The Pune bench of the Income Tax Appellate Tribunal (ITAT), while deleting an addition for cash deposit, has held that the clubbing of income under the provisions of the Income Tax Act, 1961 is possible in the case of minor children only.
The assessee, Mr. Shri Vijay Vasantrao Mahadik has opened a bank account in the name of his erstwhile minor son Mr. Virendra Mahadik long back. He had also furnished his PAN number at the time of his minor son’s bank account opening. The Assessing Officer, during the proceedings, observed that the bank deposits of Rs.13.73 lacs as unexplained.
The Tribunal bench comprising Shri S.S. Godara (Judicial Member) and Dr. Dipak P. Ripote (Accountant Member) observed that there is hardly any dispute between the parties that the bank account herein belongs to assessee’s son Mr. Virendra Mahadik. Further, this bank account had seen cash deposits of Rs.28 lacs which have been assessed in assessee’s hands.
Deleting the addition, the Tribunal held that “Mr. Jasnani vehemently argued that the learned lower authorities have rightly gone by assessee’s PAN for taxing the impugned cash deposits in his hands. He could hardly have rebut the clinching fact that the assessee’s son; who was a minor at the time of account opening, has become a major on 23.05.2011 who is assessable in his independent capacity. We also wish to quote section 64(1A) of the Act wherein clubbing of income is provided in case of a “minor” child only which is not the case before us. Faced with the situation, we conclude that both the learned lower authorities have erred in law and on facts in adding the impugned cash deposits of Rs.13.73 lacs in assessee’s hands. The same stands deleted.”
Shri Nikhil Pathak appeared for the assessee.
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