1980 (3) TMI 171 - AT - Income Tax

Summary

Issues:
1. Inclusion of share income from firms in individual's hands under IT Act, 1961.
2. Assessment of share income of minor son under s. 64(1)(iii) of the Act.
3. Disallowance of relief under s. 80C for Life Insurance premium paid by HUF.
4. Interpretation of law regarding inclusion of another's income and granting relief under s. 80C.

Detailed Analysis:
1. The appeal involved objections to the inclusion of share income from firms in the individual's hands under the IT Act, 1961. The assessee had income from shares from three firms and was a former proprietor of a jewelry business. The income from the business was considered includible in the individual's hands under s. 64(2)(b) of the Act. The share income from the partnership was also assessable. The AAC confirmed the additions made by the ITO. However, during the hearing, the objection to the inclusion of share income from the jewelry business was given up, and it was confirmed.

2. The assessment of the share income of the minor son of the assessee admitted to the benefits of partnership was contested. The Tribunal held that the inclusion of the minor son's share income in the firm where the assessee was a partner as Kartha of HUF was not justified. The Tribunal referred to conflicting views on this issue and followed a decision favoring the taxpayer. The inclusion of the minor son's share income was deleted, and it was decided that it would be assessable only in the minor's hands for that year.

3. The disallowance of relief under s. 80C for Life Insurance premium paid by the HUF was also contested. The Tribunal found it inconsistent to confirm the inclusion of income in the individual's hands and deny relief under s. 80C. The Tribunal distinguished a decision of the Kerala High Court and held that relief under s. 80C should be allowed to the extent of the Life Insurance premium payable on the life of the Kartha of the family debited to family accounts from income included in the assessee's hands under s. 64(2)(b) of the Act.

4. The Tribunal also discussed the interpretation of the law regarding the inclusion of another's income and granting relief under s. 80C. It referenced decisions of the Madras High Court and previous Tribunal cases to support its interpretation. The Tribunal allowed relief under s. 80C for the Life Insurance premium paid by the HUF, which was debited to family accounts from income included in the assessee's hands under s. 64(2)(b) of the Act. The appeal was partly allowed, and the inclusion of the minor son's income was deleted, while the assessee was eligible for further relief under s. 80C subject to the allowance ceiling.