Law:

Section:

Section 64 of the Income-tax Act, 1961 [Corresponding to section 16(3)(b) of the Indian Income-tax Act, 1922] - Transfer of assets - For benefit of spouse or minor child - Assessment year 1960-61 - Assessee created a trust and transferred his shares and securities to it for benefit of his minor daughter - ITO took a view that income of trust from dividend and interest on securities was liable to be taxed in assessee's hands - Accordingly, he included said sum in assessee's income - AAC as well as Tribunal did not accept view taken by ITO - On instant reference, it was seen that during relevant assessment year, no part of trust's income was actually received by minor daughter of assessee nor did it accrue to her nor she derived any benefit out of income in hands of trustees - Whether, in such circumstances, Tribunal was right in holding that no part of trust's income could be included in total income of assessee in relevant assessment year under section 16(3)(b) of 1922 Act - Held, yes FACTS For the relevant assessment year, the assessee filed a return showing income from salary. In the past he had income from dividend and interest on securities which was not included in the return. He claimed that the shares and securities held by him were transferred to a trust for the benefit of his daughter and, as such, the, income therefrom formed a part of the trust estate and was not liable to be taxed in his hands. The ITO examined the deed of trust and came to the conclusion that the assets had been transferred by the assessee without any consideration and for the benefit of his minor child. Thus, the income of the trust during the relevant year, was taxable in the hands of the assessee. Accordingly, he included the said sum in the assessee's income. The AAC held that no part of the income of the trust could be added to the income of the assessee. A sum which was payable to the minor daughter of the settlor was specifically considered by the AAC and in regard to that also he held that the minor had not derived any benefit during the accounting year and no sum was paid to her. The assessee, on the other hand, made the monthly payment for maintenance and education of his…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492