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Section 4 of the Income-tax Act, 1961 - Individual - Assessable as - Assessment year 1991-92 - Whether one person can be assessed in dual capacity, one as Karta of HUF and another as in his individual capacity - Held, yes - Karta of assessee HUF sub-let its contract to individual though person was same but in dual capacity - Whether income from contract which had been assessed in hands of individual could not be assessed in hands of an HUF - Held, yes FACTS The assessee-HUF derived income from the contract business. In the accounting year relevant to the assessment year 1991-92, the Karta of the HUF sub-let its contract to individual though the person was same but in dual capacity. The Assessing Officer added the income which had been earned by the Karta in his individual capacity in assessee's income. On appeal, the Commissioner (Appeals) held that even after sub-letting of the contract by the HUF to individual, the net result of income was not affected as whatever the individual had advanced as money to HUF to carry out the contract work was used and if the interest of that amount as loan which had been advanced to the assessee was taken into account it was more than the profit shown in the hands of the individual by the Karta of HUF. Accordingly, he deleted the addition. On revenue's appeal, the Tribunal added back that addition on the ground that HUF was not a juristic person. On appeal : HELD It was surprising that at the Tribunal's level, a view had been taken that HUF could not be a juristic person. The question was not that HUF was a juristic person or not. The Act itself provides that HUF is an assessee. In that case, the same person has dual capacity. He can enter into an agreement in different capacities, i.e., as the Karta of HUF and as an individual. Thus, a Karta can be assessed in the individual capacity also for the income earned in his individual capacity. [Para 3] Therefore, one person can be assessed in dual capacity, i.e., one as Karta of HUF and another as in his individual capacity. When one person has dual personality under the Act and if the HUF sub-lets the contract, without there being any adverse tax effect and especially when the…

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