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TMI Blog1987 (4) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... als, the assessee was residing in Dubai, U.A.E., where he was doing his business. The assessee made gifts to his wife, Smt. Sarabjit Kaur Grewal, and to his minor son, Sonu K. Grewal. It was claimed before the Income-tax Officer in the course of the assessment proceedings that the spouse as well as the minor child were both living with the assessee in Dubai, the gifts were made to them in Dubai and the amounts gifted to them were remitted to India and invested and in these circumstances the income arising from these investments will not attract the provisions of section 64(1) of the Income-tax Act, 1961. The Income-tax Officer, however, held that clauses (iv) and (v) of sub-section (1) of section 64 provide for the inclusion in the total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our attention to clause (2) of section 1 of the Income-tax Act, 1961, which lays down that the Income-tax Act, 1961 extends to the whole of India. On this basis it was claimed that the provisions of clauses (iv) and (v) of sub-section (1) of section 64 of the Income-tax Act, 1961 should be read in conjunction with clause (2) of section 1 and if this is done, it will be obvious that the transfers between non-residents outside India will not attract the provisions of either clause (iv) or clause (v) of sub-section (1) of section 64 of the Income-tax Act, 1961. Another point made out by him was that section 64 of the Income-tax Act, 1961 was a deeming provision to include in the total income of an individual, income which arises to somebody e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a non-resident, the income arising to his wife or minor child from assets transferred directly or indirectly to them will attract the provisions of clauses (iv) and (v) of sub-section (1) of section 64 of the Income-tax Act, 1961. Shri Vohra also read out to us the provisions of clauses (iv) and (v) of sub-section (1) of section 64 of the Income-tax Act, 1961, which nowhere mentioned that this will apply only to those incomes, which arise directly or indirectly from assets transferred within India or where the assessee or his wife or minor son was resident in India, and not otherwise. Summing up his arguments Shri Vohra vehemently contended before us that the arguments advanced by the assessee's learned counsel did not have any merit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement to live apart to the spouse. It would, therefore, not be within the competence of the judicial authorities to add to the words occurring in clauses (iv) and (v) of sub-section (1) of section 64 of the Income-tax Act, 1961 "from assets transferred directly or indirectly" the further words "within India" or the words "where the individual or the spouse or the minor child is resident in India". There is lot of merit in the argument of the learned departmental representative, Shri Vohra, that the charge of income-tax is not by clause (2) of section 1 of the Income-tax Act, 1961 but by section 4 thereof, which lays down the charge of income-tax in respect of the total income. Besides, the scope of total income is laid down by section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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