The total income of an owner under the proviso to section 23(2) of the Income Tax Act, 1961, includes income of his minor child assessable in his hands under section 64 of the Act.

1. The assessee is an individual. He is a partner of the firm M/s M. A. Ramzana in which his son, Javeed Ahmad, has been admitted to the benefits of the partnership. The assessee owns house property which is self occupied for his residence. For the assessment year 1974-75, the assessee filed his return of income and determined the annual letting value of the said property at Rs. 4,420/- but limited the assessable amount of Rs. 2,688/- only. His contention was that 10% limit, as contemplated by section 23(2) of the Income Tax Act, 1961 (shortly the Act), was relateable to the total income of the assessee without including therein the minors income assessable in his hands under section 64 of the Act. The I. T. O. repelled the contention, On appeal, the Appellate Assistant Commissioner disagreed with the I. T. O. and upheld the contention. Feeling aggrieved the Department preferred an appeal before the Tribunal. The Tribunal preferred the view taken by the I.T.O. and reserved the order passed by the Appellate Assistant Commissioner observing :

"Section 2(45) defines "total income as to mean the total amount of income referred to in section 5 computed in the manner laid down in the Act. Section 5 on its part brings within the ambit of total income of a person, all income from whatever sources derived which has been received or accrued or deemed to be received or accrued in India by or on behalf of such person. This section is qualified by the words "subject to the provisions of this act". In other words, the scope of "total income" under section 5 is not exhaustive, and in case there are other provisions in the Act enlarging the scope of total income, they have as well to be kept in view. Section 64 next postulates that in computing the total income of any individual, there shall be included such income as arises directly or indirectly to the spouse or a minor child of such individual from membership in a firm in which he is also a partner or from assets transferred directly or indirectly to them otherwise than for adequate consideration. This section thus leaves without any pale of doubt that "the total income" of any individual has to include the income which is clubbed in his hands under its provisions.

These provisions thus, have broadened the scope of "total income" considerably and incomes deemed to be received by or on behalf of an assessee are includible in his hands. So also the income under section 64. The latter income is deemed to be the total income of the assessee by operation of law."

and again as under : -

"Moreover the only exceptions which the proviso to Section 23 (2) envisages are that the income of the property is not to be included and further that the deductions under Chapter VI. A are to be excluded. There is no other exclusion envisaged. It would, therefore, not be correct to exclude the income enjoyed under section 64. In this respect, we may as well refer to section 80-B (5) of the Act which defines gross total income. There a specific exclusion of the income under section 64 has been provided for. Had the Legislature so envisaged for Section 23 (2) as well, it would have naturally enacted so in its Proviso."

At the instance of the Assessee, the Tribunal has referred the following questions of law for our opinion:

"1. Whether on the facts and circumstances of the case, the Appellate Tribunal was right in holding that the term total income of the owner under the proviso to section 23 (2) includes income under section 64 ?

2. Whether on the facts and circumstances of the case, the Tribunal was right holding that Total Income as laid down in Section 5 basis of charge of Income-tax tan-tamounts to gross total income as defined in Section 80 b (5) of the Act ?"

Section 23 (2) reads :

"Where the property consists of

(i) a house in the occupation of the owner for the purposes of his own residence, the annual value of such house shall first be determined in the same manner as if the property had been let and f