COMMISSIONER OF INCOME TAX Vs. ANAND SWARUP AGGARWAL

JUDGEMENT

(1.) The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under section 256(2) of the Incometax Act, 1961, hereinafter referred to as "the Act", for the opinion of this court :

(2.) Briefly, stated the facts giving rise to the present reference are as follows:

(3.) The present reference relates to the assessment year 1978-79. The res- pondent is an individual. His minor son, Master Vishal Swarup, was admitted to the benefits of partnership in the firm, M/s. Vishal Financiers, from which he enjoyed Rs. 1,843 as his share income and Rs. 5,529 as interest. The Income-tax Officer added the aforesaid two amounts under section 64(1)(iii) of the Act in the assessable income of the respondent which action has been confirmed by the Appellate Assistant Commissioner in the appeal filed by the respondent. In further appeal the Tribunal deleted the addition of Rs. 5,529 towards interest under section 64(1) (iii) of the Act on the ground that the said amount has accrued on a loan advanced to the firm. The Tribunal was of the view that in the partnership deed there is no clause which provided for a minor to contribute any capital and he had advanced the loan to the firm out of his separate funds on which interest had been paid. There was no material to show that the said income had any direct or indirect nexus with the interest income so earned by him.