SAYANI J K Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred for the determination of this court is: "Whether the facts and in the circumstances of the case, the inclusion of a sum of Rs. 16835 which constituted the share income of the minor son of the petitioner in the assessable income of the petitioner assessee by applying the provisions of S. 16(3)(a)(iv) of the Income-tax Act was proper and valid?"

(2.) ANOTHER deed dated 23-12-1954 came into existence and under this document a new firm was constituted with the same name with Champaklal and two others as partners. To the benefits of this firm, the minor son of the assessee, Ramniklal, and another son of a deceased partner of erstwhile firm, were admitted. The assessee's son, Ramniklal, was entitled to a share, of 3 annas in the profits of the firm. The amount transferred to the credit of Ramniklal was treated as the sum standing to his credit and not as part of the capital contributed by that minor to the firm.

(3.) ON the facts which we have set out and which are not disputed, we are unable to accept the contention advanced on behalf of the assessee that the share interest in that firm was not an asset which was transferred by the father to the minor son. As we have pointed out, that was clearly intention of the parties, though it was sought to be achieved by indirect means. The section has to our mind been broadly framed in order to catch within its net of operation transactions this kind.