1976 (1) TMI 34

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.... the assessment of the assessment year 1962-63 ? " The assessee transferred a sum of Rs. 60,000 to his wife by name Tulasi Ammal on 7th January, 1958. She entered into a partnership with her son, Hunumantha Rao, under a deed dated 6th July, 1958. The firm was known as Indian Sandal Oil Industries. This firm was granted registration under the Income-tax Act. We are concerned in the present reference with the assessment year 1962-63. For the earlier year, namely, 1961-62, she had earned a sum of Rs. 2,385 as her share of profits and this sum was sought to be included in the assessment of the assessee. The assessment so made was disputed in appeal. For the assessment year 1962-63, she earned a sum of Rs. 4,189 as interest on the said sum of....

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....his court. This question has to be considered in the light of the decision of the Supreme Court rendered under section 16(3) of the Indian Income-tax Act, 1922, in Commissioner of Income-tax v. Prem Bhai Parekh. In that case the assessee was a partner in a firm having 7 annas share therein. He retired from the firm on the 1st of July, 1954. He gifted Rs. 75,000 to each of his four sons, three of whom were minors. There was a reconstitution of the firm with effect from 2nd July, 1954, whereby the major son became a partner and the minor sons were admitted to the benefits of the partnership. The question was whether the income arising to the minors by virtue of their admission to the benefits of the partnership in the firm could be include....