The assessee is the Managing Director of the Karnal Distillery Company Limited, Karnal.
But the Tribunal did make a reference at the instance of the Revenue on being moved under Section 256 1 of the Act as already stated.
The assessee further urged that the amount in question having been debited from the accounts of Messrs Modern Property Dealers and thereafter the assessee having given the same to the partner of the said Messrs Modern Property Dealers and said amount ultimately having been refunded to the assessee, the High Court erred in holding that it was number a loan transaction.
The Assessing Officer, however, came to the companyclusion that the interest derived from the aforesaid amount has to be taken as an income of the assessee and accordingly the assessment order was passed.
The said partners had 1/3rd share each in the partnership.
On 1.4.1963 the aforesaid amount was shown in the accounts of Messers Modern Property Dealers to have returned to the assessee and further on the very same day it was also shown that the assessee gave the said amount as loan equally to the three partners of the Messrs Modern Property Dealers.
During the Assessment Year 1963 64, the assessee has shown the interest derived from the aforesaid so called loan amount in his return but later on a revised return was filed deleting the aforesaid amount.
So far as the subsequent assessment years however, the Assessing Officer came to the companyclusion that the interest income derived has to be assessed in the hands of the assessee and infact numberloan had been advanced by the assessee to his children who were said to be the partner of the firm Messrs Modern Property Dealers and the Appellate Assistant Commissioner also companyfirmed the order of the Assessing Officer.
1,74,639.00 on 3.4.1962.
The assessee challenged the said order in appeal before the Income Tax Appellate Commissioner and then in second appeal before the Tribunal but lost in the forums.
The Income Tax Appellate Tribunal Chandigarh Bench referred the following question to the High Court for being answered under Section 256 1 of the Income Tax Act, 1961 namely Whether the Tribunal has been right in law in deleting the addition on account of interest in respect of the assessees children and his wife for the assessment years 1967 68 to 1970 71.?
As per the books of accounts of the companypany said assessee has a deposit of Rs.
2586/1983 J U D G M E N T PATTANAIK.
W I T H CIVIL APPEAL NO.
The aforesaid amount was shown to the credit of three partners in equal shares, in the books of accounts of Messers Modern Property Dealers.
The aforesaid amount was debited to the credit of Messers Modern Property Dealers, Karnal, the partnership firm companysisting of two sons and daughter of the assessee.
J. These appeals by grant of special leave are directed against the judgment of the Punjab and Haryana High Court, answering the question posed in favour the Revenue and against the assessee.
