| Case ID |
0aaa1a2b-4e1e-4e48-8886-f85b518c0e42 |
| Body |
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| Case Number |
Income-tax Reference No. 27 of 1967 and 215 of 197 |
| Decision Date |
Dec 01, 1976 |
| Hearing Date |
|
| Decision |
The Bombay High Court ruled on two references regarding the inclusion of interest credited to the accounts of the minor sons of the assessee in the total income of the father under the Income Tax Act. The court held that the interest on capital invested by minors in a partnership can be included in the father's total income, while accumulated profits remaining with the firm cannot be included. The court distinguished previous cases and emphasized the necessity of a causal connection between the minors' admission to benefits of the partnership and the income derived from it. Therefore, it was decided that the interest credited to the minors' accounts was includible in the total income of the assessee under the relevant provisions of the Income Tax Act. |
| Summary |
In the case of Commissioner of Income Tax, Bombay City II vs. Chandamal Kasturchand, the Bombay High Court addressed critical issues related to the Income Tax Act, particularly focusing on Sections 16 and 64. The case revolved around the income computation of an individual, Chandanmal Kasturchand, who had two major and two minor sons. The court examined the implications of interest credited to the accounts of minor sons within a partnership structure. The decision clarified that interest earned on capital investments made by minors admitted to partnership benefits could be included in the father's total income. This ruling is significant for understanding the tax implications for minors in partnership businesses and reinforces the connection between partnership benefits and income attribution under tax laws. The case serves as a precedent for future tax assessments involving minor children in partnership arrangements, emphasizing the importance of examining the structure and agreements of such partnerships when determining tax liabilities. |
| Court |
Bombay High Court
|
| Entities Involved |
Not available
|
| Judges |
TULZAPURKAR, J.,
DESAI, JJ
|
| Lawyers |
R. J. Joshi,
V. J. Pandit,
S. E. Dastur,
Mulla and Craigie, Blunt and Carat (Attorneys)
|
| Petitioners |
COMMISSIONER OF INCOME TAX, BOMBAY CITY II
|
| Respondents |
CHANDAMAL KASTURCHAND
|
| Citations |
1980 SLD 84,
1980 PTD 387
|
| Other Citations |
S. Srinivasan v. C. I. T. 631 T R 273 (S C),
Bhogilal Laherchand v. C.I. T. (1954) 25 I T R 523 (Bom.),
Chouthmal Kejtiwal v. C. I. T. (1961) 411 T R 570 (Assam),
C. I. T. v. Chinubhal (M) Modi (1968) 69 I T R 76 (Guj.),
C. I. T. v. Shah Jethaji Phulchand (1965) 57 I T R 588 (S C),
C.I. T. v. Shah Mohandas Sadhuram (1965) 57 I T R 415 (S C),
Ram Narain Garg (L.) v. C. I. .T. (1965) 55 I T R 435 (All.)
|
| Laws Involved |
Income Tax Act, 1922,
Indian Income-tax Act 1961
|
| Sections |
16,
16(3)(a)(ii),
64(ii)
|