2002 (1) TMI 266 - AT - Income Tax

Summary

Issues:
- Interpretation of deduction under section 80L in the case of minors' income included in the total income of the assessee.
- Application of section 64(1A) and section 80B in computing total income.
- Whether deduction under section 80L is to be allowed in respect of each minor's income included in the assessee's total income.

Analysis:
1. Interpretation of deduction under section 80L:
The case involved a dispute regarding the interpretation of deduction under section 80L in the context of minors' income included in the assessee's total income. The Assessing Officer negated the assessee's claim of deducting an amount under section 80L from each minor's income. The ld. Commissioner (Appeals) directed to allow the deduction separately in the case of each minor, leading to the Department's appeal.

2. Application of section 64(1A) and section 80B:
Section 64(1A) mandates the inclusion of income arising to minor children in the total income of the assessee. The Department argued that deduction under section 80L should only be allowed once for the assessee and not for each minor's income. The assessee contended that section 64(1A) refers to "income" and not "gross total income" before deductions under Chapter VIA, supporting the ld. Commissioner (Appeals) order.

3. Deduction under section 80L for each minor's income:
The tribunal analyzed the provisions of section 64(1A) and the nature of deductions under section 80L. It was observed that deduction under section 80L is to be allowed in computing the total income of the assessee. The tribunal referred to a previous judgment to support that the deduction under section 80L is admissible only to the assessee and not to each minor whose income is clubbed with the assessee.

4. Legal Interpretation and Precedents:
The tribunal referred to legal interpretations and precedents to support its decision. It distinguished between the computation of total income for the parent and the minors whose income is clubbed. The tribunal emphasized that the relief under section 80L is available to the assessee, i.e., the parent, and not to each minor individually. The tribunal upheld the Assessing Officer's decision, setting aside the ld. Commissioner (Appeals) order.

5. Conclusion:
The tribunal concluded that deduction under section 80L is legally admissible only to the assessee, i.e., the parent, and not to each minor whose income is clubbed. The Department's appeal was allowed, setting aside the ld. Commissioner (Appeals) order. The judgment clarified the application of section 64(1A) and section 80L in computing the total income of the assessee in the case of minors' income inclusion.