the children liable to be clubbed with the income of the person who is a partner in a representative capacity. For the self same reasons, in all these three references, we have to answer the questions as under:

IT Reference No. 495 of 1980:

We answer question No. 1 in the affirmative, i.e., in favour of the asses-see and against the revenue. We answer question No. 2 in favour of the assessee and against the revenue, i.e., provisions of section 64(1)(ii) could not be invoked.

IT Reference No. 315 of 1982:

We answer the question in the affirmative, i.e., in favour of the assessee and against the revenue.

IT Reference No. 124 of 1982:

We answer both the questions in the affirmative, i.e., in favour of the assessee and against the revenue.

There would be no order as to costs in each of these references.