Deemed income inclusion under family attribution rules does not extend to partner's loss or set-off in assessment.

Section 16(3) of the Income-tax Act, 1922 was construed to require inclusion only of the wife's or minor child's positive income from the specified sources in the assessee's total income. The provision was treated as creating an artificial charge for inclusion, but not as containing any machinery to transfer or set off losses arising in the hands of the wife or minor son against other includible income. A partner's share of loss was not "income" for this purpose, and any right of set-off remained with the person to whom the loss accrued, not with the husband or father.

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Issues: Whether, on a proper construction of section 16(3) of the Income-tax Act, 1922, the loss share of the assessee's wife and minor son in a registered firm could be included in the assessee's total income or set off against other income includible under that provision.

Analysis: Section 16(3)(a) required inclusion in the assessee's total income only of the income of the wife or minor child arising from the specified sources. The provision created an artificial liability to tax and was directed to adding such income to the assessee's total income; it did not contain any machinery for setting off a loss against income under the other sub-clauses. The word "income" in that provision was not construed to include loss, unlike the broader computation principles applicable to an assessee's total income under the Act. The right of set-off belonged to the person to whom the loss accrued, and not to the husband or father for whose assessment the inclusion was made.

Conclusion: The loss share of the wife and minor son was not includible in the assessee's total income under section 16(3), and it could not be set off against their other income before inclusion.

Ratio Decidendi: For the purpose of section 16(3), "income" means positive income from the specified sources and does not include a partner's share of loss, and no set-off of such loss can be claimed in the assessee's assessment absent an express deeming fiction.

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