Minor’s Loss Rightly Clubbed in Mother’s Income | HC

Case Details: Sulochana V Gupta vs. Income-tax Officer - [2025] 174 taxmann.com 1201 (Gujarat)

Judiciary and Counsel Details

• • Bhargav D. Karia & D.N. Ray, JJ.
  • Mrs Swati Soparkar, Adv. for the Appellant.
  • Varun K. Patel, Adv. for the Respondent.

Facts of the Case

Assessee, an individual, was the mother of a minor son. The assessee claimed a set-off of the loss incurred by the minor son from her income. The Assessing Officer (AO) disallowed the loss claimed as set-off by the assessee from her income.

The case was referred to the CIT(A), who allowed the appeal filed by the assessee and deleted the disallowance of the loss claimed by the assessee. The matter then reached the Tribunal. The Tribunal held that the loss could only be clubbed in the father’s income, as in the very first assessment year 1995-96, the income of the minor son had been clubbed in the hands of the father.

Aggrieved by the order, the assessee filed an appeal to the Gujarat High Court.

High Court Held

The High Court held that the Tribunal was not justified in invoking the provision of section 64(1A). While allowing the appeal of the revenue, the Tribunal concluded that the CIT(A) was not correct in allowing the loss incurred by the minor son against the income of the assessee mother, which ought to have been clubbed in the income of the father.

However, the Tribunal had lost sight of the glaring fact that for the relevant assessment year, the income of the minor son was clubbed in the hands of the assessee-mother. Therefore, the reasoning given by the Tribunal that the same ought to have been clubbed in the hands of the father of the minor was not true and correct. Accordingly, the Tribunal was not justified in invoking the same, particularly when the said issue of clubbing was never considered at the assessment stage by the AO in view of the clubbing of the income of the minor son for the assessment year 1996-1997 in the hands of the assessee-mother.

Therefore, strictly interpreting the provision of section 64(1A), the income of the minor was rightly considered as loss in the hands of the assessee.

List of Cases Reviewed

• Order of ITAT, Ahmedabad in IT Appeal no. 2179 (Ahd) of 2000, dated 29-3-2007 (para 16) set aside.