Clubbing of Income

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Gourav Mehta (Querist)
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02 April 2009 Hi! Freinds
Please resolve,
If MR. A has gifetd Rs. 5lacs to his wife Mrs. A and if she has invested the amount in a partner ship firm for a year and earn Rs. 75000/- as a share of profit and after that she withdrew the amount of Rs. 500000 and gifted to her daughter in law. Her daughter in law invested the same in a bank FD and earn interest of Rs. 50000. Now, in whose hands this interest income isi to be clubbed whether in the hands of Mr. A(Gift originates from him) or Mrs. B(Transferor to daughter in law).
Reference books are showing different views on this matter.

Thanks and Regards
Gourav Mehta

CA LOKESH KASAT, FCA, M.Com

CA LOKESH KASAT, FCA, M.Com (Expert)
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02 April 2009 It will be clubbed in Hands of Mr.A only. Any refrence book showing Mrs.A as transferor, will considered to be wrong.

Here for tax planning purpose, you can use the 75000 earned by Mrs.A from partnership firm, to be included in amount withdrawn.

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