1. On an application filed under Section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the

following question for the opinion of this Court: “Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the loan accounts of the minors in the books of the firm, M/s. Ratnalaya, will not lose its character and will not partake of the character of capital account by virtue of the fact that the share incomes of the minors were credited to their loan account ?“

2. The partnership firm styled as M/s. Ratnalaya started vide partnership deed dated July 31, 1968, and it was constituted by the two major partners, namely, Smt. Kanchan Devi Golecha and Shri Satish Chandra Bothra. Two minors, Master Pankaj Kumar and Peeyush Kumar, were admitted in the partnership to the benefits of the partnership. These minors are sons of the assessee. Shri Peeyush Kumar Golecha, according to the assessee, deposited a sum of Rs. 5,000 on October 15, 1968, and a sum of Rs. 10,000 on March 14, 1969, with the firm. Similarly, Pankaj Kumar is said to have been deposited a sum of Rs. 14,000 on October 15, 1968, with the firm. Interest was paid to the min