Commissioner of Income Tax vs K.R. Natarajan

N.V. Balasubramanian, J.—At the instance of the Revenue, the Appellate Tribunal has stated a case and referred the following question of

law u/s 256(1) of the Income Tax Act, 1961, for the opinion of this court :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the share income arising to the

minor sons of the assessee by their admission to the benefits of partnership in a firm cannot be included in the hands of the assessee as his parent

u/s 64(1)(iii) of the Income Tax Act, 1961, for the assessment year 1982-83 ?

At the time of hearing the tax case reference Mr. C. V. Rajan, learned counsel for the Revenue, stated that this court in the case of CIT v. P.

Alwarsamy [1995] 211 ITR 353, has held that the income arising to the minor sons of the assessee as a result of their admission to the benefit of

partnership in a firm is includible in the total income of the assessee after the amendment of section 64(1)(iii) of the Act, notwithstanding the fact

that the assessee had no income of his own from any source whatsoever. The amendment was made by the Taxation Laws (Amendment) Act,

with effect from April 1, 1976. The tax case relates to the assessment year 1982-83 and the amendment would squarely apply to the facts of the

present case. Mr. R. Janakiraman, learned counsel for the assessee, does not dispute the position that the income of the minor son who is admitted

to the benefits of the partnership is liable to be included in the hands of the assessee. Following the above cited decision, we answer the question of

law referred to us in the negative and in favour of the Revenue. No costs.