Vyas, J. - (1.)THIS order will also govern the disposal of Miscellaneous Civil Cases Nos. 212 of 1976 (Manaklal v. CIT), 213 of 1976 (Manaklal v. CIT), 214 of 1976 (Manaklal v. CIT) and 215 of 1976 (Manaklal v. CIT).
(2.)AS per orders passed in Miscellaneous Civil Cases Nos. 145 of 1971 (Mankalal v. CIT), 146 of 1971 (Manaklal v. CIT), 147 of 1971 (Manaklal v. CIT), 148 of 1971 (Manaklal v. CIT) and 149 of 1971 (Manaklal v. CIT), the Income-tax Appellate Tribunal, Indore, has referred the following two questions for the opinion of this court:
"(1) Whether, in the facts and circumstances of the case, the Tribunal was justified in holding that Shri Jagmohandas, the minor, is only bena-midar of his father, Manaklal ?

(2) Whether, in the facts and circumstances of the case, the Tribunal was justified in holding that the share income of the minor, Jagmohandas, from the firm of M/s. Manaklal Gordhandas be clubbed in the income of his father, Manaklal, who is not a partner in the said firm ?"

Facts leading to this reference have been stated in detail by the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal"), in its order of reference dated August 21, 1973, and may briefly be stated as under :

Manaklal, s/o Motilal (hereinafter referred to as "the assessee"). was assessed for the years 1961-62 to 1965-66, for the accounting period ending on Diwali of 1960 to 1964. Originally, he was apartner in the partnership firm of Manaklal Gordhandas in which he and his father-in-law, Ranchhoddas, were the only two partners. This partnership firm carried on business of sale and purchase of bullion and money-lending also. This partnership continued up to October 31, 1959, when it was dissolved. According to the terms of the dissolution, the share which Manaklal had in this firm, was treated as a loan to a newly constituted partnership firm under the name "Manaklal Gordhandas ", which was formed by Ranchhoddas and one Murlidhar on November 1, 1959. In this new partnership firm, Jagmohandas, the minor son of Manaklal, was admitted to its benefits. On the date of dissolution of the firm "Manaklal Gordhandas", Ranchhoddas took a sum of Rs. 12,500 (rupees twelve thousand five hundred) for making a gift of this amount to his daughter's son, Jagmohandas. The said amount was debited to the personal account of Ranchhoddas in the partnership firm, "Manaklal Gordhandas", on October 31, 1959. Manaklal, the father of the minor, received this amount and deposited it in a bank in the name of his minor son. Later, on November 3, 1959, he withdrew an amount of Rs. 12,400 from this account in the name of the minor son from the bank and deposited it in the name of the minor in the account books of the newly constituted firm-In the newly constituted firm, the share of Ranchhoddas was fixed at 47 per cent. The share of profits of the minor, Jagmohandas, was also fixed at 47 per cent. The share of the remaining partner, Murlidhar, was 6 per cent. As regards the liability for losses, the agreement of the newly constituted firm was that Ranchhoddas was to bear 90 per cent, of the losses and the remaining 10 per cent. of the losses were to be borne by Murlidhar.

When, the income of Manaklal, who had retired from the firm on October 31, 1959, was assessed as an individual for the years 1961-62 to 1965-66, the profits which the minor, Jagmonandas, earned in the newly constituted firm was treated as the income of Manaklal. The ITO held that Jagmohandas, who was admitted to the benefits of the newly constituted firm, was only a benamidar for his father, Manaklal, and that the income of the minor was to be treated as the income of his father, Manaklal. Consequently, in the opinion of the ITO, the individual income of Manaklal and the income, which his minor son, Jagamohandas, earned by way of profits in the newly constituted firm, were clubbed together and assessed accordingly. Against the order of the ITO, there was an appeal to the AAC, who held that the said income of the minor could not be treated as the income of his father. Against the appellate orders passed by the AAC for the years 1961-62 to 1965-66, the department preferred appeals before the Tribunal. The Tribunal held that the minor was only a benamidar of his father and his income was liable to be treated as the income of his father. While coming to that conclusion, the Tribunal held that the said amount of Rs. 12,500 was a gift from Manaklal to his minor son. However, subsequently, as per orders passed on the assessee's application, the said gift was treated as a gift not from Manaklal but from Ranchhoddas, the maternal grandfather of Jagmohandas.

(3.)AFTER the decision of the Tribunal, the assessee unsuccessfully requested the Tribunal to draw up the statement of the case and refer the questions of law to this court for opinion. The Tribunal, by its order dated October 16, 1970, refused to refer the case to this court. The assessee then approached this court and as per orders passed in Miscellaneous Civil Cases Nos. 145/1971 to 149 of 1971, the Tribunal was directed to refer the aforesaid two questions of law to this court for its opinion. This is how the case has been referred to this court for opinion on the aforesaid two questions of law.
The contention of the assessee is that initially the Tribunal erred in holding that the said gift of Rs. 12,500 to the minor, Jagmohandas, was from the assessee and not from Ranchhoddas, the assessee's previous partner, in the dissolved firm, Manaklal Gordhandas. It is then contended that even after holding that the said gift was from the maternal grandfather of the minor, the Tribunal erred in law in holding that it was Manaklal who continued to be a partner in the newly constituted firm, "Manaklal Gordhandas", benami in the name of his minor son, Jagmohandas, and that the profits earned by the minor in the newly constituted firm on November 1, 1959, it should not have been held as the income of Manaklal. Consequently, it was prayed that, in the facts and in the circumstances of the case, there was no justification, either on facts or in law, to come to the conclusion that Jagmohandas was a benamidar for his father, Manaklal, and the profits earned by him could not be clubbed with the income of his father as an individual.