COMMISSIONER OF INCOME TAX Vs. BANSILAL BHAIYA

JUDGEMENT

(1.) THE question referred to us at the instance of the Revenue in respect of the assessee's assessment for the assessment year 1976-77 is :

(2.) THE statement of the case shows that the monies had in fact been contributed by the minor towards the capital of the firm and the interest received by the minor was on the capital standing to the credit of the minor. THE minor had been admitted to the benefits of the partnership which was reconstituted under a deed dated April 16, 1975, and the preamble to which deed contained a statement that the minor was being admitted in consideration of capital being forthcoming. THE partnership deed also provided that the capital standing to the credit of the partners shall carry interest at the rate of 12 per cent, per annum. Prior to April 16, 1975, there was another deed of partnership dated June 30, 1974, which did not require the minor to bring any capital, though the minor had been admitted to the benefits of that partnership. That, however, is not of any relevance for the present purposes. THE interest income on which the assessment has been made is the interest received on the capital standing to the credit of the minor, which capital was required to be contributed by the minor in consideration of the minor being admitted to the benefits of the partnership constituted under the deed dated April 16, 1975.

(3.) SO long as'the benefit received is the result of the admission of the minor to the benefits of the partnership, such benefit has necessarily to be included in the total income of the individual whose minor child has been admitted to the benefits of the partnership.