COMMISSIONER OF INCOME TAX Vs. DHARMA CHAND

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, has referred the following question of law arising out of its order dated September 9, 1980, in respect of the assessment year 1976-77 :

(2.) THE brief facts of the case are that the assessee, Dharam Chand, was a partner of Messrs. Jain Vastralaya, Bhawani Mandi, in the status of a Hindu undivided family (HUF). THE assessment was completed under Section 143(1) on November 24, 1975, on a total income of Rs. 13,480. THE Income-tax Officer found that the minor sons of the assessee, namely, Shri Rajesh Kumar and Sanjay Kumar, were admitted as partners in the firm, Messrs. Kanhaiyalal and Sons, to the benefits of the partnership with effect from November 14, 1974. THE share of such minors was sought to be taxed on a protective basis in the hands of the father attracting the provisions of Section 64(1)(iii). It was also observed that the minors have received gifts from their grandparents after June I, 1973, and that, therefore, the provisions of Section 64(1)(vi) were also applicable and hence the income was taxed in the present case on a protective basis.

(3.) ACCORDINGLY, the reference is answered in favour of the assessee and against the Revenue. No orders as to costs.