1972 (4) TMI 30

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....ng assessed to income-tax in respect of the income arising to her from her share in the partnership firm. The income from other sources is being assessed in the hands of her husband under section 16(3)(a)(iii) of the Indian Income-tax Act, 1922, and since the coming into force of the Income-tax Act, 1961, is being assessed under clause (iii) of section 64 of that Act, presumabily because the incom e from those sources arises to the petitioner from assets transferred to her by her husband. Similar assessments were made in respect of the assessment year 1967-68, when the income arising from the partnership was assessed in the hands of the petitioner, while the income arising from other sources was assessed in the hands of her husband. Later o....

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....anation. " 64. Income of individual to include income of spouse, minor child, etc.- In computing the total income of any individual, there shall be included all such income as arises directly or indirectly- (i) to the spouse of such individual from the membership of the in a firm carrying on a business in which such individual is a spouse partner ; (ii) to a minor child of such individual from the admission of the minor to the benefits of partnership in a firm in which such individual is a partner; (iii) subject to the provisions of clause (i) of section 27, to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connection w....

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....of being heard, that it is necessary so to do. " Clauses (i) and (ii) apply when the spouse or the minor child of an individual is a member of a partnership in which such an individual is also a partner. The remaining clauses apply where assets are transferred to the spouse, the minor child or to any other person without adequate consideration. Admittedly, the instant case falls under clause (iii) of section 64. The income arising to the petitioner from sources other than her share in the partnership are included in the assessment of her husband on the finding that such income arises from the assets transferred by the husband to the petitioner without adequate consideration. The Explanation attached to section 64 provides that the ind....