1980 (10) TMI 85 - AT - Income Tax

Summary

Issues:
Interpretation of Section 64 (vi) - Inclusion of interest in assessment.

Analysis:
The appeal before the Appellate Tribunal ITAT ALLAHABAD-A concerned the interpretation of Section 64 (vi) regarding the inclusion of interest in the assessment of the assessee. The Revenue contended that the entire amount of interest should be included, while the AAC had held that only the proportionate amount should be included.

The appellant had gifted amounts to her daughter-in-law, who then invested the gifted amount in a firm and became partners. The ITO included the share of profit and interest received by the daughter-in-laws in the total income of the appellant under Section 64 (vi). However, the AAC disagreed, stating that including the entire share of profit and interest would result in double addition as these amounts were already included in the income of the father-in-law of the daughters-in-law.

The Department's representative argued that the entire share of profit/interest received by the daughters-in-law should be included in the appellant's total income, while the appellant's counsel supported the AAC's decision of including only a proportionate amount.

After considering the submissions, the Tribunal found no merit in the Revenue's argument. Section 64 (vi) pertains to the income arising from assets transferred by the assessee to her daughter-in-law. Since the assessee had gifted specific amounts, including the entire share of profits/interest of the daughters-in-law in the appellant's total income would be incorrect. Therefore, the Tribunal upheld the AAC's order, dismissing the appeal.

In conclusion, the Tribunal affirmed the AAC's decision, emphasizing that including the entire share of profit and interest of the daughters-in-law in the appellant's income was not warranted under Section 64 (vi). The appeal was consequently dismissed.