1978 (6) TMI 95

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....e rate of 12 per cent per annum on the amounts contributed obey and above the capital. It was pointed out that the current account of the minor in the above two firms represented funds advanced by the minor to the firms and the said advances were distinguishable from the capital contributed. It was therefore urged that the interest charged on the balance in the current accounts could not come within the purview of s. 64(1)(Ii) of the IT Act, 1961. It was also submitted that the assessee's minor son carried on money-lending business, that the balance in the current account represented a money-lending advance given in the course of the money-lending business and that the minor was in fact assessed on the interest received from the firm in thi....

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....he Supreme Court in the case of S. Srinivasan vs. CIT Madras (4) would apply to this case. 3. We have considered the rival submissions. The Supreme Court in the case of S. Srinivasan vs. CIT Madras (4), at page 278 observed that the cases when interest was earned on a deposit or a loan differ from a case of the type where interest was earned on amounts of which the minors permitted the use by the firm because they were their accumulated profits arising from the firm itself and because of their interest in the firm as persons admitted to the benefits of the partnership. In the case before us the assessee has pleaded that the amounts advanced by the minor to the firm came out of the current account in which both the accumulation of profits....