Clubbing of minors' partnership income barred where father joined firm only as karta of a Hindu undivided family.

Where a person is admitted to a partnership firm only as karta of a Hindu undivided family, the share income of his minor children from that firm cannot be clubbed in his individual total income. The governing principle is that the partner's representative capacity is distinct from his personal capacity, and the minors' income is treated separately for clubbing purposes. On that basis, the minor sons' partnership income was held not taxable in the assessee's individual assessment, and the reference was answered in favour of the assessee.

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Issues: Whether the share income accruing to the minor sons in a partnership firm could be clubbed in the hands of the assessee in his individual assessment when the assessee was a partner only in the capacity of karta of a Hindu undivided family.

Analysis: The assessee was admitted as a partner not in his individual capacity but as karta of the Hindu undivided family. The minor sons' status as admitted partners/beneficiaries was treated as separate from the assessee's individual capacity. The governing principle, as affirmed by the Supreme Court, is that where the partner represents a Hindu undivided family, income arising to the wife or minor children from the same firm cannot be brought into that person's total income, whether in the individual assessment or in the assessment of the Hindu undivided family.

Conclusion: The minor sons' share income was not liable to be clubbed in the assessee's individual assessment. The question was answered in the affirmative and against the Department.

Final Conclusion: The reference was answered in favour of the assessee, confirming that no clubbing of the minors' partnership income was permissible in these circumstances.

Ratio Decidendi: Where a person is a partner in a firm only as karta of a Hindu undivided family, the income of his minor children from the same firm cannot be clubbed in his total income.

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