9911796707
TMI Blog1987 (11) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue, referred to us by the Income-tax Appellate Tribunal, Cochin Bench: " Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that only 50% of the income from the property transferred is includible in the hands of the assessee under section 64(1)(iii) of the Income-tax Act ? " During the years relevant to the assessment years 1972-73 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that what was includible as his income, in the case of assets transferred directly or indirectly to his spouse otherwise than for adequate consideration, was only such portion of the income derived from such assets as was in proportion to the inadequacy of the consideration. This order was confirmed by the Appellate Assistant Commissioner. However, the Tribunal, reversing the findings of the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... husband and/or the father the income from the transferred assets to the extent only that the consideration is found to be inadequate." This reasoning was followed by the Madras High Court in the decision referred to above. With respect, we do not agree that the reasoning adopted by the Bombay High Court is warranted by the construction of section 64(1)(iii) of the Act. What the sub-clause in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place. The section does not postulate the principle of proportionality determined by the inadequacy of consideration. Reference to section 27(i) in section 64(1)(iii) is only to provide that in the computation of the income attracted by that provision, regard must be had to the special provisions referred to in section 27, namely, sections 22 to 26. That, however, does not affect the object of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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