The Income Tax Officer included the capital gain of Rs.58,000/ in the assessees income in terms of Section 64 1 , which was objected to by the assessee.
The respondent assessee made a gift of Rupees ninety thousand to her minor son, Suryanarayana Reddy.
The said deposit earned yearly interest of Rs.9,288/ .
This was objected to by the assessee.
She was carrying on the business of mica mining and was also having income from property and money lending.
During the financial year 1956 57, the respondent made a cash gift of Rupees ninety thousand to her minor son, Suryanarayana Reddy.
The whole amount so realized was deposited by Bai Laxmibai in a particular firm in which her husband, Maneklal, as well as her son, Secantilal, were partners.
The matter was ultimately carried to this Court.
It is true that what was gifted by the assessee to her minor son was the cash of Rupees ninety thousand but it cannot be forgotten that that money was utilised for purchasing the said house property.
In the assessment of Maneklal for the Assessment year 1957 58, the Income Tax Officer included the aforesaid capital gain of Rs.70,860/ under Section 16 3 a iii of the Indian Income Tax Act which companyresponds to Section 64 1 iv companycerned herein .
As a matter of fact, the said house property was also being utilised for the purpose of assessees business until it was sold eight years later.
Eight years after the purchase of the house, i.e., on July 5, 1967, the said house property was sold to Tirupati Devasthanam for a companysideration of Rs.1,48,000/ .
Her second appeal was, however, allowed by the Tribunal relying mainly upon the decision of this Court in Commissioner of Income Tax.
The facts of this case squarely fall within the said rule.
There was a re constitution of the firm with effect from July 2,1954 whereunder the major son became a partner and the three minors son were a admitted to the benefits of partnership.
Thereafter, he gifted Rupees seventy five thousand to each of his four sons, three of whom were minors.
On the date of this sale also, Suryanarayana Reddy was a minor.
The assessee was a partner in a firm having seven annas share therein.
Even at the time of the said sale, Suryanarayana Reddy was a minor.
Learned companynsel also pointed out that the decision in Prem Bhai Parekh was explained and distinguished by this Court in Smt.
The said house property was being utilised for the purpose of the assessees business.
On the companytrary, the learned companynsel submits, the facts of Sevantilal Maneklal Sheth v. Commissioner of Income Tax Central .
He submits that the ratio of the said decision has numberapplication herein.
Thereupon, the said question was referred for the opinion of the High Court at the instance of the Revenue.
West Bengal III v. Prem Bhai Parekh Ors.
Her appeal to the Appellate Assistant Commissioner was dismissed.
This amount was immediately utilised for purchasing a house property at Gudur.
Out of those 2,424 ordinary shares, Bai Laxmibai sold 2,4000 shares on August 1, 1956 for a sum of Rs.1,54,8000/ , resulting in a capital gain of Rs.70,860/ , as companyputed under Section 12 B of the Indian Income Tax Act, 1922.
Similarly, in the assessment of Maneklal for the Assessment years, 1958 59 and 1959 60, the Income Tax Officer included the interest amount of Rs.9,288/ , again applying the said provision.
The said money was utilised immediately for purchasing a house property.
The respondent assessee is an individual.
He retired from the firm on July 1, 1954.
1970 77 I.T.R.27.
In companyputing the total income of an individual, it says, there shall be included all such income as arises directly or indirectly to a minor child number being a married daughter of such individual from assets transferred directly directly or indirectly to the minor child by such individual otherwise than for adequate companysideration.
