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TMI Blog1979 (11) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... . Venkateswaran is assessed in his individual capacity in the assessments under present appeals. The stated facts are that he was a partner in the firm of M/s N. Natesa Iyer Co., Pudukkottai since 1955. There was a capital contribution of Rs. 10,000 by him, which was stated to be out of his self acquired funds. Upto the asst. yr. 1970-71 he was assessed in the status of an individual. The credit balance in the current account of the assessee in the books of the partnership firm as on 31st March,1970 amounted to Rs. 2,02,542. On 31st March, 1970 the assessee by means of a declaration made on stamped paper had thrown this amount of Rs. 2,02,542 into hotchpot of the HUF consisting of himself, his wife, his minor son Eswara Prasad and his two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40,000 The WTO, however, included in the assessments the two sums of Rs. 2,49,712 and Rs. 2,78,787 respectively as under: Description Assessment year . Rs. Rs. Amount standing in the name of the minor HUF of Venkateswaran 74,096 82,099 Amount standing in the name of minor Eswara Prasad 1,25,440 1,40,492 Amount in the name of minor daughters 50,176 56,196 Total 2,49,712 2,78,787 The increase for both asst. yrs. was on account of the fact that interest had been credited by M/s. N. Natesa Iyer Co., to the various folios for the above asst. yrs. The assessee contended before the WTO that under s. 4(1A) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been transferred by the individual directly or indirectly, otherwise than for adequate consideration or.. Whether the assets referred to in any of the sub-clauses aforesaid are held in the form in which they were transferred or otherwise. (1A) Whether, in the case of an individual being a member of a HUF, any property having been the separate property of the individual has, at any time after the 31st Dec., 1969, been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family (such property being hereinafter referred to as the converted property), then notwithstanding anything contained in any other provision of this Act or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constructed a house on a plot of land acquired by her out of monies gifted earlier. For the purposes of WT assessment the assessee claimed that the value of the asset to be included in his assessment under s. 4(1)(a) of the WT Act was only Rs. 90,000 and not the entire value of the house to the extent of Rs. 1,60,000 as on the valuation date. As observed by the Madras High Court at page 541, the question at issue was whether the value of the asset as on the valuation date has to be taken into account or the value of the asset as on the date of the transfer has to be taken into account. The High Court held that since the sum of Rs. 90,000 transferred by the assessee to his wife has been now converted into existing asset of the house, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the asset in the form of interest credited to the asset account. In this connection we may refer to the earlier Bombay High Court decision in 36 ITR 577 (Popatlal Bhikamchand vs. CIT) which is apposite and analogous to the case before us. It was held therein regarding the corresponding provision, viz., s. 16(3)(a)(iv) of the IT Act, 1922, that the provision for the inclusion of the income arising from the asset transferred by an assessee to his spouse or minor child (present s. 64 of the IT Act, 1961) does not apply to the income arising from the accretion to such asset. Thus when an assessee transfers the share in a company as gift to his minor son, the bonus shares by the son in respect of such asset would not be 'assets transferred' to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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