TMI Blog1998 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... -82. The assessee is a non-resident. He had no income in India, except the secured income realised from the investment of the amounts gifted by him to his minor children, which income was liable to be included in his total income and taxable accordingly. Though the order of reference mentions section 64(1)(iv) of the Income-tax Act, 1961, the correct provision has been referred to by the Income-tax Officer in his assessment order and is section 64(1)(v) of the Act. Though the Assessing Officer held that it was not essential that the assessee should have other taxable income before the income deemed to have been derived by him from the investment made in the names of his minor children for the amounts gifted by him to those minor childre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tood at the relevant point of time is as follows : " 'assessee' means a person by whom any tax or any other sum of money is payable under this Act, and includes--- (a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person ; (b) every person who is deemed to be an assessee under any provision of this Act ; (c) every person who is deemed to be an assessee in default under any provision of this Act." The assessee is thus a person by whom tax or any other sum of money is payable under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc., in certain circumstances. Clause (v) of section 64(1) of the Act provides that subject to the provisions of clause (i) of section 27, in a case not falling under sub-clause (iii) of this sub-section, to a minor child (not being a married daughter) of such individual, from assets transferred directly or indirectly to the minor child by such individual otherwise than for adequate consideration. If the income of the spouse or minor is realised from the assets transferred otherwise than for adequate consideration by the other spouse or parent, it should be included in the income of the person, who transferred the asset. The income-tax return which the assessee is bound to file specifically requires the assessee to state the income aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to the minor for inadequate consideration by the donor or transferor. Instead of levying tax on the minor the Act treats that income as the income of the parent and the effect of treating the income in that manner is to render the income of the minor as the income of the father for the purposes of the Act. The Supreme Court in CIT v. Smt. P. K. Kochammi Amma, Peroke [1980] 125 ITR 624, while construing section 64(1)(i) and (iii) of the Act observed that the income of the spouse or minor from the profits of a firm in which the assessee is a partner, that income is liable to be included in computing the total income of the assessee and the assessee is duty bound to disclose in the return to be submitted by him all amounts representing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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