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TMI Blog1983 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... is decision, whether it was a pure business decision, or part of a family arrangement, or a downright taxsaving device. We can only go by the results; or rather, by the way the results were put to argument before us. For, the admission of one's minor daughter to the benefits of partnership in a firm in which one is a partner is fraught with tax consequences. The assessee must have known that he was playing with s. 64(2)(ii) of the I.T. Act, 1961, not by having six minor daughters, but by getting them admitted in his partnership firms. What apparently emboldened the assessee must have been the phenomenon of his having a HUF as a separate subject of charge. If we may be permitted an aside, this ancient institution of Hindu genius, the undivided family, had its work cut out, nowadays as an elementary tax avoidance device described euphemistically as a tax shelter. Voltaire said that if there were no God, it would be useful to invent one. The vast community of Hindu taxpayers must frankly admit that if there were no such thing as a HUF, it would be useful to invent one, at least for tax purposes. Be that as it may, the assessee in this case was already having the tax blessings of being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as three reported decisions, directly on the subject and directly in his favour. The Tribunal, therefore, accepted the assessee's stand on the aspect of statutory construction and ordered the deletion of the minor's share income from the assessee's individual assessment. We are not going minutely into the figures of assessment. As an indication of the stakes in this case, however, we may mention that the share income of each minor daughter from one of the firms in one of the assessment years was Rs. 19,925 and the aggregate of all the minors' share income amounted to Rs. 1, 19,550. The tax effect of the Tribunal, s decision was to exclude Rs. 1,19,550 from the total income of the assessee. This is not the only consequence of the Tribunal's order. For, on the Tribunal's determination that s. 64(1)(ii) does not apply, the share incomes of the six minor daughters must be separated one from the other, and each share has go to be considered separately in each of the minor's assessments. This last observation, incidentally, brings to the fore one of the implications of s. 64(1)(ii), which we are apt to take for granted. The section, on the surface, only directs the aggregation of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t necessarily involve the clubbing of the minor's share also with the father's share income. But, on our reading of the section, the provision does not even envisage, much less require, the clubbing process. The popular paraphrase of the section is, therefore, quite misleading. All that the text of the section lays down is that the minor child's share must be included in the total income of the individual whose child the minor is. If we can name anything in the section as some sort of a requirement or as a condition precedent or pre-condition to the applicability of the provision, we can, at best, point only to one consideration in that regard, namely, the stipulation that both the father and the minor child must have their membership in one and the same firm. We do not think we can read any other or any further requirement in s. 64(1)(ii). We have searched in vain for clues and implications elsewhere in the statute to see whether Parliament has required the presence of the father's share income in his total income as a condition for including therein the minor child's share income from the same firm. Mr. Srinivasamurthy, however, was not disheartened. He referred us to s. 64(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anti-tax avoidance provisions is that they only strike with full force at pre-existing tax devices and pre-existing avoidance schemes. Their striking capacity becomes superfluous no sooner than they are introduced. That, indeed, is the measure of their success. By the same token, the court's construction also must be faithful to the text. We cannot put words into the mouth of Parliament. It is not our job to lay down, a priori, to what lengths an anti-tax avoidance provision must go. Mr. Srinivasamurthy then took his stand on the decisions of other High Courts. He had three on his side, one of the Andhra Pradesh High Court (CIT v. Sanka Sankaraiah [1978] 113 ITR 313), one from the Gujarat High Court (Dinubhai Ishvarlal Patel v. K.D. Dixit, ITO [1979] 118 ITR 122) and one from the Punjab and Haryana High Court (CIT v. Anand Sarup [1980] 121 ITR 873), Mr. Jayaraman came out with a matching citation in the Department's favour of a decision of the Allahabad High Court in Madho Prasad v. CIT [1978] 112 ITR 492. We do not think these cases need occupy much of our time or attention. None of them, the Allahabad decision included, has cared to concentrate on the words of s. 64(1)(ii). T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght distortions in tax burdens brought about by statute-made classifications unless they can be brought within art. 14 of the Constitution, which is very seldom. But where the burden is well and truly laid by Parliament in perfectly neutral language so as to apply to all of a kind without any sectarian differentiation, courts must not be astute in putting any construction on the words of the operative provisions which would have the effect, in practice, of favouring one set of taxpayers but not others. What is more to the point, if the approach of the Tribunal or for that matter, the approach of the cases which we have cited, were valid, it might well be thought that a Hindu who had not succeeded in the swings of family planning might yet succeed in the roundabouts of tax planning. On our construction of s. 64(1)(ii) of the Act, that kind of thing cannot come to pass. Mr. Srinivasamurthy is recorded as telling the Tribunal that it would be exceedingly " strange " that the minor children's share income from firm must get taxed in the father's individual assessment when his own share income from the same firm is not so included. Before us learned counsel used a harsher epithet. He ..... X X X X Extracts X X X X X X X X Extracts X X X X
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