Minor's partnership income not clubbed with father's individual income when he acts only as HUF karta.

Income arising to minor children admitted to the benefits of a partnership firm was held not includible in the individual assessment of a father where he was a partner only as karta of a Hindu undivided family. Applying section 64(1)(ii) of the Income-tax Act, 1961, read with the corresponding provision in section 16(3)(a)(ii) of the 1922 Act, the Court treated the earlier construction of the analogous provision as applicable and found no reason to depart from it. The determining factor was that the father was assessed in a representative capacity, not as an individual partner.

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Issues: Whether the income of minor children admitted to the benefits of a partnership firm was includible in the hands of the father where he was a partner only in his capacity as karta of a Hindu undivided family.

Analysis: The governing provisions were section 64(1)(ii) of the Income-tax Act, 1961, and the corresponding earlier provision in section 16(3)(a)(ii) of the Indian Income-tax Act, 1922. The controlling principle was that where the father was assessed as a Hindu undivided family partner and not in his individual capacity, the minors' income from their admission to the benefits of the firm could not be included in his individual income. The Court treated the earlier decision on the analogous 1922 provision as applicable to the unamended 1961 provision and saw no reason to depart from that view.

Conclusion: The minors' income was not includible in the father's individual assessment when he was a partner only as karta of the Hindu undivided family.

Ratio Decidendi: Income arising to minors from admission to the benefits of a partnership firm is not includible in the individual income of a father who is a partner only in his capacity as karta of a Hindu undivided family under the unamended corresponding provision.

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