Judgment:
M.B. Shah, J.
1. Under section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following question for our opinion :
'Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the provisions of section 64(1)(i) of the Income-tax Act, 1961, are not attracted in the case of the assessee and the share income of the assessee's wife from the firm of N. Kilabhai and Co., is not includible in the assessee's total income for the assessment years 1969-70, 1970-71, 1972-73 and 1973-74 ?'
2. Admittedly, the question is decided by various decisions of this court. In the present case, the assessee was a partner in the firm named N. Kilabhai and Co., Ahmedabad, in his capacity as karta of a Hindu undivided family. The wife of the assessee was also a partner in the said firm. The Income-tax Officer took the view that because the Hindu undivided family as such could not enter into a contract of partnership but its karta can enter into partnership for the benefit of the Hindu undivided family, the fact that he was a partner in his representative capacity was of no consequence. Therefore, he treated the assessee as a partner as an individual and as his wife was also a partner in the said partnership firm, he held that the provisions of section 64(1)(i) were attracted and the share of income of the wife of the assessee was liable to be included in the total income of the assessee : The dispute pertains to the assessment years 1969-70, 1972-73, 1970-71 and 1973-74. The aforesaid issue is concluded by the decision of this court in the case of Dinubhai Ishvarlal Patel v. K. D. Dixit, ITO : [1979]118ITR122(Guj) wherein the court has held that in view of the Explanation to section 64, it is clear that the 'individual' who is referred to in section 64(1)(ii) can only be an assessee who is being assessed in his individual capacity and not one who is being assessed in a representative capacity such as the karta of a Hindu undivided family. The court further held that in view of that position, it was obvious that the provisions of section 64(1)(ii) could never have been invoked in the case of the share of profit earned by the minor son of the deceased. The aforesaid decision is followed in the case of CIT v. Vallabhdas Manjibhai : [1987]163ITR59(Guj) wherein the court 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) of the Income-tax Act, 1961, 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. One of the aforesaid decisions is also followed in the case of CIT v. Ramanlal Nagindas Shah : [1992]195ITR9(Guj) .
4. In view of the aforesaid legal position in this State, we answer the question in the affirmative i.e., in favour of the assessee and against the Revenue.
5. In the result, the reference is answered accordingly with no order as to costs.