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2014 (8) TMI 202 - HC - Income TaxClubbing of income u/s 64(1)(iii) – Interest paid to minors from partnership firm - Whether the amounts standing to the credit of respective account of the respective minors on which the interest have been paid was required to be treated as capital or as loan advanced to the firm and/or the deposit – Held that:- The AO rightly was of the view that the provision of Section 64(1)(iii) of the Act cover the payments of interest made to minors on their deposits with the firms as it amounted to income which arose indirectly to the minors - there was no other material and/or basis for the Tribunal to come to the conclusion that the account in the respective partnership firms were the loan and/or advance - Considering the relevant clauses in the partnership deeds the amount credited in the account of the respective minors on which interest has been paid, is to be treated as capital investment - section 64(1)(iii) of the Act as it stood at the relevant time would be attracted and the AO rightly clubbed the interest earned by the minors on the amount lying that the partnership form while computing the total income of the assessee – Decided in favour of Revenue.
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