Law:

Section:

Section 4 of the Income-tax Act, 1961 - Income - Chargeable as - Assessee was partner in a firm - His minor son was admitted to benefits of partnership - ITO held that income of minor son was income of joint family of which assessee was karta and thus assessed said income in hands of assessee - Whether since there was no evidence that any joint family funds were used in business of firm or any joint family funds were invested in that business, it could not be held that, minor merely represented joint family and was not there in his own right - Held, yes - Whether, therefore, income of minor could not be assessed in hands of assessee - Held, yes FACTS The assessee and his two brothers were partners in a firm which was a sole selling agency of a company. Later sole selling agency was terminated and a new firm was registered in which the minor sons of said three persons were admitted for the benefits of partnership. The new firm entered into a contract with the said company and became its sole selling agent. The ITO on finding that the three minors were members of the joint Hindu family with their respective fathers, who were separate inter se; and that there was no evidence to prove that the minors had any separate funds of their own which they might have invested in business, held that the income of minor son of the assessee, was really the income of the joint family and could be assessed as such in the hands of the assessee as the karta of the Hindu undivided family. The Tribunal upheld the order of the ITO. On reference: HELD The law is now well settled that it is open to a member of a Hindu undivided family to carry on a business and there is no presumption that any such business belongs to the joint family. There is no presumption that any business carried on by a member of a joint Hindu family is joint family business and it is for those to prove it who allege that it is so. In the instant case there was no question of any blending of income. There was no finding that any funds of the Hindu undivided family were invested in the firm. The department had placed the assessment order of the ITO, the Appellate Assistant Commissioner's order and the Appellate…

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