INCOME-TAX OFFICER Vs. SUKHAN LAL SINGH

JUDGEMENT

(1.) The only contention in this appeal is that the AAC has erred in deleting the addition of Rs. 15,369 from the total income of the assessee.

(2.) The assessee gifted certain sum to his grandson Ashok Kumar. Ashok Kumar invested the amount in the firm of Banilal Sukhanlal in which he was also admitted to the benefits of partnership. He received a sum of Rs. 15,369 as his share of profit from the above firm. The ITO included it in the assessment of the assessee acting under the relevant provision of section 64 of the Income-tax Act, 1961 (the Act).

(3.) The assessee appealed to the AAC. It was submitted before him that it was clause (iii) of section 64(1) which was applicable to the case. According to this clause, in computing the total income of an individual all such income as arose directly or indirectly to a minor child of such income as arose directly or directly to a minor child of such individual from the admission of the minor to the benefits of partnership in a firm was to be included. It was, therefore, submitted before the AAC that the income of the minor was to be included only in the income of his father and not in the income of the assessee who was his grandfather. On the basis, the AAC deleted the addition.