D.K.Mahajan, J.

1. The Income-tax Appellate Tribunal, Delhi Bench "B", has referred the following question of law for our opinion under Section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act):

"Whether the assessee is entitled to the claim of Rs. 977 as interest paid in the year 1960-61 and Rs. 1,148 in the assessment year 1961-62 in the circumstances narrated above ?"

2. The circumstances that have been narrated by the Tribunal may now be stated : Naunihal and his two sons, Parshotam Singh and Iqbal Singh, constituted a registered firm. Naunihal had sufficient credit balance in his capital account and he issued instructions that the following sums be transferred to his daughter and daughters-in-law. Smt. Kamal Kumari is the daughter and Smt. Simla Devi and Smt. Tripta Devi are daughters-in-law, the former being the wife of Parshotam Singh and the latter being the wife of Iqbal Singh. A sum of Rs. 9,500 was gifted to Smt. Kamal Kumari and Rs. 4,500 each to the two daughters-in-law. The method adopted was that these amounts were debited in the books of account of the registered firm and were credited in the names of these three ladies. On these