TMI Blog1993 (1) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that share income of the minors alone should be clubbed under section 64 of the Income-tax Act. But the Income-tax Officer rejected the contention of the assessee and clubbed the interest income received by Minor Abdul Rawuf with the income of the assessee. 2. On appeal, the CIT(Appeals) justified the clubbing of income derived on the loans advanced by the Minor Abdul Rawuf to the firm. Hence, the further appeal. The CIT(Appeals) also justified the action of the Assessing Officer in respect of the deduction under section 80L of the Act. 3. It was argued on behalf of the assessee that the minor had advanced the amount out of his independent source of income. It has nothing to do with the share income derived by him from the firm, M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clubbing of interest income with the income of the assessee is justified. 6. As for section 80L deduction in the case of another partner, Minor Abdul Rafeeq, it can be allowed only once and that too in the hands of the assessee. 7. We have heard the rival submissions and perused the records. The controversy in the case of Minor Abdul Rawuf is not whether the share income from the firm cannot be clubbed in the hands of the assessee. The controversy is with regard to the clubbing of interest income arising to the minor on the funds loaned to the firm several years before. From the paper book furnished and from the perusal of account of Minor Abdul Rawuf with the firm, it is seen that he had a loan account even prior to 1-4-1977 and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. The assessee had furnished before us the copy of the assessment order in the case of the minor for and from the assessment years 1976-77 to 1983-84. In the assessment for 1976-77, the Assessing Officer after assessing the interest income in the minor's hands has noted as follows:---- " Shri Abdul Rawoof - minor is admitted to the benefits of partnership in several firms. The share income from these firms is not considered in this assessment as such income, if any, has to be included in the total income of Haji A. Abdul Khader Sahib for assessment year 1976-77. " This observation strengthens the plea of the assessee that the Income-tax Officer was aware of section 64 of the Act and must have satisfied himself about the nucleus of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h did not have its origin from the transfer of the fund by the assessee, cannot be clubbed in the hands of the assessee. 11. The appellant objects to the restriction of the deduction under section 80L of the Act, from the gross total income of the assessee in respect of the dividend received by another minor Shri Abdul Rafeeq and contends that only the net interest is includible after deduction under section 80L. He relies on the Karnataka High Court decision in S.N. Nayak's case. We do not accept this contention of the assessee because the Karnataka decision is on a different issue, as it dealt with the computation of the income itself for the purpose of the inclusion in the total income of the assessee. Section 80L is concerned with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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