Taxation lawClubbingSupreme Court of India

CIT v Smt. P.K. Kochammu Amma

AIR 1980 Supreme Court 2124; (1981) 1 SCC 24119802 min read

The case in brief30-second read

Facts: The assessee was a partner in two firms, Malabar Tile Works and Malabar Plywood Works, in which her husband and minor daughter were also partners. In her return for assessment year 1964-65 she omitted their shares of the firms' profits. The Income Tax Officer added Rs 59,506 and a penalty of Rs 7,000 was imposed for concealment. The Tribunal set the penalty aside, the High Court affirmed, and the Revenue appealed.
Issue: Whether the omission of the spouse's and minor child's shares, includible under s.64(1), was concealment of income attracting penalty under s.271(1)(c).
Held: The shares of the spouse and minor child are includible in the assessee's total income under s.64(1), and "his income" in s.271(1)(c) means the income the assessee must disclose for assessment.
Principle: Income of a spouse or minor child includible under s.64(1) is part of the assessee's income to be returned under s.139; but omitting it was not concealment under s.271(1)(c) where the prescribed return form before 31 March 1972 had no column for it.

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Facts

The assessee was a partner in two firms, Malabar Tile Works and Malabar Plywood Works, in which her husband and minor daughter were also partners. In her return for assessment year 1964-65 she omitted their shares of the firms' profits. The Income Tax Officer added Rs 59,506 and a penalty of Rs 7,000 was imposed for concealment. The Tribunal set the penalty aside, the High Court affirmed, and the Revenue appealed.

Issue

Whether the omission of the spouse's and minor child's shares, includible under s.64(1), was concealment of income attracting penalty under s.271(1)(c).

Held

The shares of the spouse and minor child are includible in the assessee's total income under s.64(1), and "his income" in s.271(1)(c) means the income the assessee must disclose for assessment.
But the prescribed return form before 31 March 1972 had no column for income of a spouse or minor child. Following an earlier three-judge decision, the assessee could not be said to have concealed her income.
The penalty could not stand. The Revenue's appeal was dismissed.

Ratio decidendi

Clubbed income under s.64(1) is part of the assessee's income to be returned, but an omission is not concealment under s.271(1)(c) where the prescribed form gave no place to disclose it.

Exam use

How to use it in an answer

Authority on clubbing under s.64(1) and on what counts as concealment under s.271(1)(c).
Not an authority on income from house property or on maintenance of books under s.44AA.
Key line: "In CIT v P.K. Kochammu Amma (1980), the Supreme Court held that clubbed income must be returned, but omitting it was not concealment when the return form had no column for it."

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Citation

CIT v Smt. P.K. Kochammu Amma AIR 1980 Supreme Court 2124; (1981) 1 SCC 241

Reported: https://indiankanoon.org/doc/1160166/. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.