9911796707
TMI Blog1971 (11) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... he account of the wife of Sri Phool Chand, a partner in the assessee-firm, was rightly includible in the income of the assessee under section 40(b) of the Income-tax Act, 1961 - - - - - Dated:- 6-11-1971 - Judge(s) : HARI SWARUP., R. S. PATHAK. JUDGMENT The judgment of the court was delivered by PATHAK J.- The Income-tax Appellate Tribunal has referred the following two questions for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Phool Chand as interest for these two years. The assessee explained that the interest was paid to the lady because Phool Chand had transferred a sum of Rs. 1,00,000 to her account on April 23, 1959, by way of gift by instructing the assessee to debit his account and credit his wife's account correspondingly. The Income-tax Officer held that the gift was invalid. Treating the interest in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by this court in Bhau Ram Jawaharmal v. Commissioner of Income-tax (I.T.R. No. 191 of 1961, decided by Hon. Pathak and Hon. H.N. Seth JJ.). and it was held that it was not necessary that a partnership firm should carry on a banking business in order that such a gift be valid. That was also a case where the donor had an account in the books of the partnership firm and by instructions issued to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that case, the assessee was an individual. She purported to make a gift of Rs. 1,00,000 in favour of one Om Nath. The transaction was sought to be made by entries made in her own account books. The court pointed out that by making these entries, the possession, dominion and control over the amount in question had not passed from the donor to the donee and that it was always within her power to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon which the court held the gift to be invalid had already been set out earlier and it was only when discussing the case law on the subject that the observations were made. Since then, the matter has been considered in a number of cases by this court and it has been clearly laid down that whether the partnership firm does or does not carry on banking business does not affect the validity of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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