9911796707
TMI Blog1983 (3) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... idend income. The assessee's dividend income was Rs. 18,425. A sum of Rs. 9,666 was the dividend income derived by his wife. It is not in dispute that such dividend income of the wife has to be treated as the assessee's income under s. 64(1)(iii) of the I.T. Act, 1961. The assessee claimed that before such dividend income of his wife is to be treated as his income, the relief adumbrated under s. 80L of the Act should be given effect to, i.e., before his wife's dividend income is added on to his income, the statutory deduction envisaged under s. 80L should be made and that, consequently, what has to be added on to his income is the wife's dividend income minus the statutory deduction. This contention of the assessee did not find favour with the ITO. The assessee's appeal to the AAC was not successful, because the said appellate authority held that as s. 80L only refers to an assessee and as the wife is not an assessee, s. 80L cannot be availed of even before the assessee's wife's dividend income is clubbed with his income. However, the Income-tax Appellate Tribunal, on further appeal by the assessee, held that it is only the dividend income of the wife minus Rs. 3,000 which can be b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apart, even then the property will become the property of the transferee and will not be deemed to be of that individual. This case relates to a spouse and, therefore, the application of the provision to a minor child is left out of consideration. Under s. 64(1)(iii), the income of an individual from assets transferred directly or indirectly to the spouse by such individual will be treated as the income of that individual. The reference to s. 27(i) in s. 64(1)(iii) is obviously to avoid friction between section 27(i) and s. 64(1)(iii). For instance, if an individual should transfer his property to his spouse for adequate consideration or in connection with an agreement to live apart, then that property will be the property of the transferee-spouse, but shall not be deemed to be that of the individual and the income from such property is excluded from the deeming addition of the income of such transferee as envisaged under s. 64(1)(iii) of the Act. This impact of s. 27(i) on s. 64(1)(iii) was not properly understood by the Tribunal. It is already pointed out that the wife's dividend income has to be treated as the income of the assessee under s. 64(1)(iii). Learned counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses incurred in earning that income or the loss occasioned thereto. To put it differently, it is the net income that has to be taken into account even if the wife's dividend income were to be tacked on to the income of the assessee by virtue of s. 64(1)(iii) of the Act. This aspect does not at all arise for consideration in this case, because the question that was referred to this court is restricted to the statutory deduction of Rs. 3,000 and there is, therefore, no need to examine the connected emphasis laid on the expression " subject to the provisions of s. 5(1) of the Act ". As in the instant case, deduction is not claimed by way of commission or remuneration to a broker or any other person for the purpose of realising such dividend on behalf of the assessee, there can be no room for the application of s. 57(i) as submitted by the learned counsel for the assessee. Section 80L can be availed of only by an assessee as is obvious from the very opening expression, " Where the gross total income of an assessee ..........." (emphasis supplied by us). A reference to s. 80A will reveal the deduction to be made in computing the total income of the assessee. For, s. 80A provides th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee brought to our notice the decisions in CWT v. Vasantha [1973] 87 ITR 17 (Mad), Karimtharuvi Tea Estates Ltd. v. State of Kerala [1963] 48 ITR 83 (SC), Bhagwan Dass Jain v. Union of India [1981] 128 ITR 315 (SC), CIT v. P. K. Kochammu Amma [1980] 125 ITR 624 (SC) and V.D.M. RM. M. RM. Muthiah Chettiar v. CIT [1969] 74 ITR 183 (SC). At the outset, we must state that from none of these decisions, can we derive any assistance or guidance in the disposal of this tax case. The decision in CWT v. Vasantha [1973] 87 ITR 17 (Mad), arose under the W.T. Act and this court was concerned with the words " net wealth " and " valuation date ", which were not defined in the W.T. Rules in relation to agricultural lands, and it was held that in computing the value of the net wealth of an assessee who was a partner in two firms which owned agricultural lands, the value of agricultural lands will have to be excluded. In Karimtharuvi Tea Estates Ltd. v. State of Kerala [1963] 48 ITR 83 (SC), all that the Supreme Court held is that the State Legislature cannot enact such a provision which would make agricultural income from tea plantations higher than what it would be if computed in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
