9911796707
TMI Blog1987 (11) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the assessee under section 64(1)(vii) ? " The assessee is an individual. He was the owner of the house bearing Municipal No. 8-3-1032, Sreenagar Colony, Hyderabad. On April 14,1975, he settled a half share in the said house in favour of his major son, Sri Paul Ravinder Ponnaiya. By another settlement deed dated July 2, 1976, he settled the other half of the house under a trust for the benefit of his two minor sons, Ezekiel and Immanuel. The elder/major son, Paul, was appointed the trustee. The object of the trust dated July 2, 1976, with which alone we are concerned herein, was to provide for the education of the two minor children. The wife of the assessee was named as the alternative trustee. The trust deed provided that f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectly or indirectly otherwise than for adequate consideration to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his or her spouse or minor child (not being a married daughter) or both." A reading of the above provision shows that it provides that while computing the total income of any individual, all such income as arises directly or indirectly to any person/association of persons from assets transferred directly or indirectly otherwise than for adequate consideration, to the extent to which the income from such assets is for the immediate or deferred benefit of the individual's spouse or minor child, or both, shall be included. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use settled thereunder should be accumulated and paid over to the minors only on their attaining majority. On the other hand, it contemplates that the income arising every year should be spent upon the education and maintenance of the two minor children and that only the amount remaining, if any, should be accumulated and paid over to the minors on their attaining majority. It may well happen that in a given year, no balance may be left for accumulation. It is in the light of the above language of the deed that the Tribunal has answered the question in the manner it did. It opined that the income actually spent upon the minor children should be included in the total income of the assessee, but the income which is accumulated each year canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accounting year in which the income is taxable, so long as it is not deferred beyond the minority, of the child. Once we accept the Bombay High Court's view as correct, it would follow that the course adopted by the Tribunal is the correct one, viz., that the income actually spent upon the minors in a given accounting year should be included in the total income of the parent for the assessment year relevant to that accounting year, and that portion of the income, if any, which has been accumulated for being paid over to the minors on their attaining majority, cannot be so included. As against the view taken by the Bombay High Court, learned standing counsel for the Revenue sought to press into service certain decisions of other High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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