9911796707
TMI Blog1990 (11) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Income-tax Act, 1961. 2. Because the authorities below have failed to appreciate that the amount in question could not be said to be the income resulting to the spouse of the appellant on account of her partnership interest in the said firm. 3. Because the amount in question had been earned on a loan account which she had voluntarily advanced to the firm purely with intention to earn interest thereon and the same should not have been clubbed in the hands of the appellant by invoking the provisions of section 54(1)(i) of the Income-tax Act, 1961. 4. Because on a true interpretation of the provisions of section 64(1)(i), the interest earned on the deposits were outside the purview of that section and the clubbing of the same in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the husband under section 64(1)(i) of the Act. He has pointed out that the facts of this case were little different and distinguishable from these two decisions. He has pointed out that in this case the amount of Rs. 3,00,000 had been transferred to a loan account of Smt. Sudama Devi, wife of the assessee. In this way, the interest earned by Smt. Sudama Devi was by way of interest on loan and not by way of her being a partner in the firm or by way of her husband being a partner in the firm. He has thus pointed out that whatever income is earned directly or indirectly by the wife from a firm of which the husband is a partner can be clubbed only when it arises from the membership of the firm. Here he has stressed that the income of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Hon'ble Court has mentioned at page 276 as under : " ........It appears to us that these accumulated profits remaining in the hands of the firm cannot, on any principle, be equated with deposits made or loans advanced. The profits accumulated to the credit of the wife and the minor sons, because they did not draw their share of profits when distribution of profits took place, and allowed those profits to remain with the firm ; but there is no suggestion at all that, at that stage, either the wife or the minor sons, or any one on their behalf, purported to enter into an arrangement with the firm to keep these accumulated profits as deposited ....... When the decision was taken to give interest, the nature of the funds did not ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 5 to 12 had held that any interest paid on such deposits will not fall within the scope of section 64(1) of the Act. We have perused the said order and find that in similar circumstances the deposits by minors were treated to be loan deposited and interest paid on them was not allowed to be clubbed with the income of the father of the minor under section 64(1)(i) on the basis of the same principles as discussed by us above. Hence, taking all these facts and circumstances of the case and the decisions of the Hon'ble Supreme Court and the Bombay High Court and that of Allahabad Tribunal, we are of the opinion that in the present case the order of the learned CIT(Appeals) confirming the order of the ITO clubbing the amount of Rs. 29,250 rece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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