1980 (7) TMI 141 - AT - Income Tax

Summary

Issues:
- Dispute over benami ownership of business between fathers and sons
- Transfer of capital to fathers' accounts
- Treatment of agricultural income as undisclosed sources

Analysis:
1. The primary issue in this case was the dispute over the ownership of a business between fathers and sons. The Income Tax Officer (ITO) believed that the sons were benamidars of their fathers and treated the business income as belonging to the fathers. The Appellate Assistant Commissioner (AAC) upheld this decision, emphasizing the transfer of capital to the fathers' accounts.

2. The second issue revolved around the treatment of agricultural income as undisclosed sources. The ITO added an amount to the sons' income, alleging it was from undisclosed sources. The AAC, however, considered the evidence presented, including agricultural land ownership and income, and concluded that the addition was not justified.

3. The Tribunal analyzed the conflicting views of the lower authorities and found the situation unclear. They questioned the basis for treating the sons as benamidars and the fathers as an Association of Persons. The Tribunal noted that if there was no partition in the family, the sons were undivided coparceners, and any income earned belonged to the Hindu Undivided Family (HUF).

4. Ultimately, the Tribunal reversed the decisions of the lower authorities, stating that the sons were an Association of Persons conducting business, and their income was their own. The Tribunal emphasized the principle that "apparent is real unless the contrary is proved," leading to the reversal of the previous orders.

5. Regarding the treatment of agricultural income, the Tribunal upheld the AAC's decision to delete the addition, as the evidence presented by the assessee could not be refuted. The Tribunal found the AAC's reasoning to be valid and well-supported, leading to the allowance of the assessee's appeal and the dismissal of the Revenue's appeal.