9911796707
TMI Blog1982 (4) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... salary income. The assessee's minor son Sri Amit Kumar Agarwal was admitted to the benefits of the partnership in the firm M/s Plywood Traders. The ITO clubbed under s. 64 the income of the minor in the total income of the assessee although the assessee has shown the entire income in Part III of the return but claimed as exempt. 2. Aggrieved over the assessment, the assessee carried the matter in appeal before the AAC and contended that as the Taxation Law Amendment Act, 1975 came into force on 1st Oct., 1975 only the proportionate income of the minor for the period 1st Oct., 1975 to 3rd Nov., 1975, namely, Rs. 1,980 should be clubbed and not the entire income. This contention prevailed on the AAC and accordingly, he directed the ITO to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefits of the partnership in the firm M/s Plywood Traders in which the assessee is also a partners. Further, it is also an admitted fact that the assessee has shown the entire share income of the minor in Part III of the return but claimed as exempt. The history of legislation relating to s. 64 clearly shows that as per the law existing before the amendment brought in by Taxation Laws (Amendment) Act, 1975, the position was that the share income of a minor child admitted to the benefits of partnership in a firm in which the minor's parent was partner was to be included in the parent's total income. On this basis the entire share income of the minor deserves to be included under s. 64 of the IT Act, 1961. The object of the s. 64 was to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. It is clear that the accounting year of the firm M/s Plywood Traders ended on 3rd Nov., 1975, i.e., after the amended law came into force on 1st Oct., 1975. As regards the applicability of the provision of s. 64 brought out by the Taxation Laws (Amendment) Act, 1975, it is to be observed that s. 64 is mandatory in term in that it provides that in computing the total income of any individual there "shall be included" all such income as arises directly or indirectly to the minor child of such individual from the admission of the minor to the benefits of the partnership in a firm. It has been held by the Supreme Court in the case reported in (1951) 20 ITR 572 (SC) that in income-tax matters the law to be applied is the law in force in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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