1982 (3) TMI 22

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....Ltd. held by the assessee's wife, Smt. Shardadevi, is taxable in the hands of the under section 64(iii) of the I.T. Act, 1961 ? " and Assessment year 1969-70: " Whether, on the facts and in the circumstances of the case, the dividend income of Rs. 16,000 on 160 bonus Shares of M/s. Birla Brothers Pvt. Ltd. held by the assessee's wife, Smt. Shardadevi, is taxable in the hands of the assessee under section 64(iii) of the Income-tax Act, 1961 ? " The present respondent is the executor of the will of R. D. Birla the original respondent, who was the assessee. We propose to refer to the said R. D. Birla as "I the assessee". Some time prior to 1945, the assessee had transferred 400 shares of Birla Brothers Private Ltd. to his wife, Shardadev....

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.... assessee under the provisions of s. 64(iii) of the said Act, as they stood at the relevant time. The decision of the AAC was upheld by the Income-tax Appellate Tribunal in appeals preferred by the Revenue to the Tribunal. It is from the consolidated decision of the Tribunal in the said appeals that the present reference arises and the aforesaid questions have been referred to us. The relevant portion of s. 64 of the said Act, at the material time ran thus : " In computing the total income of any individual, there shall be included all such income as arises directly or indirectly . ...... (iv) subject to the provisions of clause (i) of section 27, in a case not falling under clause (i) of this sub-section, to the spouse of such ind....

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.... him to his minor child. It is true that this decision does not pertain directly to the provisions of s. 64(iv) of the said Act as they stood at the relevant time. But we find that the provision, which came up for construction in that case was in pari materia with the provision before us. The relevant portion of s. 16(3) of the Indian I.T. Act, 1922, which has been set out at p. 579 of the aforesaid report, reads thus : "In computing the total income of any individual for the purpose of assessment, there shall be included (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly ...... The portion quoted here is from s. 64(1)(iv) as it stands after substitution by the T.L. (Amend.) Act, 197....