Krishan Swarup, Accountant Member - (1.) THE grounds taken by the Department in this appeal against the order of the Commissioner (Appeals)-XXIV, New Delhi dated 19-10-1994, for the assessment year 1993-94, read as under :- On the facts and in the circumstances of the case : (1) THE Ld. Commissioner (Appeals) erred in holding that deduction under Section 80L is to be allowed in respect of income of each minor included in the total income of the assessee, over and above deduction under Section 80L to be allowed in the case of the assessee. (2) THE Ld. Commissioner (Appeals) failed to appreciate that Section 64(1 A) clearly states that all income arising or accruing to the minor child is to be included in the total income of the assessee; and Section 80B states that gross total income means total income, computed in accordance with the provisions of the Act, without making any deduction under chapter VIA of the Income-tax Act.
(2.) Facts of the case, to be stated succinctly, are thus. The assessee, an individual, derived income from salary, house property and other sources. He had three minor children, all of whom had income from interest and dividends. In view of provisions of Section 64(1 A) of the Income-tax Act, 1961, the income arising or accruing to the minor children was includible in computing total income of the assessee. In the return filed by him, the assessee had included minors' income after deducting therefrom an amount of Rs. 7,000 in each case in terms of provisions of Section 80L of the Act. This claim of the assessee was negated by the Assessing Officer, of course deduction under Section 80L was allowed from assessee's own income from interest etc. as was claimed by him. In first appeal, the plea of the assessee, as recorded by the ld. Commissioner (Appeals), was that deduction under Section 80L is to be allowed in computing the net income to be clubbed in his hand. It was submitted that what was to be clubbed in his total income, in terms of Section 64 of the Act, was the income of the minor child and not "gross total income''. The provisions of Section 80A were referred to contend that the deductions specified in Sections 80C to 80U are to be allowed from the assessee's gross total income, in computing his total income. The ld. Commissioner (Appeals) directed to allow the deduction admissible under Section 80L separately in the case of each minor whose income is clubbed in the hands of the assessee. The Department is aggrieved.
(3.) THE submission of the ld. DR was that the income to be clubbed under Section 64(1 A) is the gross total income which is defined in Section 80B(5) as the total income computed in accordance with the provisions of the Act, before making any deduction under Chapter VIA of the Act, which includes, inter alia, section SOL. It was contended that deduction under Section 80L is to be allowed only once in the case of assessee himself and not in respect of income of each minor included in assessee's total income.;