1973 (7) TMI 20

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..... ot included in the return. He claimed that the shares and securities held by him were transferred to a trust for the benefit of his daughter and, as such, the income therefrom formed a part of the trust estate and was not liable to be taxed in his hands. The Income-tax Officer examined the deed of trust and came to the conclusion that the assets had been transferred by the assessee without any consideration and for the benefit of his minor child. Thus, a sum of Rs. 6,768, the income of the trust during the relevant year, was taxable in the hands of the assessee. Accordingly, he included the said sum in the assessee's income. The assessee went up in appeal before the Appellate Assistant Commissioner. He carefully examined the terms of the t .....

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..... oner in regard to the entire amount of Rs. 6,768 including the amount of Rs. 2,412. On being asked by the Commissioner of Income-tax to make a reference to this court the Tribunal has done it and referred the following question of law : "Whether, on the facts and in the circumstances of the case, Rs. 2,412 should have been included in the total income of the assessee in the relevant year under section 16(3)(b) of the Indian Income-tax Act, 1922 ? " Under section 16(3) of the Act certain income of a wife or a minor child of an assessee can be included in the total income under clause (a). Clause (b) provides : " In computing the total income of any individual for the purpose of assessment, there shall be included so much of the income of .....

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..... ome in the relevant year of account. But if no income accrues, or no benefit is derived and there is no income at all (so far as the minor child is concerned), then it is not consistent with the scheme of section 16 that the income or benefit which is non-existent so far as the minor child is concerned, will be included in the income of his father ". Finally, it was observed at page 884: "When, however, the minor child derives no benefit under the trust deed in the year of account, it is not consistent with the scheme of section 16 to say that even though there is no accrual of any income or benefit in the year of account in favour of the minor child, yet the income must be included in the total income of the individual concerned." On the .....

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