COMMISSIONER OF INCOME TAX Vs. CHANDAPPA IYER S

JUDGEMENT

(1.) THE Appellate Tribunal has referred the following question for decision :

(2.) THE assessee transferred a sum of Rs. 60,000 to his wife by name Tulasi Ammal on 7th January, 1958. She entered into a partnership with her son, Hunumantha Rao, under a deed dated 6th July, 1958. THE firm was known as Indian Sandal Oil Industries. This firm was granted registration under the Income-tax Act. We are concerned in the present reference with the assessment year 1962-63. For the earlier year, namely, 1961-62, she had earned a sum of Rs. 2,385 as her share of profits and this sum was sought to be included in the assessment of the assessee. THE assessment so made was disputed in appeal. For the assessment year 1962-63, she earned a sum of Rs. 4,189 as interest on the said sum of Rs. 60,000 transferred by her husband. THE share of profit exclusive of the said interest allocated to her came to Rs. 49,122. THEse two amounts totalling to Rs. 53,311 came to be included in the assessee's hands under the provisions of Section 64(iii) of the Income-tax Act, 1961.