Report No. 265

9. Arguments for seeking the exemption

The arguments which such an assessee could advance would be that the amount had been put in fIxed deposit by the other spouse on the direction of the court. Thus, the said spouse had acted under legal compulsion and not under free will. The assessee had not made any transfer or deposit in favour of such minor, rather he or she is bound by the order of the court. Being the guardian, the assesse cannot use or derive any benefit from the income or part thereof for the reason that such deposit had been made for the welfare of the child as per the direction of the Court.

It requires to be treated like the self-earned income of the minor, which is not to be clubbed with the income of either of the parents at par with the provisos(a) and (b) to section 64(1A) of the Act, 1961. The addition of any income arising out of maintenance money provided for the minor in such cases would adversely affect the parenti guardian. If the income of the minor is dubbed with the income of parenti guardian then, the tax liability will stand enhanced. Therefore, minor's income from the maintenance amount should not be clubbed with the income of the parenti guardian.