1982 (1) TMI 115 - AT - Income Tax

Summary

Issues:
Whether a married daughter could be considered a minor child of the assessee for the purpose of section 64(1)(iii) of the Income-tax Act, 1961.

Analysis:
The judgment dealt with the issue of whether a married daughter could be considered a minor child of the assessee for the purpose of section 64(1)(iii) of the Income-tax Act, 1961. The assessee's daughter, who was married, had been admitted to the benefits of a firm, and her income had been included in the total income of the assessee in previous assessment years. The assessee claimed that since his daughter was married, her income should not be included in his total income for the relevant assessment years. The Income Tax Officer (ITO) rejected this contention, stating that a married daughter is not excluded from the operation of clause (iii) of section 64(1). The Appellate Assistant Commissioner (AAC) confirmed this decision. However, in the further appeal, the assessee argued that a married daughter should not be considered a minor child for the purpose of section 64(1)(iii). The assessee relied on the decision of the Madras High Court and argued that there was no nexus between the assessee and the married daughter, as the daughter was married and no longer under the guardianship of the assessee. On the other hand, the revenue contended that the clear language of the section required the income of a minor child to be added, regardless of marital status. The Tribunal analyzed the historical perspective of the legislation and the purpose behind including the income of minor children in the total income of the assessee. The Tribunal noted that while historically, the guardianship of the father over the minor child was crucial, the situation had changed with the amendment to the Act in 1975, which removed the requirement for the assessee to be a partner in the firm. The Tribunal held that in the context of section 64 and considering the intention and purpose of the section, a married daughter, though a minor, could not be included in the total income of the father-assessee if the father had lost control over her person and property due to her marriage. The Tribunal concluded that the expression 'minor child' could no longer include a married daughter and directed the ITO to recompute the total income of the assessee by excluding the income arising to the married daughter. The appeals were allowed, and the decision favored the assessee.