9911796707
TMI Blog2001 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in the circumstances of the case, the Tribunal was legally correct in holding that section 64(1)(iii) of the Income tax Act, 196 1, as substituted by the Taxation Laws (Amendment) Act, 19 75, with effect from April 1, 1976, was applicable to the case of the assessee? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the income arising to Shri Deepak Aggarwal in the firm of Rakesh Deep was otherwise includible to the total income of the assessee? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the interest on the accumulated profits which remained with the firm and which belonged to Shri Deepak Aggarwal, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C" in short). It was stated that neither the capital was advanced by the assessee nor was the assessee himself a partner in the firm in which the minor had been admitted to the benefits of partnership and, therefore, section 64(1)(iii) did not have any application. The Appellate Assistant Commissioner did not accept the plea. The matter was carried in further appeal before the Tribunal. The stand taken by the assessee before the Assessing Officer and the Appellate Assistant Commissioner was reiterated. Additionally, it was pointed out that the amended provision brought in by the Taxation Laws (Amendment) Act, 1975, could not have any application because the previous year of the firm ended before April 1, 1976. In any case, interest on the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the clear language of section 64(1)(iii) there is no scope for entertaining a doubt about the correctness of the view expressed by the Tribunal so far as the first two questions are concerned. So far as the third question is concerned reliance is placed on a decision of this court in CIT v. Ghewar Chand Kanuga [1997] 228 ITR 460. In order to appreciate the stand taken by the Revenue it would be appropriate to quote section 64(1)(iii) as it stood at the relevant point of time: "64. (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." It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any income arises to the minor as a result of or in consequence of the partnership deed, whether it be in the form of share of profit, commission, fee or even interest, it would be assessable in the hands of the parent. But if there is an independent contract, de hors the partnership agreement whereby loan is advanced by the minor to the firm in which he has been admitted to the benefits of partnership, then the interest may not become liable to tax in the hands of the parent. The situation is entirely different here so far as the factual aspects are concerned. In our view the decision of this court referred to above And that of the Supreme Court in S. Srinivasan's case [1967] 63 ITR 273, apply to the facts of the present case. The inevitab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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