Madras H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the share income arising to the minor sons of the assessee by their admission to the benefits of partnership in a firm cannot be included in the hands of the assessee as his parent under s. 64(1)(iii) of the IT Act, 1961, for the asst. yr. 1982-83 ?

High Court Of Madras

CIT vs. K.R. Natarajan

Section 64(1)(iii)

Asst. Year 1982-83

Abdul Hadi & N.V. Balasubramanian, JJ.

Tax Case No. 1519 of 1985

21st March, 1997

Counsel Appeared

C.V. Rajan, for the Revenue : R Janakiraman, for the Assessee

JUDGMENT

N.V. BALASUBRAMANIAN, J. :

At the instance of the Revenue, the Tribunal has stated a case and referred the following question of law under s. 256(1) of the IT Act, 1961, for the opinion of this Court :

“Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the share income arising to the minor sons of the assessee by their admission to the benefits of partnership in a firm cannot be included in the hands of the assessee as his parent under s. 64(1)(iii) of the IT Act, 1961, for the asst. yr. 1982-83 ?”

2. At the time of hearing the tax case reference Mr. C.V. Rajan, learned counsel for the Revenue, stated that this Court in the case of CIT vs. P. Alwarsamy (1995) 211 ITR 353 (Mad), has held that the income arising to the minor sons of the assessee as a result of their admission to the benefit of partnership in a firm is includible in the total income of the assessee after the amendment of s. 64 (1)(iii) of the Act, notwithstanding the fact that the assessee had no income of his own from any source whatsoever. The amendment was made by the Taxation Laws (Amendment) Act, w.e.f. 1st April, 1976. The tax case relates to the asst. yr. 1982-83 and the amendment would squarely apply to the facts of the present case. Mr. R. Janakiraman, learned counsel for the assessee, does not dispute the position that the income of the minor son who is admitted to the benefits of the partnership is liable to be included in the hands of the assessee. Following the above cited decision, we answer the question of law referred to us in the negative and in favour of the Revenue. No costs.

[Citation: 236 ITR 402]

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