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TMI Blog2004 (8) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... pital account but were mere deposits? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law, in holding that the interest derived by the minors, Ajit Kumar and Jahanganj Cold Storage was not as a result of their admission to the benefits of partnership and that it could not be included in the assessee's income under section 64(1)(iii) of the Income-tax Act, 1961? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in not upholding that the income derived from admission of the minors, Ajit Kumar and Sujit Kumar to the benefits of the partnership in the firm, M/s. Jahanganj Cold Storage, included the share in the profits of the said f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing "nil" income. A note was given in the return to the effect that the assessee's minor sons were admitted to the benefits of partnership in two firms, which had been shown in the statement accompanying the return, which should be considered in case section 64 was held to be applicable. The Income-tax Officer completed the assessment for both the years by including the profits and interest paid to the minors. Thereupon the assessee came up in appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner held that the interest received by the minors, attributable to the initial investment made in the firm, was not includible in the assessee's total income under section 64(1)(iii) of the Act. Thereupon the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be included. Having heard Sri Mahajan, we are of the considered opinion that under section 64(1)(iii) any such income which arises directly or indirectly to a minor child from the admission to the benefits in a partnership firm is liable to be included in the individual. Section 64(1)(iii) of the Act is reproduced below: "64. Income of individual to include income of spouse, minor child, etc.-(1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly - . . . (iii) to a minor child of such individual from the admission of the minor to the benefits of partnership in a firm;" The income earned on the deposits made by a minor in the firm would 9 also be covered under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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