Clubbing of business income in HUF hands failed where prior binding ruling held the business was not the assessee's.

Income of Temani Trading Company could not be clubbed in the hands of the assessee-HUF where the relevant facts were identical to earlier years and the same High Court had already held that the business did not belong to the HUF. The Tribunal had followed its earlier view without accounting for that binding decision, so its conclusion could not stand. On the same reasoning, the company's income for the relevant previous year was not includible in the assessee's hands, and the addition was rejected.

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Issues: Whether the income earned by Temani Trading Company in the previous year relevant to assessment year 1969-70 was includible in the hands of the assessee-Hindu undivided family.

Analysis: The reference was decided on the footing that the facts for the relevant assessment year were identical to those in earlier years. The earlier decision of the same court had already held that there was no justification for treating the business of Temani Trading Company as belonging to the assessee-Hindu undivided family, and therefore clubbing its income with that of the assessee was not justified. Since the Tribunal had followed its earlier view only on the basis of the prior years, that view could not stand in light of the earlier binding decision.

Conclusion: The income of Temani Trading Company for the relevant previous year was not includible in the hands of the assessee, and the Tribunal was not justified in holding otherwise.

Final Conclusion: The reference was answered in favour of the assessee and the addition of Temani Trading Company's income to the assessee's hands was rejected.

Ratio Decidendi: Where the relevant facts are identical to earlier years and the court has already held that a third party business cannot be treated as belonging to the assessee, its income cannot be clubbed in the assessee's hands for the later year on the same reasoning.

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