High Court Of Madras
CIT vs. S. Dhanushkodi
Asst. Year 1975-76, 1976-77
R. Jayasimha Babu & K. Gnanaprakasam, JJ.
Tax Case Nos. 897 & 898 of 1983
6th June, 2001
Mrs. Chitra Venkataraman, for the Revenue : R. Janakiraman, for the Assessee
R. JAYASIMHA BABU, J.:
The common question referred relates to the asst. yrs. 1975-76 and 1976-77. The assessee, in those years, had no income from any source. However, his two minor sons derived income by virtue of their admission to the benefits of a partnership firm, of which the assessee also was a partner, representing the joint family of which he was the Karta. There was no separate assessment of the assessee as an individual and his personal income remained unassessed.
The ITO assessed the sonâs income in the hands of the father. That was set aside by the Asstt. CIT and, on appeal by the Revenue to the Tribunal, the Tribunal confirmed the view of the Asstt. CIT. At the instance of the Revenue, the question as to whether the income of the minor children of the assessee from the firm could be assessed in the hands of the father under s. 64(1)(ii) of the Act has been referred to us. Sec. 64 of the IT Act was amended w.e.f. 1st April, 1976. Prior to that date, the income of the minor from a firm could be included in that of the parent only if the parent was a partner of the firm. For the asst. yr. 1975-76, it is the unamended provision that is applicable and, therefore, for the asst. yr. 1975-76, the income of the minor children could not have been assessed in the hands of the father. The decision of the Tribunal as regards that year, is therefore, correct. However, for the succeeding asst. yr. 1976-77, the amended provision would apply. It is no longer necessary for the parent also to be a partner of the firm for the income of the minor children from the firm being assessed in his hands. The Tribunal, therefore, was in error in holding that the income of the minor children could not have been assessed in the hands of the father for the year 1976-77.
The question referred to us is answered accordingly.
[Citation : 252 ITR 794]