TMI Blog2004 (11) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that the transfers made by Smt. Sushila Devi in favour of Smt. Chander Kala and by Shri Om Dutt in favour of Smt. Tara Devi were part of the same transaction and a device to by-pass the provisions of section 64(1)(vi) and the Assessing Officer did not commit any illegality by declaring that the same was includible in the income of Shri Om Dutt and Smt. Sushila Devi.- Tribunal rightly reversed the order passed by the Appellate Assistant Commissioner and restored the one passed by the Assessing Officer. - - - - - Dated:- 30-11-2004 - Judge(s) : G. S. SINGHVI., M. M. AGGARWAL. JUDGMENT The judgment of the court was delivered by G.S. SINGHVI J.- In compliance with the order dated August 25, 1986, passed by this court in I.T.C. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 29, 1980 as a gift. Smt. Tara Devi also invested a sum of Rs. 10,000 out of the gift of Rs. 15,000 received by her from Shri Om Dutt on March 6, 1981. For the assessment year 1982-83, M/s. Verma Brothers and Toka Store, Sirsa, filed a return declaring a total income of Rs. 41,074. The Income-tax Officer, "A" Ward, Sirsa (hereinafter described as "the Assessing Officer"), after issuing notice to M/s. Verma Brothers and Toka Stores and considering the explanation furnished by Shri Om Dutt, held that the gifts; made by Smt. Sushila Devi and Om Dutt were a part of the same transaction and a device to bypass the provisions of section 64(1)(vi) of the Income-tax Act, 1961 (for short, "the Act"), and the same were liable to be included in the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money through cross-gifts and, therefore, the provisions of section 64(1)(vi) have rightly been applied by the Income-tax Officer and he has rightly clubbed the share income from the firm of the cross-donees in the income of their respective father-in-law and mother-in-law." We have heard learned counsel for the parties. In CIT v. C.M. Kothari [1963] 49 ITR (SC) 107, the Supreme Court interpreted section 16(3)(a) (iii) of the Indian Income-tax Act, 1922, which is pad materia to section 64(1)(vi) of the Act, and laid down the following proposition: "That if two transfers were interconnected and were parts of the same transaction in such a way that they could be said to have been adopted as a device to avoid the implications of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the firm K, in which the assessee and his father were both partners. In the assessments of the income of the assessee for the assessment years 1959-60 to 1969-70, the Income-tax Officer took the view that the gift of Rs. 1,50,000 made by the assessee amounted to an indirect transfer of his assets to his wife and minor son within the meaning of section 16(3)(a)(iii) of the Indian Income-tax Act, 1922, and section 64(iii) and (iv) of the Income-tax Act, 1961. He, therefore, included the interest earned by the assessee's wife and the minor son on the above amounts in the income of the assessee. The assessee filed appeals before the Appellate Assistant Commissioner which were dismissed. The assessee filed further appeal to the Income-tax App ..... X X X X Extracts X X X X X X X X Extracts X X X X
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