CHOUTHMAL KEJRIWAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following question of law has been referred to us for opinion by the Income-tax Appellate Tribunal, Calcutta Bench, under section 66 (1) of the Indian Income-tax Act (hereinafter called "the Act") :

(2.) THE assessee Chouthmal Kejriwal, is a partner of the registered firm M/s. Bhimraj Chouthmal. Chouthmal had four sons. Two of them Prasanna and Om Prakash are minors and the other two Loknath and Gaurisankar are majors. For the assessment year 1954-55 in the account of Prasanna Kumar a sum of Rs. 9,547 has been credited - Rs. 7,056 as share of profit and Rs. 2,491 as interest. In the account of Om Prakash a total sum of Rs. 9,536 is credited which comprises of Rs. 7,055 as the share of his profit and Rs. 2,481 as interest. For the assessment year 1955-56 in the account of Prasanna Kumar a sum of Rs. 9,010 is credited comprising of Rs. 5,794 as the share of his profit and Rs. 3,216 as interest and in the account of Om Prakash Rs. 8,996 has been credited comprising of Rs. 5,794 as the share of his profit and Rs. 3,202 as interest.

(3.) THE Assistant Commissioner relied upon the case of Bhogilal Laherchand v. Commissioner of Income-tax. That was a case of a deposit by the minor. THE assessee in that case was partner in the firm of M/s. Bhogilal Laherchand. THE two minor sons of the assessee were admitted to the benefits of partnership of the firm. In the relevant year of account in the books of the firm the two minors were each credited with interest of Rs. 43,210 on the moneys standing to their credit in the books of the firm. THE Income-tax Officer included the share in the profits of the firm of the two minors amounting to Rs. 2,10,154 and the interest amounting to Rs. 86,420 in the total income of the assessee. THE inclusion of interest by the Income-tax Officer earned by the minors in the income of the father was challenged. Clause 3 if the deed of partnership which was relevant in that case was as follows :