Clubbing of minor's partnership income upheld under amended income tax law for the parent's assessment

Income arising to minor sons from admission to the benefits of partnership was includible in the parent's total income under section 64(1)(iii) for the assessment year 1982-83 because the amendment made by the Taxation Laws (Amendment) Act with effect from 1 April 1976 applied to the year in question. The governing position was that, after the amendment, such minor's share income is clubbed in the hands of the parent even where the assessee has no independent income of his own. The question was answered in the negative, and inclusion in the assessee's hands was upheld in favour of the Revenue.

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Issues: Whether the share income arising to the minor sons of the assessee from admission to the benefits of partnership in a firm was includible in the hands of the assessee under section 64(1)(iii) of the Income-tax Act, 1961 for the assessment year 1982-83.

Analysis: The amendment to section 64(1)(iii) made by the Taxation Laws (Amendment) Act with effect from 1 April 1976 applied to the assessment year in question. The controlling legal position was already settled that, after the amendment, income arising to a minor child from admission to the benefits of partnership in a firm is includible in the total income of the parent, even if the assessee has no independent income of his own.

Conclusion: The question was answered in the negative, and the income of the minor sons was held includible in the hands of the assessee, in favour of the Revenue.

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