TaxTMI 
TaxTMI 
1985 (5) TMI 70
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....Income-tax Act, 1961 ('the Act') the ITO has clubbed the share income of the husband in the assessee's hands as the income of the assessee is higher than that of her husband (Explanation 1 to section 64). The husband of the assessee has paid life insurance premium. The deduction under section 80C of the Act has, however, not been allowed by the ITO. 2. On appeal, it was claimed that as the income....
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....ands such income is included. The learned departmental representative, on the other hand, submitted that section 64 does not provide for inclusion of total income but income arising to the spouse from the partnership firm, assets transferred, etc. Therefore, only that income which is computed under a particular head after allowing deductions available under that section, is to be considered for in....
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....guments advanced by both sides. As rightly stressed by the learned departmental representative, income specified in section 64 is to be included in the hands of the spouse or the transferor, as the case may be. It does not refer to the total income. The first stage would be to determine the income arising to the spouse under section 64. Naturally, while determining this income, all the permissible....
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....ion was also drawn to the distortion introduced by Explanation 1 to section 64. In the present case, if the income of the husband had been more than that of the wife, then the wife's income would have been included in the hands of the husband and relief under section 80C would have been available to the husband. It might so happen that income might vary from year to year and like a pendulum the in....