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TMI Blog1982 (1) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... on 64(1). Apart from the income of the wife, the dividends arising to the shares held by the minor children of the assessee were also included under section 64. We may mention that there is no dispute that section 64 would apply in this case. However, the assessee had claimed that deduction should be allowed in respect of the contribution made to the provident fund by the assessee's wife from her salary income as well as the insurance premium paid by her on the policy taken by her under section 80C of the Act and only the balance was to be included. In the case of the minor children, the claim was that the provisions of section 80L of the Act would be applicable and to the extent of income assessable, relief ought to be allowed. Both these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and their decision should be followed. He further submitted that section 64 is not a deeming provision; it is only a provision which permits the ITO to add certain income. So, it is essential to see what is the income which is to be included. He then referred to the decision of the Bombay High Court in CIT v. Bai Navalbai N. Gamadia [1948] 16 ITR 109 and submitted that where an income was earmarked for charity, although the provisions of section 64 would apply, the Court has held that no income could be assessable. 5. We have considered the facts of the case. The issue is what is the amount to be included under section 64. The relevant provision of the section reads as follows : "(1) In computing the total income of any individual, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computed in accordance with the provisions of this Act before making any deduction under this Chapter, i.e., Chapter VIA, or under section 280-O. Therefore, on a plain reading of the section, there is no case for allowing any deduction under section 80C at the stage of computing the gross total income. Up to this stage what the ITO has done is correct. 6. On the above analysis, we will have to reject the contention of Shri Patil that section 64 is not a deeming provision. There is a direct authority to hold that under section 64 a legal fiction is created. This is the decision of the Bombay High Court in the case of CWT v. C. Rai [1979] 119 ITR 553. The Bombay High Court in the said case was construing the provisions of section 4(1)(a)(i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, we must say at once that it has fallen into an error. For this we rely upon the discussion hereinbefore appearing which clearly shows that the 'total income' and 'gross total income' are not synonymous. They are mutually exclusive. The concept of each is different from the other. In this view the 'total income' chargeable under section 5 is not the same 'gross total income' defined in section 80B(5) of the Act. Therefore, Question No. 2 is liable to be answered in the negative." Thus, it is clear from the authorities that the income includible under section 64 is part of the gross total income. 7. At this stage itself, we may point out that the decision of the Kerala High Court in Yeshodamma's case, on which reliance was placed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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