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TMI Blog2005 (12) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... onsistency in the method adopted by the Assessing Officer wherefrom the true profits from his business could be worked out and rejected the books of account of the appellant under section 145(2) of the Act and made his own assessment of the income of the appellant determining the total income of the appellant. In the said assessment the Assessing Officer also took into consideration the agricultural income of the minor son of the appellant for the purpose of determining the rate of income-tax applicable to the income of the appellant. Aggrieved by the assessment order dated March 12,1999, of the Assessing Officer as well as the demand, the appellant filed an appeal before the Commissioner of Income-tax (Appeals), Bhopal, numbered as Appeal No. IT/u-22/1990-2000. The first two grounds of appeal related to addition of Rs. 43,742 and Rs. 39,239 on account of low gross profit on sale of gold and silver ornaments and the appellant urged before the Commissioner of Income-tax (Appeals) that he had maintained proper books of account and, therefore, the books of account could not be rejected under section 145(2) of the Act by the Assessing Officer but the Commissioner of Income-tax (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly decided the issue against the appellant. Aggrieved by the aforesaid order of the Income-tax Appellate Tribunal, the appellant has filed this appeal before this court. On August 6, 2002, this court while admitting this appeal formulated the following two substantial questions of law: "(1) Whether the Tribunal having accepted the correctness of the account books of the appellant-assessee erred in invoking sub-section (2) of section 145 of the Income-tax Act can put its own assessment regarding gross profits on the sale of gold and silver? (2) Whether the Tribunal erred in law in adding the agricultural income of minor son to the income of the appellant-assessee even when section 10 of the Income-tax Act expressly excluded such an income?" After formulating the aforesaid two substantial questions of law, the court also observed in the order dated August 6, 2002, that all other questions proposed in the memo, of appeal do not arise as they are mainly questions of fact. We have accordingly confined the hearing of this appeal on the aforesaid two questions of law as framed in the order dated August 6, 2002, by this court. Mr. Saxena, learned senior counsel appearing for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of accounting employed is such that in the opinion of the Assessing Officer the income of the appellant could not be properly deduced from such accounts maintained by the appellant. Thus, it is only in a case where accounts were not correct or complete or where accounts are correct and complete but the method employed in such accounting is not such as to enable the Assessing Officer to deduce the income of the appellant properly, the assessment of the income of the appellant could be made in such manner as the Assessing Officer may determine. The case of the appellant was that he had maintained the accounts correctly and the accounts were also complete and therefore his income. We have seen that both the Assessing Officer and the Commissioner of Income-tax (Appeals) in their respective orders took the view that the accounts of the appellant were not correct and complete. Aggrieved by the said finding of the Assessing Officer and the Commissioner of Income-tax (Appeals), the appellant had gone up in appeal before the Tribunal and urged that the accounts of the appellant had been correctly maintained and the Tribunal, although it held that the Assessing Officer had not found any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of income-tax that is applicable to the income of the appellant. Mr. Jain learned counsel appearing for the Department, on the other hand, submitted that the agricultural income of the minor is not being included in the income of the appellant for the purpose of levying any income-tax on the same but has been included by the Assessing Officer only for the purpose of determining the rate that is to be applicable to the income of the appellant. He submitted that since the Finance Act, 1973, every Finance Act has been making such provision for taking into consideration the agricultural income of the assessee for the purpose of determining the rate that would be applicable to the income of the assessee. He further submitted that section 64 (1A) of the Act expressly provides that in computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child. Section 64(1A) of the Act is quoted herein below: "64.(1A) In computing the total income of the any individual, there shall be included all such income as arises or accrues to his minor child ..." The language of sub-section (1A) of section 64 makes it clear that in adopting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act the rate or rates at which such income-tax will be paid on such incomes for any assessment year will be stipulated in the Central Act. In accordance with the provisions of section 4 of the Act, the Finance Act (Central Act) has been stipulating rate or rates at which income-tax is to be charged in the particular assessment year. For the assessment year 1996-97, the Finance (No. 2) Act, 1996, clearly provides under Chapter II, section 2, that the net agricultural income shall be taken into account in the manner provided therein for the purpose of determining the rates of income-tax applicable to the income of the assessee. In view of the said clear provisions in section 4 of the Act, Chapter II and section 2 of the Finance (No. 2) Act, 1996, we have no doubt in our mind that the agricultural income of the minor child of an assessee, has to be taken into consideration for the purpose of determining the rate of tax that is applicable to his income. We, accordingly, answer the second question in the negative and hold that the Tribunal did not err in law in coming to the finding that the agricultural income of the minor son of the appellant had to be included in the income o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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