TMI Blog2012 (11) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Income Tax Appellate Tribunal, Agra Bench, Agra in ITA No. 8152/Del/1992 for the assessment year 1988-89. The appeal was admitted on 19.7.2007, on the following substantial questions of law:- (1) Whether on the facts and in the circumstances of the case the Tribunal is legally justified in holding that the reasons recorded for reopening the assessment does not stand legal security. (2) Whether on the facts and circumstances of the case the Tribunal is legally justified in deleting the following additions. (i) Rs. 1, 55, 000/- on account of unexplained investment in the hundies holding that there was no escapement of income in respect of hundies. (ii) Rs. 49, 925/- as profit earned by Km. Rashmi and Master Annu Bansal ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t accept the explanation of the assessee that his children had independent income, although accounts were filed in respect of the children namely the capital accounts, interest account, balance sheet and profit loss account along with return of the income. The AO found that the minor children, not competent to enter into contract except through their guardian, did not earn any income. Their income was that of the assessee. The papers seized during the course of search were only a part of the scheme in which the assessee distributed his income. The AO thus made addition of Rs. 49, 925/- in the income of the assessee. For unexplained investment in hundies, the AO observed that during the course of search, certain hundies were recovered, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness on behalf of minors. In such case the income of the minors cannot be included in the hands of the guardian. There was no justification for treating the income for the minor as income of the assessee. 6. In respect of addition of Rs. 1, 55, 000/-, it was held by the Tribunal that the accounting period mentioned in the assessment order would be December, 1987 to 31st March, 1989 (transitional period). The assessee had shown the entire hundies amounting to Rs. 1, 55, 000/- in the return filed for the assessment year 1989-90. These hundies could not be assessed in the assessment year 1988-89, and even otherwise these were disclosed by the assessee in the relevant year 1989-90, hence the addition of Rs. 1, 55, 000/- was deleted. Regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineness of the unexplained deposit of Rs. 40, 000/-. 8. We have examined the orders passed by the Income-tax authorities and do not find any error of law in the order of the Tribunal. There was no material found in the search on which the income of the minor children, who were independent assessees and were filing returns along with the capital account and profit and loss account. Their father could have carried out the business on their behalf and thus the Tribunal was right in holding that their income could not be clubbed with the income of the assessee. Section 64 (iii) was omitted by the Finance Act, 1992 with effect from 1.4.1993 and Section 64 (1A) providing for clubbing of all income of the minor child to be included in the income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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