On appeal the  High Court held that the Tribunal was not justified in invoking S. 64(1A) to hold that the income (or loss) of a minor child can only be clubbed in the hands of the father and not in the hands of the mother. The Court noted that in the immediately preceding assessment year, the minor son’s income had in fact been clubbed in the hands of the assessee mother and such treatment was never disturbed by the authorities. Further, the issue of clubbing was not even considered by the Assessing Officer at the assessment stage for the year under consideration. In these circumstances, a strict interpretation of s. 64(1A) would require that the minor’s income/loss be clubbed in the hands of the parent in whose income it was included earlier, and the Tribunal erred in law in directing that it must necessarily be clubbed only in the father’s hands. Accordingly, the Tribunal’s order was set aside. (AY.1997-98)