TMI Blog1980 (5) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... so made various deposits with the above two firms which they had received as gifts. The question for consideration before the ITO was whether in the assessment of the assessee, both the interest and the share falling to the minors were to be included under s. 64(1)(iii) of the Act. This section states that in computing the total income of an individual, there shall be included all such income as arises directly or indirectly to a minor child of such individual from the admission of the minor to the benefits of partnership in a firm. It was pointed out to the ITO that the partnership deeds of both the above firms did not make it compulsory for the minors to contribute any capital. cl. 7 of both the deeds dt.22nd Oct., 1968and8th Feb., 1973st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment of the assessee in the light of the decisions of the Madras High Court in the cases of S. Srinivasan Others vs. CIT (1976) 105 ITR 315 (Mad) and Addl. CIT vs. Misrimul Sowcar, (1979) 13 CTR (Mad) 308 : (1979) 119 ITR 123 (Mad). In this connection, he also referred to the decision of the Supreme Court inS. Srinivasanvs. CIT (1967) 63 ITR 273 (SC). 4. The ld. counsel for the assesses, on the other hand, relied on cl. 7 of the respective partnership deed. He also referred to the decision ofAllahabad. High Court in CIT vs. Smt. Triveni Devi, (1971) 81 ITR 511 (All) and Kaladhar Prashad Chaturvedi vs. CIT (1971) 82 ITR 713 (All). 5. After giving my careful thought to the whole matter, I am of the opinion that the Department cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posits in the firm. The interest standing to the credit of each minor son of the assessee could, therefore, be included in his income under s. 64 of the Act. 6. The cases relied on by the ld. Deptl. Representative, however, are clearly distinguishable. In the case ofS. Srinivasan(1967) 63 ITR 273 (SC it was found that the shares of profit of the wife and the minor sons were allowed accumulate without interest. With effect from the relevant previous year, the firm decided to allow interest on these accumulated profits. The question was whether the interest allowed was assessable in the hands of the assessee. It was held by the Supreme Court that the interest accrued to the wife and the minor sons at least indirectly because of their capaci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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