1970 (8) TMI 12 - HC - Income Tax

Assessee, is a widow and a partner in a firm - minor sons were admitted to the benefits of the firm - Whether the income of the minor child is includible in the mother s income - Held yes

Summary

Issues:
Interpretation of section 64 of the Income-tax Act, 1961 regarding inclusion of minor child's income in the income of an individual, specifically in the case of a widow who is a partner in a firm where her minor sons are admitted to the benefits of the partnership.

Analysis:
The judgment pertains to a reference under section 256 of the Income-tax Act, 1961, involving the inclusion of the share of income of minor sons in the income of a widow who is a partner in a firm. The assessee contended that the word "individual" in section 64 of the Act refers only to males, citing a Supreme Court decision. However, it was argued that the word "individual" in section 64 includes both males and females. The Tribunal upheld the inclusion of the minor sons' income in the widow's income, leading to a question referred to the High Court for opinion.

The court analyzed section 64 of the Act, emphasizing that the word "individual" encompasses both males and females. The counsel for the assessee argued that the word "individual" in sections 64(i) and 64(ii) should be interpreted similarly, contending that a widow, lacking a spouse, should not be considered an "individual" under section 64(ii). However, the court rejected this argument, stating that section 64 aims to include income of certain classes of persons in another individual's total income, irrespective of gender. The court clarified that section 64's clauses operate independently, and the term "such individual" in section 64(ii) refers to any individual, regardless of gender, whose total income is being computed.

The court concluded that the income-tax authorities were correct in including the minor child's income in the widow's total income, as per section 64 of the Act. It was held that income derived by a minor child from a partnership firm where the widow is a partner can be added to the widow's income for tax computation purposes. The court answered the question referred in the affirmative, favoring the Commissioner of Income-tax, and directed the assessee to pay the costs of the reference.

In summary, the judgment clarifies that the word "individual" in section 64 of the Income-tax Act, 1961 includes both males and females. It establishes that income derived by a minor child from a partnership firm where a widow is a partner can be added to the widow's income for tax assessment purposes, as per the provisions of the Act.