Protective additions in minors hand not required if made on substantive basis in fathers hand

ITAT DELHI BENCH ‘A

ITA No. 407/Del/2011 -Assessment Year : 2004-05

Master Akshay Bansal Vs. Income Tax Officer

ITA No. 408/Del/2011 – Assessment Year : 2004-05

Miss Ayushi BansalVs. Income Tax Officer

PER G.D.AGRAWAL, VP:

These two appeals by the assessees are directed against the order of learned CIT(A)-XXVIII, New Delhi dated 1^st October, 2010 for the assessment year 2004-05.

2. The assessees have raised various grounds of appeal. However, they are all against the assessment of 2,51,000/- in the hands of each assessee on protective basis.

3. We have heard the arguments of both the sides and perused the material placed before us. The facts of the case are that both the assessees are minor children of Shri Kamal Piyush. During the accounting year relevant to the assessment year under consideration, Master Akshay Bansal had received the gift of 2,51,000/- from Shri Ashok Kumar Gupta and Miss Ayushi Bansal had received the gift of Rs. 2,51,000/- from Shri Mukesh Gupta. The Assessing Officer has noted that since both these assessees are minor children of Shri Kamal Piyush, therefore, their income is to be assessed in the hands of Shri Kamal Piyush under Section 64 of the Income-tax Act, 1961. However, he made the assessment of 2,51,000/- each on protective basis in the case of both the above assessees. On appeal, learned CIT(A) held that the protective addition in the hands of these two assessees are not required but finally, he held that the appeals of the assessees are dismissed. Therefore, the assessees are aggrieved. The relevant finding of the learned CIT(A) in this regard reads as under:-

“6. In the asstt. Order, the A.O. has stated that “during the course of asstt proceedings in the case of Sh. Kamal Piyush it was gathered that the assessee is minor, the above income will be clubbed u/s 64 in the case of Sh. Kamal Piyush’. In his submissions, the appellant has also stated that Master Akshay Bansal and Miss Ayushi Bansal are minors. In view ofthese facts, their income is liable to be added in the hands ofthe appellant. Since the addition on substantive basis, has been confirmed in the hands of Shri Kamal Piyush, the father of Master Akshay Bansal, the protective addition in the hands of Master Akshay Bansal is not required.

7. With these remarks, the appeal is dismissed.”

4. Similar finding is recorded in the hands of Miss Ayushi Bansal.That the learned CIT(A) has arrived at the conclusion that the protective addition made in the hands of both the above assessees is not required. The above finding of learned CIT(A) has been duly accepted by the Revenue. The learned counsel for the assessee has stated that the only addition made in the hands of both the above assessees was the protective addition of 2,51,000/- each. The learned CIT(A) has held that the above additions are not required in their hands. Therefore, as a consequence, in paragraph 7 of the learned CIT(A)’s order, the final conclusion should have been that the appeal is allowed.

5. After considering the arguments of both the sides, we agree with the submission of the learned counsel. The only addition made in the hands of both the above minor children of Shri Kamal Piyush was the protective addition of 2,51,000/- which was added on substantive basis in the hands of Shri Kamal Piyush. As per the finding of learned CIT(A) in paragraph 5, he held that the above additions are required to be made on substantive basis in the hands of Shri Kamal Piyush and in paragraph 6, he held that the protective addition in the hands of Master Akshay Bansal and Miss Ayushi Bansal is not required. With this finding in paragraph 6, the entire addition made in the hands of both the above assessees stood deleted. Therefore, the learned CIT(A) has in fact allowed the appeal of both the above assessees. We, therefore, uphold the finding of learned CIT(A) in paragraph 6 of his order and further hold that once the learned CIT(A) has already deleted the entire addition made in the hands of these two assessees, he should have concluded that the assessees’ appeals are allowed. With this remark, the assessees’ appeals are disposed of.