TMI Blog1991 (12) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... e opinion of this court : "(i) Whether, on the facts and in the circumstances of the case and having regard to the terms of the relevant partnership deed and on a proper construction of section 64(1)(iii), the interest paid by the firm to the minor sons on the amounts credited in their accounts with the firm including interest on their accumulated profits cannot be regarded as income arising out of the admission of the minors to the benefits of partnership and whether such income from interest was rightly not included by the Income-tax Officer under section 64(1)(iii) in the hands of the assessee-individual ? (ii) Whether, on the facts and in the circumstances of the case and having regard to the terms of the relevant partnership deed, the implied findings of the Tribunal that interest paid by the firm to the two minor sons of the assessee was in deposit and that such deposits have no connection with the admission of the minors to the benefits of partnership are contrary to the weight of the record or are based on irrelevant considerations or without consideration of all the relevant facts and circumstances and whether the decision based on such findings is untenable in law ?" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the new or supplementary facts stated by the High Court. But, in the present case, it cannot be said that the order of the Tribunal in I. T. A. No. 198/(Gauhati) of 1979 is not incorporated in the statement of the case. A part thereof has actually been referred to, although the order was not annexed as a part of the statement of the case. Mr. Saraf has submitted that, in such a case, calling for a supplementary statement is not required and has referred us to a decision of the Bombay High Court reported as Orient Trading Co. Ltd. v. CIT [1963] 49 ITR 723. In that case, it has been held that (at page 737) : "Although the order of the Appellate Assistant Commissioner has not been annexed as a part of the statement of the case, it is still incorporated in the statement of the case, and a part thereof has been actually referred to. It would be permissible for us to look at the whole order itself in order to understand what the part which has been reproduced in the statement of the case actually and correctly means." We respectfully agree with the decision of the Bombay High Court. It is, therefore, held that, in such a case before us, a supplementary statement is not required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held to be a benefit which the minors received from their admission to the partnership in the firm. This decision will be relevant in this case. In S. Srinivasan v. CIT [1967] 63 ITR 273 (SC) ; AIR 1967 SC 571, the amount of profits falling to the share of the wife of the assessee and his two minor sons were allowed to accumulate in the account of the partnership for a number of years without any interest. There was clause in the deed of partnership that, if the firm required any sum and if any partner was willing to advance such sum, he could advance such amount as loan and the firm would pay interest at the rate of 12 annas per cent. per mensem. Afterwards, the partners decided to allow interest at 9 per cent. per annum on those accumulated profits. In the context of the case, the Supreme Court has held (at page 278): "The cases when interest is earned on a deposit or a loan differ from a case of the type before us where interest was earned on amounts of which the minors permitted the use by the firm, because they were their accumulated profits arising from the firm itself and because of their interest in the firm as persons admitted to the benefits of the partnership." Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest earned by the minor with the admission of the minor to the benefits of the partnership, but it is to be examined whether the finding of the Tribunal was perverse in view of question No. 2. Mr. Saraf, learned counsel for the assessee, contended that the burden lies on the Department to establish that such income of the minor has some connection with the admission of the minor to the benefits of the partnership. But no connection was established by the Department. He has referred us to a decision of the Madras High Court reported as P. A. P. Chidambara Nadar v. CIT [1970] 77 ITR 84 in support of his contention. The facts and circumstances of the case indicate that money that was kept in the firm by the minor was a deposit in the sense that it was payable by the firm to the minor at any time whenever the minor liked and it was not in the nature of capital. If that be the position, the interest earned by the minor was as deposit and had no relation with the admission of the minor to the benefits of the partnership, on the principles laid down by the Supreme Court in Srinivasan's case [1967] 63 ITR 273 in which the decision of the Bombay High Court in Bhogilal Laherchand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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