9911796707
TMI Blog1983 (3) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... n 8-7-1971, the assessee made a declaration that with effect from 24-6-1972 his share of income and capital in the said three firms would belong to the family consisting of himself, his wife, two major sons and two major daughters. This fact was accepted by the ITO and in the assessment year 1973-74 as the ITO included half share of the HUF in the said three firms in the total income of the assessee by invoking the provisions of section 64(2) of the Income-tax Act, 1961 ('the Act'). Similarly, in respect of the assessment years 1974-75 and 1975-76, the ITO included half share of the HUF in the said three firms in the total income of the assessee. In the assessment year 1976-77, the ITO included the full share of the HUF in the said three fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal before the Tribunal. Inviting our attention to the provisions of section 64(ii) as they stood at the relevant time, the learned representative for the department submitted that under that provision only the positive income is to be clubbed with the other income of the assessee and not a share of loss. In support of his submission, the learned representative for the department invited our attention to Explanation 2 to section 64(2) which was inserted with effect from 1-4-1980 by the Finance Act, 1979. The said Explanation states that for the purposes of this section, 'income' includes 'loss'. The learned representative for the department, therefore, submitted that since we are dealing with the assessment year 1977-78, the assessee is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Firstly, it must comprise the 'total amount of income, profits and gains referred to in section 4(1)'. Secondly, it must be 'computed in the manner laid down in the Act'. If either of these conditions fails, the income will not be a part of the total income that can be brought to charge. " In this view of the matter, in our opinion, the amendment made with effect from 1-4-1980 simply incorporates the law laid down by the highest Court of the land. Again, it is pertinent to note that the ITO had, in fact, allowed such set off in respect of the assessment year 1976-77 as mentioned above. We, therefore, do not find any infirmity in the order of the AAC. 8. Before we part with this appeal, we may mention that the AAC has not allowed the e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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