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TMI Blog1967 (3) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... her in view of the fact that there was no contribution of any sum in the Galla and Calcutta firms by the minor son out of the gift money from the father, the share income from those two firms was liable to be included in the assessment of the father under section 16(3)(a)(iv) ? " These questions arose out of the following facts : The respondent, Jwalaprasad Agarwala, hereinafter referred to as " the assessee", was a partner in Messrs. Onkarmal Jwalaprasad. He divided the balance of his capital account as partner in the books of that firm in four equal parts and made a gift of a sum of Rs. 74,721 to each of his four minor sons in July, 1953. During the accounting year relevant to assessment year 1959-60, three of his sons had attained majo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share of profits and interest accrued to the appellant's son in view of his invesment of capital received as gifts from the appellant, I think it will be reasonable to hold it as an asset transferred by the appellant to the son " indirectly ". He accepted the second contention but we are not concerned with this point. The assessee appealed to the Income-tax Appellate Tribunal. The Appellate Tribunal noticed that some time during the previous year for 1957-58 assessment year a sum of Rs. 11,000 out of the personal account of Parameshwar Agarwala, as appearing in the books of the Dhubri firm had been transferred to the Calcutta firm, and that no capital seems to have been invested in the name of the minor in the Galla firm. The Tribunal re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or son. In view of this, the provisions of section 16(3)(a)(iv) are clearly applicable both in respect of the interest on the original capital sum of Rs. 74,721 and the share incomes of the minor as derived from the above-mentioned three firms." The Tribunal, however, excluded the interest on the other accretions to the capital account of the minor as appearing in the three firms' accounts from the assessment of the appellant. The High Court, on a reference, answered the questions in favour of the assessee. The Commissioner of Income-tax obtained special leave from this court and the appeal is now before us. The High Court first dealt with the income of the minor from the Galla firm and the Calcutta firm. The High Court held that " me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... father. Coming to the Dhubri firm, the High Court held that the Tribunal had relied on two circumstances in support of its finding that the share of the minor in the Dhubri firm was his income arising out of the transfer of assets of the father, the assessee. The first circumstance taken by the Tribunal was that the past record of the assessee showed that this objection had never been raised before. We agree with the High Court that this circumstance is not evidence of the fact that the minor's share of profits in the Dhubri firm arose out of the assets transferred by the father. It seems to us that this circumstance is wholly irrelevant for determining this point. The second circumstance relied upon by the Tribunal was that the minor had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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