1970 (9) TMI 20

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the assessee's minor son, Prem Prakash, who had been admitted to the benefits of partnership of a firm. The Appellate Assistant Commissioner, therefore, issued a notice of enhancement proposing the inclusion of the share of the minor in the assessment of Smt. Triveni Devi. The assessee protested, and further submitted that in any case interest amounting to Rs. 5,561 received by the minor from the firm was not includible under section 64(i) of the Act in the assessee's income. This last submission was accepted by the Appellate Assistant Commissioner. The sum of Rs. 5,561 received by the minor son as interest was not included in the assessee's income. The Income-tax Officer, Kanpur, appealed against the appellate decision of the Appellate As....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pon minors to maintain any deposits in the firm. The question arose whether interest which minor partners had received on deposits standing to their credit in the firm could be included in the total income of the assessee under section 16(3)(a)(ii) of the Indian Income-tax Act, 1922. It was held by the Bombay High Court that the interest earned by the minors could not be included in the income of the assessee. In Chauthmal Kejriwal v. Commissioner of Income-tax, it was held by the Assam High Court that where a minor has been admitted to the benefits of partnership in a firm in which his father is a partner, and the minor has supplied capital, any income accruing to the minor as interest on the capital is an indirect result of his being a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....dmitted to the benefits of the partnership may not, be a deposit or advance and may not be a capital contribution but still if there is a causal connection between the amount standing to the credit of the minor and his admission to the benefits of the partnership, such connection being either direct or indirect, then the interest accruing on that account to the minor will be includible in the assessee's total income. " Annexure " C " to the statement of the case is a copy of the Tribunal's judgment dated December 19, 1963, dismissing the appeal by the Income- tax Officer, Kanpur. In paragraph 2 of its judgment the Tribunal observed: " We are, however, unable to accept this submission of the departmental representative because it is no....