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Section 64(1)(iii), read with sections 2(5) and 5 of the Income-tax Act, 1961 - Transfer of assets for benefit of spouse or minor child - Assessment year 1976-77 - Whether share income of assessee's minor sons could be assessed in hands of assessee even though assessee had no income of his own - Held, yes FACTS Two minor sons of the assessee were admitted to the benefits of a registered firm. Their share income derived from the firm was assessed by the ITO in the hands of the assessee by applying the provisions of section 64(1)(iii), although he had no income of his own. On appeal, the AAC confirmed the order of the ITO. On a second appeal, the Tribunal set aside the assessment. On reference : HELD A bare reading of the provisions in section 64(1)(iii ) and the Explanation thereto clearly shows that the income of the minor child of an individual which is derived from the admission of the minor to the benefits of partnership firm will be deemed to be the income of such an individual It forms part of the 'total income' of the individual concerned for the purposes of the Act, as is apparent from section 2(45) read with section 5. In view of the legal fiction created by the Legislature, it is wholly immaterial whether such an individual has any income of his own or not. Accordingly, the minor's income was rightly assessed in hands of assessee. CASE REVIEW CIT v. Shri Manakram [1990] 183 ITR 382 (MP) and CIT v. Sanyasi Mohapatra [1991] 188 ITR 602 (Ori.) followed and relied upon. CASES REFERRED TO CIT v. Shri Manakram [1990] 183 ITR 382 (MP) and CIT v. Sanyasi Mohapatra [1991] 188 ITR 602 (Ori.). B.P. Rajgarhla and S.K. Sharan for the Applicant. JUDGMENT Bharuka, J. - This is a reference made by the Tribunal under section 256(1) of the Income-tax Act, 1961 ('the Act') seeking the opinion of this Court on the following question of law : "Whether, on the facts and in the circumstances of the case, the share income of minors can be assessed under section 64(1)(iii) of the Act in the hands of the assessee, the legal representative of the minors, when the legal representative did not have his income ?" 2. In the present case, two minor sons of the assessee, namely, R.K.…

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