1983 (3) TMI 71

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....essee made a declaration that with effect from 24-6-1972 his share of income and capital in the said three firms would belong to the family consisting of himself, his wife, two major sons and two major daughters. This fact was accepted by the ITO and in the assessment year 1973-74 as the ITO included half share of the HUF in the said three firms in the total income of the assessee by invoking the provisions of section 64(2) of the Income-tax Act, 1961 ('the Act'). Similarly, in respect of the assessment years 1974-75 and 1975-76, the ITO included half share of the HUF in the said three firms in the total income of the assessee. In the assessment year 1976-77, the ITO included the full share of the HUF in the said three firms in the total in....

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....l. Inviting our attention to the provisions of section 64(ii) as they stood at the relevant time, the learned representative for the department submitted that under that provision only the positive income is to be clubbed with the other income of the assessee and not a share of loss. In support of his submission, the learned representative for the department invited our attention to Explanation 2 to section 64(2) which was inserted with effect from 1-4-1980 by the Finance Act, 1979. The said Explanation states that for the purposes of this section, 'income' includes 'loss'. The learned representative for the department, therefore, submitted that since we are dealing with the assessment year 1977-78, the assessee is not entitled to get the b....