| Case ID |
09bfae54-620d-4e26-b1c8-ebc35859a1a7 |
| Body |
View case body. Login to View |
| Case Number |
TAX CASE No. 83 OF 1969 (REFERENCE No. 4 OF 1969) |
| Decision Date |
Nov 20, 1974 |
| Hearing Date |
|
| Decision |
The court held that the transfer of shares was not for adequate consideration, thus including dividend income in the hands of the assessee. The tribunal's conclusion that the transactions were cross-gifts was upheld, and it was clarified that only the part of the income that was found to be without adequate consideration was assessable under section 64(iv). This decision aims to prevent tax avoidance through asset transfers to minor children. |
| Summary |
In this case, the Madras High Court addressed the applicability of Section 64 of the Income Tax Act, 1961 concerning asset transfers for the benefit of minor children. The case involved Smt. V. Amirtham Ammal, who transferred shares to her minor son, which were deemed to be cross-transfers with inadequate consideration. The Income Tax Officer included the entire dividend income as income derived by the minor from the shares transferred indirectly. The tribunal confirmed this assessment, highlighting that the transfers were indeed cross-gifts and not for adequate consideration. The court emphasized that the object of Section 64(iv) is to prevent individuals from circumventing tax liabilities through such transfers. The judgment clarifies that only the portion of income related to inadequate consideration is taxable, establishing a precedent for similar cases. This case is significant in the realm of income tax law, particularly concerning asset transfers and tax implications for minors. |
| Court |
Madras High Court
|
| Entities Involved |
Not available
|
| Judges |
V. Ramaswami,
V. Sethuraman
|
| Lawyers |
K. Ramagopal for the Applicant,
V. Balasubrahmanyan for the Respondent,
J. Jayaraman for the Respondent
|
| Petitioners |
Smt. V. Amirtham Ammal
|
| Respondents |
Commissioner of INCOME TAX
|
| Citations |
1976 SLD 150 = (1976) 102 ITR 350
|
| Other Citations |
L.G. Balakrishnan v. CIT [1963] 49 ITR 102 (Mad.),
CIT v. Manilal Dhanji [1962] 44 ITR 876 (SC),
Hrishikesh Ganguil v. CIT [1971] 82 ITR 160 (SC),
H.N. Patwardhan v. CIT [1970] 76 ITR 279 (Bom.),
Tulsidas Kilachand v. CIT [1961] 42 ITR 1 (SC)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
64
|