Law: Income Tax Act, 1961

Section: 256(1),64(1),143(3)

Law: Income Tax Act, 1922

Section: 16(3)

Income-tax--- ----Total income---Inclusions in total income---Law applicable to assessment---Gift of money to wife in January, 1974---Amount invested in firm---Income from firm earned by wife not includible in total income of assessee---Explanation 3 to S.64(1) inserted w.e.f. 1-4-1967 not applicable--­Indian Income Tax Act, 1961, S. 64. There is nothing in section 64 of the Income Tax Act, 1961, or the Explanation which was inserted by the Taxation Laws Amendment Act, 1975, to indicate that it was retrospective in nature and, therefore, the said Explanation cannot be considered for deciding the clubbing of income in respect of investment made prior to the coming into force of the amendment The assessee had made a gift of Rs.5,000 in January, 1974, to his wife without adequate consideration. She had invested it in a firm. The Tribunal held that the income earned by the assessee's wife had to be included in the total income of the assessee. On a reference: Held, that the transfer in question having been made in January, 1974, the provisions of the amended subsection (1) of section 64 alongwith Explanation 3 which became operative from April 1, 1976, were not applicable. The income of the assessee's wife from the firm was not includible in his total income. CIT v. Prahladrai Agarwala (1989) 177 ITR 398 (SC) and CIT v. Prem Bhai Parekh (1970) 77 ITR 27 (SC) ref. JUDGMENT G. B. PATNAIK, J.---On an application being filed under section 256(1) of the Income Tax Act, 1961, the Income-tax Appellate Tribunal has referred the following questions for the opinion of this Court: "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the provisions of clause (iv) of section 64(1) were attracted to the facts of the case by virtue of Explanation 3 to section 64(1) of the Income Tax Act, 1961? (ii) Whether, on the facts and in the circumstances of the case, the alleged transfer having been made in January, 1974, the provisions of the amended subsection (1) of section 64, operative from April 1, 1976, alongwith Explanation 3 to the said subsection was applicable to the facts of the case?" The assessee, as an individual, has…

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