TMI Blog2004 (5) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of the assessee (parent) for the rate purposes. 2. That the Ld. Assessing Officer has erred in clubbing the agricultural income of the minors in the hands of the appellant under section 64 at Rs. 36,000 ignoring the provisions of section 10(1) read together with section, 2(24) and section 64 of the Income-tax Act, 1961 and the provisions of the Finance Act, 1997 which do not provide for clubbing of agricultural income of minor sons in the hands of their parents, being the agricultural income of minors is not the income which is the subject-matter of section 64, the clubbing provisions. The Ld. CIT(A) has also erred in upholding the finding given by the lower Authority and case law relied by his is unapplicable to the facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the manner laid down in this Act and, therefore, in view of the provisions of section 10(7), agricultural income cannot be included in total income and, therefore, it cannot be clubbed under section 64(1A). It was also contended that judgment of Hon'ble Jurisdictional High Court rendered in the case of CIT v. Abhay L. Khatau [1986] 162 ITR 648 (Bom.) and followed by the Ld. CIT(A) is not applicable in this case because the facts are different. In this judgment, dividend income accrued on shares transferred by the assessee to his wife whereas in the present case, there is no transfer of asset by the assessee to his minor children. 5. As against this, it was contended by the Ld. DR of the revenue that no finding is given either by Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was forming part of total income in the relevant assessment year being assessment year 1966-67. 7. Now, we examine the provisions of section 64(1A) and for the purpose relevant portion of the same is reproduced below: "1(A) In computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child [,not being a minor child suffering from any disability of the nature specified in section 80U]." From the above, we find that in computing total income of an assessee, all such income as arises or accrues to his minor child is to be clubbed. The words "all such income" in this section refer to total income and we are of the considered opinion that for giving effect to this section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmined in respect of the aggregate income at the rates specified in the said Paragraph A, as if such aggregate income were the total income; (ii) the net agricultural income shall be increased by a sum of forty thousand rupees, and the amount of income-tax shall be determined in respect of the net agricultural income as so increased at the rates specified in the said Paragraph A, as if the net agricultural income as so increased were the total income; (iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax in respect of the total income." 9. From the above, it can be seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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