COMMISSIONER OF INCOME TAX Vs. ANANDI DEVI

JUDGEMENT

(1.) THIS reference under Section 256(1) of the Income Tax Act, 1961, at the instance of the assessee, is to answer the following question of law: Whether on the fact and in the circumstances of the case, the Tribunal was right in holding that the minors received interest on their capital accounts and, therefore, the interest income was includible in the trial income of the assessee within the meaning of Section 64(1)(iii) of the Act, 1961 ?

(2.) RELEVANT assessment years are 1975 -77 to 1978 -79. The assessee claimed exclusion of the interest income received by the minors Rajkumar and Mangilal admitted to the benefits of partnership in computation of the total income. It was contended by the assessee that the minors were not under obligation to contribute to the capital of the partnership and, therefore, the interest income was their deposit. The ITO rejected the contention. Ultimately the Tribunal also has rejected the assessee's contention. It has been held that the interest income in question received by the minors during these years from the partnership was rightly included while computing the total income of the assessee in accordance with Section 64(1)(iii) of the Income Tax Act, 1961, Hence, this reference at the instance of the assessee.