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TMI Blog1985 (10) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 64(iii) of the Income-tax Act, 1961. The Income-tax Officer observed that the assessee was entitled to rebate under section 85 of the said Act upon, inter alia, the said dividends, and assessed the assessee's income accordingly. The Commissioner of Income-tax issued to the assessee a notice to show cause why the Income-tax Officer should not be directed to withdraw the rebate under section 85 of the Income-tax Act, 1961, on the basis that the assessee was not the owner of these shares and the said dividends could not be considered to be dividends in his hands. After hearing the assessee, the Commissioner of Income-tax concluded that the requirements of section 85 had not been fulfilled and directed the Income-tax Officer to withdraw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the spouse of such individual from assets transferred to the spouse by such individual otherwise than for adequate consideration. The relevant portion of section 85 of the said Act which deals with dividends from a new industrial undertaking or hotel business or ship reads thus: " Subject to any rules that may be made by the Board in this behalf, income-tax shall not be payable by a shareholder in respect of so much of any dividend paid or deemed to be paid to him by an industrial undertaking or a hotel or a ship to which section 84 applies as is attributable to that part of the profits or gains on which income-tax is not payable under section 84. " It is apparent that section 64(iii) of the Income-tax Act, 1961, was intended to pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wife or minor child included in the total income of the assessee should be treated as the profit or loss from a business carried on by him for the purpose of carrying forward and setting off of his loss. We find that the Madras High Court has in CIT v. P. N. Ramaswamy [1984] 146 ITR 627 also taken a similar view. It held that a wife's dividend income had to be treated as the income of the assessee where section 64(1)(iii) of the Income-tax Act, 1961, applied. By virtue thereof, income of the assessee and such deemed income of the assessee had to be clubbed together in arriving at his total income and deductions to be made in computing the assessee's total income were available exclusively to the assessee and not to the assessee's wife. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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