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TMI Blog1985 (2) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... lates to income exempt from tax. The assessment was made by the ITO on 14-2-1980 under section 143(3) of the Act, on the declared income of Rs. 17,400. 2. The ITO, subsequently, came to know that the assessee's minor sons, Shri Prabhu Prakash, Som Prakash and Jyoti Prakash had been admitted to the benefits of partnership in the firm of Ballabh Das Kanhaiyalal, Palia, District Lakhimpur Kheri. He was of the view that the incomes falling to the shares of the above minors were includible in the assessment of the assessee in terms of section 64(1)(iii) of the Act. This section reads as under : "(1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly-- (iii) to a minor c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was first contended that the shares of the minors related to the period, which expired on 9-9-1975 and since the amendment to section 64(1)(iii) was introduced with effect from 1-4-1976, i.e., after this date, the said income could not be included in the assessment of the assessee. The contention was rejected by the AAC observing that in view of the explicit provision of section 64(1)(iii), the income of the minors was taxable in the hands of the assessee. He also observed that since the amendment to the above section was applicable for the assessment year 1976-77, the inclusion of the income in the assessment of the assessee was justified in the above assessment year. It was next contended before him that the minors were separately asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is laid down after the amendment in the form of return carried out with effect from 1-4-1972 providing that 'income arising to spouse or minor child or any other person as referred to in Chapter V of the Act' there is no longer any scope for arguing that the assessee is not bound to disclose such income in the return to be furnished by him. 6. It was next contended by the learned counsel for the assessee that the original section 64(1)(ii) [corresponding to section 64(1)(iii) of the new section] before its amendment by the Taxation Laws (Amendment) Act, 1975, with effect from 1-4-1976, roped in only that income which arose directly or indirectly to a minor child of such individual from the admission of the minor to the benefits of partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 64(1) was made effective from 1-4-1976. It, therefore, applies to the assessment year 1976-77. It is also a substantive section and the law as on 1-4-1976, must relate to the assessment year of that year. The Supreme Court in the case of Jain Bros. v. Union of India [1970] 77 ITR 107 has laid down that it is for the Legislature to decide from which date a particular law should come into operation. We, therefore, reject this contention of the assessee, particularly when the original return was filed on 16-3-1979 and there could have been no doubt by that time that section 64 as amended was applicable to the assessment year 1976-77. 8. Another submission made before us was that since the source of investment in the names of the minor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Supreme Court in CIT v. Murlidhar Jhawar Purna Ginning Pressing Factory [1966] 60 ITR 95. That decision, however, relates to the partners of a firm or to an AOP. It was held that the partners of an unregistered firm might be assessed individually or they might be assessed collectively in the status of an unregistered firm and the ITO could not seek to assess the one income twice, i.e., once in the hands of the partners and again in the hands of the unregistered firm. This principle was earlier extended by the Supreme Court to an AOP and its members in CIT v. Kanpur, Coal Syndicate [1964] 53 ITR 225. This principle, however, cannot be extended to the present case, which relates to the minors and their father. We, therefore, r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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