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TMI Blog1985 (2) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... by the ITO on 14th Feb., 1980 under s. 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, S/Shri Prabhu Prakash, Som Prakash, and Jyoti Prakash had been admitted to the benefits of partnership in the firm of M/s Ballabh Das Kanhaiyalal. Palia, district Lakhimpur Kheri. He was of the view that the income falling to the shares of the above minors were includible in the assessment of the assessee in terms of s. 64(1) (iii) of the Act. This section reads as under: "S. 64 (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 child of such individual from the admission of the mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to the period, which expired or 9th Sept., 1975 and since the amendment to s. 64(1) (iii) was introduced w. e. f. 1st April, 1976 i. e. after this date, the said income could not be included in the assessment of the assessee This contention was rejected by the AAC observing that in view of the explicit provision of s. 64(1) (iii) of the Act, the income of the minors was taxable in the hands of the assessee. He also observed that wince the amendment to the above section as applicable for the asst. yr. 1976-77, the inclusion 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 assessed by the same ITO and without considering their assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at after the amendment in the form of return carried out w. e. f. 1st April, 1972 providing that "income arising to spouse, 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 ld. counsel for the assessee that the original s. 64 (1) (ii) (corresponding to s. 64(1) (iii) of the new section) before its amendment by the Taxation Law (Amendment) Act, 1975, w. e. f. 1st April, 1976 roped in only that in come which arose directly or indirectly to a minor child of such individual from the admission of the minor to the benefits or partnership in a firm in which s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 1st April, 1979. It, therefore, applies to the asst. yr. 1976-77. It is also a substantive section and the law as on 1st April, 1976 must relate to the assessment of the year. The Supreme Court in the case of Jain Brothers & Ors. vs. Union of India (1970) 77 ITR 107 (SC) 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 16th March, 1979 and there could have been no doubt by that time that s. 64 as amended was applicable to the asst. yr. 1976-77. 8. Another submission made before us was that since the source of investment in the names of the minors was not the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court in CIT vs. Murlidhar Jhawar and Purna Ginning and Pressing Factory (1966) 60 ITR 95 (SC). That decision however, relates to the partners of a firm or to an Association of Persons. 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 Association of persons and its members in CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC). This principle, however, cannot be extended to the present case, which relates to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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