Law: Income Tax Act, 1961

Section: 64(1)(iii)

Income-tax---Total income--Inclusions in total income--Income of minor child from admission to benefits of partnership--Source of funds invested by minor not relevant--Minor member of Hindu Undivided Family--Investment of Hindu Undivided Family funds in firm--Income of minor from admission to benefits of partnership is includible in individual income of parent--Indian Income-tax Act, 1961, S.64(1)(iii). If the income arising to a minor child of an assessee from a partnership firm is referable to the fact of admission of that child to the benefits of the said partnership firm, then such income is includible in the total income of the parent under the provisions of section 64(1)(iii) of the Income-tax Act, 1961. The question of source of investment in the firm by the minor is not relevant or decisive for making the income of the minor includible in the total income of the assessee. Where the minor son of the assessee was admitted to the benefits of a partnership by investing HUF funds: Held, that the income of the minor from admission to the benefits of the partnership was includible in the total income of his mother, who was the assessee. CIT v. Smt. Nirmala Devi (1987)166 ITR 253 (MP) foil. JUDGMENT G.G. SOHANI, ACTG. C.J.--By this reference under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Jabalpur, has referred the following questions of law to this Court for its opinion: "(1) Whether, on the facts and circumstances of the case, the Tribunal was justified in law in holding that the share income Rs. 19,476 in the name of Sanjay Kumar was rightly added in the income of the appellant (mother)? (2) Whether the Tribunal was justified in law in holding that the provisions of section 64(1)(iii) were applicable for adding the share income in the name of Sanjay Kumar which was being assessed in the hands of the Hindu undivided family to the total income of the appellant?" The material facts giving rise to this reference, briefly, are as follows: while computing the income of the assessee for the assessment year 1976-77, the Income-tax Officer included the share income of the minor son of the…

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