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TMI Blog1982 (1) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitted to the benefits of a firm and her income had been included in the total income of the assessee in the earlier assessment years. But the assessee claimed that in respect of these two assessment years, since she had been married, the income accruing to her no longer be included in the total income. The ITO rejected this contention by pointing out that a married daughter is not excluded from the operation of clause (iii) when contrasted with clauses (iv) and (v) of section 64(1), where a married daughter is excluded. He also relied on the decision of the Kerala High Court in the case of Kumaraswamy Reddiar v. CIT [1963] 49 ITR 687 and added back the amount. This was confirmed by the AAC. 3. In the further appeal before us, it was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required to appreciate the question raised in these appeals. The Income-tax Enquiry Commission, 1936 had observed : "There is also a growing and serious tendency to avoid taxation by the admission of minor children to the benefits of partnership in the father's business. Moreover, the admission is, as a rule, merely nominal, but being supported by entries in the firm's books, the Income-tax Officer is rarely in a position to prove that the alleged participation in the benefits of the partnership is unreal. There is the genuine case which is intended to be relieved by the Income-tax (Second Amendment) Act, 1933, and the question arises as to the nature and extent of the restriction, which will exclude from relief only the case in which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly if the assessee is also a partner of the firm. The Supreme Court has explained in the case of CIT v. Manilal Dhanji [1962] 44 ITR 876 that "this sub-section aims at foiling an individual's attempt to avoid or reduce the incidence of tax by transferring his assets to his wife or minor child or admitting his wife as a partner or admitting his minor child to the benefits of a partnership in a firm in which such individual is a partner". Since there was a clear nexus between the benefits of partnership arising to the minor daughter and the membership of the assessee in the very firm from which the benefits were derived and the purpose of the legislation as explained by the Supreme Court, it did not matter whether the minor daughter was marr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression 'minor child'. The word 'child' can have different meanings in different contexts. Normally, under the Indian Majority Act, 1875, the period of nonage is 18 years and, therefore, a person cannot be considered to be a child if he has attained the age of majority. But, in a purely domestic context it may happen that even an old man of 70 may be considered to be a child by his mother of 90. Again, for the purpose of the Children (Pledging of Labour) Act, 1933, 'child' means a person who is under the age of 15 years. More to the context, in the Child Marriage Restraint Act, 1928, a child is meant a person who if a female is under 15 years of age and now one who is below 18 years. The word 'child' has not been defined in the Act and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avoid or reduce the incidence of tax by admitting that minor child to the benefits of partnership in the firm. Therefore, in the context of section 64 and keeping in view the intention and purpose of that section, we are convinced that the expression 'minor child' can no longer include a married daughter. The revenue relied on the fact that the married daughter has been specifically excluded from the other items in the same section. But, this is a historical accident as noted above. When the section was originally enacted as pointed out earlier there was no need to exclude a married daughter whereas by reason of the metamorphosis in the section, the content of the expression 'minor child' has assumed significance. In the context of this si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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