COMMISSIONER OF INCOME TAX Vs. AYODHYAKUMARI MRS

JUDGEMENT

(1.) THIS is a reference under s. 256(1) of the IT Act, 1961 (No. XLIII of 1961) (for short "the Act" herein), by the Tribunal, Delhi Bench "A", which for the sake of brevity hereinafter will be referred to as the "the Tribunal". The Tribunal has referred the following questions of law for decision of this Court :

(2.) THE assessee, Mrs. Ayodhya Kumari, transferred her house property on March 31, 1956. She transferred a fixed deposit of Rs. 5,000 with the National Motors on December 29, 1956. She also transferred ten shares of City Light THEatres (P) Ltd., on August 24, 1960, to her minor son, Sunil Kumar. One the same day, i.e., August 24, 1960, she transferred seventeen shares of City Light THEatres (P) Ltd. to her minor son, Akhil Kumar. THE incomes of these minor sons were not included in the total income of the assessee in her original assessments as according to the interpretation put by the Supreme Court on s. 16(3) of the Indian IT Act, 1922 (No. XI of 1922) (for short "the old Act"), that " an individual" occurring in s. 16 of the old Act would only include male species and not female species. According to the ITO (ITO), there were changes in the provisions of s. 64 of the Act and according to s. 64(iv) of the Act, income of the minor sons was to be included in the assessee's assessment. THE ITO started proceedings against the assessee under s. 147(a) of the Act in respect of the asst. yrs. 1962-63, 1963-64 and 1964- 65, and he included the income of the minor sons in the total income of the assessee. He also included the income of the minor sons from the assets transferred by her to them in the assessment of the assessee for the asst. yrs. 1965-66 and 1966-67. THE assessee preferred appeals. THE AAC held that, on the facts of the case, he can substitute application of the provisions of s. 147(b) for s. 147(a) of the Act. He further held that though the assets had been transferred by the assessee prior to the commencement of the Act, still the provisions of s. 64 of the Act were applicable to the case, for, the Act is not concerned with the date of transfer but with the income arising out of transfer and chargeable to income-tax and that s. 64(iv) of the Act is wide enough to include income derived by transfer before the passing of the Act. THE assessee filed second appeals before the Tribunal. THE five appeals were disposed of by a common order dated June 25, 1979. THE appeals related to the asst. yrs. 1962- 63, 1963-64, 1964-65, 1965-66 and 1966-67. THE three appeals relating to 1962- 63, 1963-64 and 1964-65 arose out of the initiation of proceedings under s. 147(a) of the Act as the ITO included the income of the minor sons in the total income of the assessee. THE remaining two appeals were in respect of the asst. yrs. 1965-66 and 1966-67, in which the income of the minor sons from the assets transferred by the assessee to them were included. THE Tribunal has summarised its conclusions as follows :

(3.) LEARNED counsel for the Revenue as well as of the assessee have referred to various decisions mentioned hereinbelow in support of their respective submissions. While considering s. 34(1) of the old Act, it was observed in Mukherjee vs. CIT (1956) 30 ITR 535 (Cal) as follows :