Clubbing of income - whether assessees are resorting to avoidance of tax by getting divorces so as to defeat the provisions of section 64 - Income Tax - 597/CBDT

INSTRUCTION NO. 597/CBDT Dated : August 24, 1973 Section(s) Referred: 4 Statute: Wealth Tax Act, 1957 The Board desires to know whether assessees are resorting to avoidance of tax by getting divorces so as to defeat the provisions of section 64 of the Income-tax Act 1961 or S.4 of the Wealth Tax Act. With a view to have an idea of the magnitude of the tax avoidance it is considered necessary that some basic information may be collected. The Income-tax Officers may be asked to report to you the cases which they have noticed already giving the information in respect of each case with name, address and other details. After collecting the facts the following information may kindly be intimated to Board;- i)Number of cases where divorces have been effected with a view to practice tax avoidance; (ii)Nature of evidence to show that the divorce has been secured only to save tax and not on account of incompatibility, etc. (iii)Approximate tax effect in the first year on the assessee after the divorce covering income-tax as well as Wealth-tax. The above information may be sent to the Board by 30th October, 1973. The Income-tax Officers may also be directed to report to you the facts as soon as they come across a case of this type and the next installment of the information may be sent to the Board so as to reach the Board by 30-04-1974.