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Issues: Whether the share income of minor children admitted to the benefits of partnership could be assessed in the hands of the assessee under section 64(1)(iii) of the Income-tax Act, 1961, when the assessee had no income of his own.
Analysis: Section 64(1)(iii) creates a statutory fiction requiring the income of a minor child from admission to the benefits of partnership to be included in the total income of the relevant individual. The provision operates on the basis of the legal fiction itself and is linked to the concept of total income under sections 2(45) and 5 of the Act. Once the statutory conditions are satisfied, the assessee's own source of income is immaterial because the clubbing provision does not depend on the assessee having independent income. The provision introduced by the Taxation Laws (Amendment) Act, 1975, applies from 1 April 1976.
Conclusion: The income of the minor children was rightly assessable in the hands of the assessee notwithstanding that he had no income of his own; the question was answered in favour of the Revenue.
Ratio Decidendi: A clubbing provision based on a statutory fiction applies according to its terms, and the assessee's absence of independent income does not prevent inclusion of a minor child's partnership income in the assessee's total income.
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