1986 (7) TMI 76

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.... clubbed in the hands of the assessee under section 64 of the Income-tax Act as there was no income assessable in the status of an individual apart from the share income of the minors ? " The assessee is an individual. He has two minor sons who were admitted to the benefits of the partnership in a firm called M/s. Channabasaveshwara Trading Co. He had no separate income of his own. He, therefore, did not include in his return the share income of the minor sons accrued to them from the firm. The Income-tax Officer thought that it was illegal to exclude the minor's income. He assessed the share income of the two minors in the hands of the assessee as required under section 64(1)(iii) of the Income-tax Act. The assessee preferred an appe....

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....dual to include income of spouse, minor child, etc.--(1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly-... (iii) to a minor child of such individual from the admission of the minor to the benefits of partnership in a firm." Clause (iii) of sub-section (1) of section 64 provides that in computing the total income of an individual there shall be included all such income as arises directly or indirectly to a minor child of such individual from the admission of the minor to the benefits of partnership in a firm. Under sub-section (1), there shall be computation of " the total income of any individual ". In other words, what is required to be done thereunder is to ....

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....aterial, in the same mode of the taxable income of the assessee." " Total income " has been defined under section 2(45) of the Income-tax Act, 1961, to mean the total amount of income referred to in section 5 computed in the manner laid down in the Income-tax Act. The income in order to come within the purview of that definition may comprise of " profits and gains representing both positive or negative profits or it may be " nil profit It may not be, therefore, proper to state that if an individual has got nil income, the minor's income shall not be included in his total income. Such an interpretation would defeat the purpose of section 64(1). On the contrary, the interpretation that we have accepted would effectuate the intention of the....