TaxTMI 
TaxTMI 
1990 (2) TMI 46
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....ission to the benefits of partnership was not liable to be included in computing the total income of the assessee ?" The assessee in this case is one Manakram. The years of assessments are 1976-77 and 1977-78. Dilip Kumar and Suresh Kumar, two minor sons of the assessee, were admitted to the benefit of the partnership firm by name "Messrs. United Service Station, Patna". Yet other two minor sons, Ashok Kumar and Brijlal, were admitted to the benefit of another partnership firm, styled as "Messrs. Krishna Dal Mill". The assessee himself was partner in both these firms, as representative of the Hindu undivided family. The Income-tax Officer, while assessing the total income in the hands of the assessee included the income of the minor sons....
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....sustained by him or by such other person, or of the amount of refund due to him or to such other person". According to this expression as used in the Act, the term "assessee" should cover a person who is liable for assessment of income belonging to his minor children, which is fictionally treated as his income for purposes of assessment. "Total income" has been defined in section 2(45) of the Act, to mean the total amount of income referred to in section 5, computed in the manner laid down in the Act. It will thus include profits and gains, representing both positive or negative profits, or it may be nil profit. Section 64 speaks of income of certain persons to be included, while computing the total income of any individual. The clause rele....
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.... benefits of partnership in a firm, notwithstanding the fact that the total income of such an individual assessee is either less than the minimum liable to tax or that such an individual has no income at all from any source other than the income included under section 64(1)(iii) of the Act. It is not permissible to exclude income mentioned in section 64 of the Act, if the income assessable in the hands of an assessee may be his own income or the income of any other person in respect of which the assessee is assessable under the provisions of the Act. The provisions in section 64 form part of an indivisible scheme for the purposes of assessment of income in the hands of the assessee, in respect of which he is assessable under the Act and the....
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....of an individual on their admission to the benefits of partnership in a firm under section 64 (1) (iii) of the Act, in the total income of such individual assessee, notwithstanding the fact that the total income of such individual assessee is either less than the minimum liable to tax or that such an individual has no total income at all from any source other than the income under section 64(1)(iii) of the Act." We are in full agreement with the view so taken. Similar view has been expressed by the Karnataka High Court in CIT v. L. N. Horkeri [1986] 162 ITR 513. The learned judges said that the income, in order to come within the purview of the term "total income" as defined in section 2(45) of the Act, may comprise "profits and gains" r....
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....ficer has to enquire into the question as to who has the greater income between the parents of a minor child. If the Income-tax Officer comes to the conclusion that the income included in the return filed by an individual is liable to be assessed by reason of Explanation I to section 64(1), in the hands of another parent, the Income-tax Officer would then be under an obligation to disregard the income returned by the assessee in whose hands it is not assessable because of Explanation I to section 64(1) and assess it in the hands of the real person according to Explanation 1. Shri Nema, however, referred to a decision of the Madras Bench of the Income-tax Appellate Tribunal in ITO v. S. Krishna Iyer [1983] 2 Selected Orders of Income-tax ....