TMI Blog1984 (1) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... der should be set aside and that of the ITO be restored. 2. The assessee is an individual and the assessment year involved is 1980-81 for which the accounting year ended on 31-3-1980. The assessee is a partner in Senthil Traders representing his HUF and his wife Smt. Jothi Ammal is also a partner in the same firm in her individual capacity. The assessee was paid salary of Rs. 9,000 by the firm for his services for managing the business of the firm. While the share of profits derived by the assessee was assessed in the hands of HUF, the ITO was of the view that the salary paid by the firm was assessable in the hands of the assessee in individual capacity and the share of profits derived by the assessee's wife Smt. Jothi Ammal was to be clu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the AAC. 3. We have duly considered the rival contentions. The issue involved in this appeal is whether the clubbing under section 64(1)(i) is warranted or not. This decision depends upon the interpretation of the word 'individual' appearing in section 64(1)(i). The AAC has pointed out the various conflicting decisions of several High Courts on this point. The majority of the High Courts have decided the issue in favour of the assessee, viz., that the expression 'individual' only takes in a person in his individual capacity and not in the capacity of the karta of a Hindu joint family. The decision of the Punjab and Haryana High Court in the case of CIT v. Anand Sarup [1980] 121 ITR 873 is squarely applicable to assessee's case. In p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conflict of decisions regarding the interpretation of expression 'individual', we prefer to follow that interpretation which is in favour of the assessee in view of the ratio of the Supreme Court in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192. 4. The Tribunal, Allahabad Bench, has held in the case of Surya Prakash v. WTO [IT Appeal Nos. 2178 (All.) of 1979 and 1953 (All.) of 1980 dated 17-2-1982] that the income of an HUF of which the assessee was a karta could not be treated as the income of the assessee-individual for the purpose of deciding whether the income of the assessee individual or the income of the wife was greater. It has also pointed out that the HUF is a distinct and separate entity from the individual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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