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TMI Blog1967 (3) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... m and Nagaland, under section 66(2) of the Indian Income-tax Act, 1922, by the Income-tax Appellate Tribunal, Calcutta Bench " A " : " (1) Whether under the facts and circumstances of the case, the share income of the minor son from the three firms is liable to be included in the assessment of the father under section 16(3)(a)(iv) ? (2) Whether in view of the fact that there was no contribution of any sum in the Galla and Calcutta firms by the minor son out of the gift money from the father, the share income from those two firms was liable to be included in the assessment of the father under section 16(3)(a)(iv) ? " These questions arose out of the following facts : The respondent, Jwalaprasad Agarwala, hereinafter referred to as " th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e firms should have been included in the appellant's assessment under section 16(3)(a)(iv) ; and (2) that, in any event, the amount of Rs. 22,476 should have been treated as earned income on which special surcharge could not be levied. The Appellate Assistant Commissioner rejected the first contention on the ground that since the accumulation of share of profits and interest accrued to the appellant's son in view of his invesment of capital received as gifts from the appellant, I think it will be reasonable to hold it as an asset transferred by the appellant to the son " indirectly ". He accepted the second contention but we are not concerned with this point. The assessee appealed to the Income-tax Appellate Tribunal. The Appellate Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Calcutta firm. Thus, in spite of the fact that each of these firms are paying interest to the minor, we are obliged to hold that the share incomes which the minor had been deriving from each of these firms is directly attributable to the introduction of the original capital of Rs. 74,721 out of the gift which the appellant had given to his minor son. In view of this, the provisions of section 16(3)(a)(iv) are clearly applicable both in respect of the interest on the original capital sum of Rs. 74,721 and the share incomes of the minor as derived from the above-mentioned three firms." The Tribunal, however, excluded the interest on the other accretions to the capital account of the minor as appearing in the three firms' accounts from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts of the Dhubri firm to the Calcutta firm must be presumed to have been contributed by the minor out of the assets transferred to him and invested in the Dhubri firm. The High Court rightly held that there was no finding of the Tribunal that this sum of Rs. 11,000 was part of the original capital of Rs. 74,721 transferred to the minor by the father. Coming to the Dhubri firm, the High Court held that the Tribunal had relied on two circumstances in support of its finding that the share of the minor in the Dhubri firm was his income arising out of the transfer of assets of the father, the assessee. The first circumstance taken by the Tribunal was that the past record of the assessee showed that this objection had never been raised before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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