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2010 (12) TMI 205 - AT - Income TaxSearch and Seizure - Assessment for block period – Undisclosed Income - Notice on minor - Held that: the fact of the assessee being a minor for a part of the block period, and for which the assessee adverts to the mention of her date of birth on the return form itself, would not operate to disqualify or imbue the notice, issued on a major, with legal infirmity. - the definition of an ‘assessee’ under the Act (section. 2(7)) does not exclude a minor. - the issue of notice u/s. 158BD not bad. Recording of satisfaction - the twin criterion for a valid initiation of proceedings u/s. 158 BD being that there must be materials found in search or evidence/s or information referable to those materials with the AO of the person searched or requisitioned to form a prima facie opinion that there is some income of the assessee for the block period and, further, which stands not disclosed or would not be disclosed to the Revenue, i.e., “undisclosed income’, by definition. - this satisfaction is impelling and manifest in the assessment order of the person searched. No known source of income during minor - The contention of the assessee having no known source of income during the relevant period is, in view of the deeming nature of section 69, of little consequence. The said provision, it needs to be appreciated, does not require for its application, a finding to the effect that assessee had some known source of income for the relevant period or prior thereto. If that be so, this argument could validly be taken by any ‘major’ assessee as well. Purchase of property in the name of near and ear ones - What would be more relevant for the purpose in the present case, is to see whether the assessee’s father had any source/s of income or not - No doubt, the Revenue has not proceeded against the assessee’s father in the matter, and which may have been detrimental to its case. However, section 64(1A) answers the situation, effectively precluding the adoption of a plea as being raised. - That is, a minor’s income, where not arising out of any personal labour or application of knowledge, skill, etc., as in the present case, is to be included in the computation of the total income of the parent whose income is higher. Increase in value - how the assessee’s adjacent plot could be valued at Rs. 7194 per cent, which would imply a price increase of 835% inside one year. So, however, a price increase of 10% per annum can be assumed as normal. The Revenue has also not furnished the guideline value of the property under reference, i.e., under the Stamp Act. We, accordingly, direct for the adoption of a purchase price at Rs. 54,000 per cent as against at Rs. 60,100 adopted by the Revenue. Levy of surcharge on assessed tax - apex court vide its decisions in the case of CIT v. Suresh N. Gupta (2008 -TMI - 40397 - SUPREME Court) and CIT v. Rajiv Bhatara (2009 - TMI - 32440 - SUPREME COURT); holding the proviso to section 113 to be clarificatory and curative in nature, so that it would therefore be applicable to all assessments made under Chapter XIV-B as per the rates specified in the relevant Finance Act, i.e., that applicable to the date of search. As such, the only mistake committed by the Assessing Officer; as it appears, on account of he being not cognizant of the minority status of the assessee, and which in our opinion should have been, on the issue having been raised before him, set right by the first appellate authority, is that the income for the years for which the assessee is a minor, ought to have been clubbed in the hands of her parent whose income is higher – Appeal is partly allowed
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