D.b. Income Tax Appeal v. Anand Bhati Date Of Order : 08.08.2005

D.B. INCOME TAX APPEAL NO. 34/2004.D.B. INCOME TAX APPEAL NO. 35/2004.CIT II JODHPURVS.ANAND BHATIDATE OF ORDER:08.08.2005. HON'BLE MR. RAJESH BALIA,J.HON'BLE MR. R.S. CHAUHAN, J. Mr. Sangeet Lodha for the appellant. Mr. Anjay Kothari for the respondents. These two appeals have been filed by theRevenue against the order of the Tribunal dated 13.5.2003by which the appeal of the Revenue and cross-objection bythe assessee relating to appeals arising out of AssessmentYears 1994-95, 1995-96 respectively have been decidedby a common order. The question which was framed at the time ofadmission of this appeal reads as under: “Whether on the facts and in the circumstanceof the case, the learned Tribunal was legallycorrect in dismissing the appeal of theDepartment and upholding the order of thelearned CIT (A), directing to exclude theincome of Smt. Munni Devi and two other AOPsand whether the finding of the learned Tribunalis perverse”. The facts of this case are similar to D.B.Income Tax Appeal No.40/2004 CIT vs. Om Prakash Bhati. Thesaid appeal related to the assessment of brother of presentrespondent assessee as the question related to the income of Smt. Munni Devi wife of respondent assessee and twoother associates of persons, whose income was clubbedwith the income of the assessee for two assessment yearsand as protective measure, Smt. Munni Devi and two otherassociates were subjected to the protective assessment inrespect of the income shown to be the income of therespective person included in the income of the respondentassessee. The additions were made on the ground thatthe respective assessees had shown their noknowledgeablity about the affairs of the income earned bythem. However, the CIT (Appeals) as well as the Tribunalfinding that all the persons whose income has beenclubbed in the hands of the respondent assessee are therepresentatives of the relatives of the assessee's familyand were assessed in their own right. Munni Bai wasassessed at least since 1984-85, whereas mother andbrother of the assessee had been since assessed before1982-83, which furnishes the foundation that they hadsufficient capability in the source of income from whichnew investments could have been made in shares underrelevant orders. Subsequent to two orders in questionalso, the assessments have been made in respect of respective assessees in their substantive capacities. On the aforesaid premises, it was held by theCIT (Appeals) as well as the Tribunal that the income ofthe existing assessees could not have been clubbed withthe income of the respondent assessee as such, merely onthe basis of showing their ignorance about the generalaffairs of the business, which could be conducted throughresponsible member of family. Be that as it may, the finding recorded by theTribunal as well as the CIT is founded on the relevantmaterials on the question of clubbing of the income of thedifferent persons with the income of the assessee,therefore, they do not require any interference in theseappeals. Moreover, we have been informed that therespective persons, whose income for the assessment year1994-95, 1995-96 have been assessed on protective basisand substantively in the hands of the assessee have sincemade declaration under K.V.S.S., and the same has beencertified by C.I.T. which brings all disputes concerning suchdeclared income beyond further scrutiny. Anil/ In view thereof, there is no merit in theseappeals and the appeals are hereby dismissed. No order as to costs. (R.S. CHAUHAN)J. (RAJESH BALIA)J.