Minor child partnership income cannot be clubbed with an HUF karta's individual income under section 64(1)(ii).

Section 64(1)(ii) of the Income-tax Act, 1961 applies to income arising to a minor child for inclusion in the income of an individual, not to income connected with a Hindu undivided family capacity. Where the assessee was a partner in a firm only as karta of an HUF and not in his personal capacity, the minor children's share income could not be clubbed with his individual income. The issue was answered in favour of the assessee and against the Revenue.

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Issues: Whether the share income arising to the assessee's minor children from a partnership firm in which the assessee was a partner only as karta of a Hindu undivided family could be clubbed with the assessee's individual income under section 64(1)(ii) of the Income-tax Act, 1961.

Analysis: The statutory scheme of section 64(1)(ii) contemplates inclusion in the computation of the income of an individual of income arising to a minor child from admission to the benefits of partnership in a firm. The provision operates on the income of an individual as distinct from the income of a Hindu undivided family or other juristic units. On the facts found, the assessee was not a partner in his personal capacity but represented the joint family, and the minor children's income could not be brought within the clubbing provision on that basis. The contrary view of another High Court was not followed in light of the binding decision of this Court in an earlier case.

Conclusion: The question was answered against the Revenue and in favour of the assessee; the minor children's share income was not liable to be clubbed with the assessee's individual income under section 64(1)(ii) of the Income-tax Act, 1961.

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