Law: Income Tax Act, 1961

Section: 64

Income-tax----Total income---Inclusions in total income---Income of minor child from admission to benefits of partnership---Interest on capital invested in firm by minor child is includible in the total income of the parent---Indian Income Tax Act, 1961, S.64 Where the assessee was a partner in several firms and her minor sons were admitted to the benefits of the partnership: Held, that interest accruing on the capital investment by the minors in the firms was includible in the total income of the assessee under section 64(1)(iii) of the Income Tax Act, 1961. CIT v. Sri Ram Ratan (1996) 217 ITR 692 (All.) fol. Kaladhar Prasad Chaturvedi v. CIT (1971) 82 ITR 713 (All.) and CIT v. Smt. Nirmala Devi (1987) 166 ITR 253 (MP) ref. JUDGMENT At the instance of the Revenue, the Income-tax Appellate Tribunal (Delhi Bench "E", Delhi.) referred the following questions relating to the assessment year 1976-77 for the opinion of this Court:-- "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the interest income of Rs.4,334, in the all, accrued to the three minor children of the assessee, was not income which arose directly or indirectly to the minor children of the assessee from their admission to the benefits of partnership in the firms ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs.4,334 made under section 64(1)(iii) of the Income Tax Act, 1961, from the total income of the assessee for the assessment year 1976-77 ?" A notice was sent to the assessee by registered post as early as on September 15, 1981. The registered envelope has not been received back undelivered and therefore, the petitioner presumed to have been served sufficiently. Apart from that, the assessee was served personally by the Income-tax Inspector of the Department on October 8, 1982. Despite service of notice, the assessee has not put in appearance, though the list has been revised. We have, therefore, heard only standing counsel. The facts are that one of the minor sons of the assessee, namely, Padan Chand Jindal, was admitted to the benefits of the partnership firm, Impex…

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