TMI Blog1967 (11) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of the firm under section 22 of the Income-tax Act, 1961 ? " The counsel of the revenue raises a preliminary objection that the question referred does not arise out of the order of the Tribunal. To appreciate this objection, a few facts may be noted. The assessee is a registered firm with 17 partners ; and the firm has both business income and house property income. The property income for the assessment year 1962-63 came to Rs. 40,515 ; and the assessee claimed that the amount should be assessed, under section 26 of the Indian Income-tax Act of 1961, in the hands of the partners and should not be included in the total income of the firm itself under section 22. On the other hand, the department claimed that the income should be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority and every artificial juridical person not falling within any of the preceding categories. In our opinion, section 22 deals with a case where the assessee is the owner of the house property, whereas section 26 applies to a case where the assessee is an association of persons and the members or the persons constituting such association own the house property in definite and ascertainable shares, in other words, as co-owners. To put it differently, section 26 applies to a case where the controversy is whether the income from the house property should be included in the total income of an association of persons or whether the income should be assessed in the hands of the persons who constitute such association. Putting the idea again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned judge observes that the principle contained in section 9(3) applies not only to associations of persons but to joint Hindu families as well. The counsel of the assessee argues that, if the principle applies to joint Hindu families, by parity of reasoning, it must apply to firms as well. In the view we have already expressed regarding the application of section 26 (section 9(3) being the corresponding section in the earlier Act), we feel that section 26 does not apply to cases where joint Hindu families, firms or companies are assessees : it can apply only to cases where associations of persons are assessees. In a Dayabhaga Hindu joint family, the properties are not owned by its members ; the owner is the family itself, but the me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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