Law: Income Tax Act, 1961

Section: 64

Income-tax---Total income---Inclusions in total income---Law applicable---Firm--¬Income accruing to minor from admission to benefits of partnership---Parent not having income of his own---Effect of amendment of S.64 in 1976-----Income was not includible in total income of parent for assessment years 1974-75 and 1975-76---Income is includible in total income of parent for assessment year 1977-78---Indian Income Tax Act, 1961, S.64. As a result of the amendment to section 64 of the Income Tax Act, 1961, with effect from April 1, 1976, for the assessment year 1977-78, the position is that the income arising to the minor sons of the assessee as a result of their admission to the benefits of a partnership is liable to be included in the total income of the assessee under section 64(1)(iii) of the Act, notwithstanding that the assessee has no income of his own from any source whatsoever: Held, (i) that for the assessment years 1974-75 and 1975-76, the income of the minor sons arising from the admission to the benefits of partnership could not be included in the total income of the assessee; (ii) that for the assessment year 1977-78, the income arising to the minor sons of the assessee as a result of their admission to the benefits of partnership was liable to be included in his total income under section 64(1)(iii) of the Income Tax Act, 1961, notwithstanding that the assessee had no income of his own from any source whatsoever. CIT v. Alwarsamy (P.) (1995) 211 ITR 353 (Mad.) fol. CIT v. Shri Om Prakash (1996) 217 ITR 785 (SC) ref. JUDGMENT K.A. THANIKKACHALAM, J.---At the instance of the Department, the Tribunal referred the following two common questions for the assessment years 1974-75, 1975-76 and 1977-78, for the opinion of this Court, under section 256(1) of the Income Tax Act, 1961: "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the share income arising to the minor sons by virtue of their admission to the partnership firm cannot be included in the individual assessment of the assessee under section 64(1)(iii) of the Income Tax Act, 1961, for the assessment years 1975-75, 1975-76 and…

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