1988 (2) TMI 428

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..... nterest of Rs. 9,435 debited to the capital account of the minor and paid to the firm in which she was a partner is deductible from the share income arising to her from the partnership firm, especially when the interest is paid to the firm itself and not to any outsider ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in holding that the interest of Rs. 8,839 debited to the capital account of the minor and paid to the firm in which she was a partner is deductible from the share income arising to her from the partnership firm, especially when the interest is paid to the firm itself and not to any outsider ? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribu .....

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..... minor daughter was liable to be included in the total income of the assessee under section 64(1)(iii) of the Act. Consequently, in the regular assessments for the years 1979-80 and 1980-81, the share income arising to the minor daughter was so included. In connection with these two assessments, the assessee claimed that interest on monies borrowed and invested in the partnership firm on behalf of the minor for the purpose of construction of dall mill should be deducted from the share income and only the resultant income included in his total income under section 64(1)(iii) of the Act. It was claimed that interest of Rs. 8,839 and Rs. 8,533 were paid on the monies borrowed by the minor daughter and deduction of these two sums from the share .....

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..... ce to this court of the three questions already mentioned above. The contention of standing counsel for the Revenue is that when section 64(1)(iii) authorised the inclusion of the share income arising to minor child, it is the gross income that is referable and not the net income. According to learned standing counsel, the share income of the minor daughter liable to be included in the total income of the assessee must be ascertained without giving any deductions to which the minor daughter may be entitled if she had been directly assessed. In that view of the matter, learned standing counsel submitted that the Tribunal was in error in directing that the interest paid for the three years should be deducted. We find no authority for th .....

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