1993 (12) TMI 96 - AT - Income Tax

Summary

Issues:
1. Assessment of income from investments in the name of minor children.
2. Addition of unexplained investment in the name of a minor child.

Analysis:

Issue 1: Assessment of income from investments in the name of minor children
The appeal involved the assessment of income from investments in immovable properties made in the names of minor children of the assessee. The Income Tax Officer (ITO) observed that the minor children had filed amnesty returns admitting income from other sources, which the ITO believed were financed by the assessee, their father, due to the limited sources of income for the minors. The first appellate authority upheld the decision, leading to the appeal before the Tribunal. The Chartered Accountant representing the assessee argued that the minor children had been assessed to tax in previous years and had accumulations over time. The Tribunal set aside the CIT(A)'s order and directed the Assessing Officer to re-examine the sources of income for the minor children, considering their past assessments and accumulations to avoid double taxation.

Issue 2: Addition of unexplained investment in the name of a minor child
The second issue pertained to the addition of Rs. 27,410 as unexplained investment in the name of a minor child, which the Assessing Officer attributed to the father. The Tribunal noted that the Assessing Officer had already assessed a sum of Rs. 39,200 in the hands of the father, representing investments in the minor child's name. The Tribunal emphasized that any further addition would lead to double taxation if the father had indeed financed the investments. Moreover, if the minor child had made the investments from his own funds, the sum offered under other sources in the amnesty scheme would constitute the source of investment. Consequently, the Tribunal deleted the addition of Rs. 27,410, stating it could not be sustained from any perspective.

In conclusion, the Tribunal partly allowed the appeal, directing a re-examination of the sources of income for the minor children and deleting the addition of unexplained investment in the name of a minor child.