B.P.SARAF, J. - (1.)BY this reference made by the Tribunal at the direction of the High Court of Judicature at Bombay under S. 256(2) of the IT Act, 1961, the Tribunal has referred the following question of law for opinion :
"Whether, on the facts and in the circumstances of the case, interest arising to the assessee's wife and minor child is assessable in the hands of the assessee under S. 64(iii) and 64(iv) of the IT Act, 1961 ?"

(2.)THIS reference relates to 10 assessment years and arises from two common orders of the Tribunal disposing of 10 appeals of the assessee relating to his assessments for the years 1959 60 to 1969 70 excluding, however, asst. year 1962 63. One of the common orders relates to five assessment years from 1959 60 to 1964 65 and it is dt. 25th Sept., 1970. The other common order dt. 29th Sept., 1970 relates to 5 assessment years, viz., 1965 66 to 1969 70.
The assessee is Shri Kanchanlal Vadilal, son of Shri Vadilal Chunilal. He is a partner along with his father and others in the firm of M/s Kanchanlal Vadilal & Co. Shri Vadilal had a wife Vasantibai by whom he had no issue. She had, however, a step son Kanchanlal. Kanchanlal had his wife Padma and a minor son Pradeep. On 26th Oct., 1954 Shri Vadilal made a gift of Rs. 1 lakh to his daughter in law Padma, wife of the assessee. On the same day he also made a gift of Rs. 50,000 to his minor grandson Pradeep, son of the assessee. Thus on the said date Shri Vadilal made gifts aggregating to Rs. 1,50,000 to the wife and minor child of the assessee. Nearly five months later on 25th March, 1955 the assessee made a gift of Rs. 1,50,000 to Vasantibai wife of Shri Vadilal, who, as stated above, had made gifts to his wife and son. The gifts were effected by passing necessary transfer entries in the books of the firm of M/s Kanchanlal Vadilal & Co. in which the assessee and his father were both partners.

(3.)IN the assessments of the income of the assessee for the asst. yrs. 1959 60 to 1969 70, the ITO took the view that the gift of Rs. 1,50,000 made by the assessee amounted to an indirect transfer of his assets to his own wife and minor son within the meaning of S. 16(3)(a)(iii) of the Indian IT Act, 1922 and S. 64(iii)/(iv) of the IT Act, 1961. He, therefore, included the interest earned by the assessee's wife and the minor son on the above amounts in the income of the assessee. The particulars of such interest income treated as income of the assessee are as under :
(*This difference of Rs. 43 remains unexplained). The assessee filed appeals before the AAC which were dismissed. The assessee filed further appeals to the Tribunal. The Tribunal allowed the appeal following the decisions of the Bombay High Court in CIT vs. Wadilal Chunilal (1963) 47 ITR 305 (Bom) and H.N. Patwardhan vs. CIT (1970) 76 ITR 279 (Bom).