ITAT directs exclusion of wife & son's share income from assessment, aligns with prior years, setting aside Revenue orders.

The ITAT allowed the appeal, directing the ITO to exclude the share income of the assessee's wife and minor son from the assessment for the asst. yr. 1973-74, aligning with principles applied in prior years and setting aside Revenue authorities' orders.

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Issues:
Inclusion of 2/3rd share income in the assessment for the asst. yr. 1973-74 from a firm due to a claimed partition and sub-partnership.

Analysis:
The appeal concerned the inclusion of 2/3rd share income from a firm, M/s. Shiv Narain Karmendra Narain, in the assessment for the asst. yr. 1973-74. The assessee, a partner in the firm representing a joint Hindu family, claimed a partition had occurred, reducing his share to 1/3rd. Previous Tribunal decisions had established a sub-partnership between the assessee, his wife, and minor son, leading to inclusion of income under s. 64(1) and (2) of the IT Act, 1961. The ITO included the entire share income following prior Tribunal rulings, despite the partition claim.

Upon appeal, the AAC noted conflicting Tribunal decisions for prior years, where an over-riding charge was recognized, excluding the wife and son's share income from the assessee's assessment. However, the AAC upheld the ITO's decision for the current year based on inferred agreement for sharing losses in previous years. The assessee's counsel argued for consistency with Tribunal decisions for prior years, where sub-partnership principles were applied, leading to inclusion of all share income in the assessee's assessment.

The ITAT reviewed previous Tribunal orders for the asst. yrs. 1966-67 to 1968-69 and for the asst. yrs. 1969-70 and 1970-71, which had conflicting decisions on the treatment of share income. Noting the consistent facts and contentions, the ITAT aligned with the later decisions, setting aside the Revenue authorities' orders. Consequently, the ITAT directed the ITO to exclude the share income of the assessee's wife and minor son from the assessment, in line with the principles applied in the prior years. The appeal was allowed, granting relief to the assessee.

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