Taxability of interest on minors' deposits turned on voluntary disclosure claims and was upheld against the assessee.

Interest earned on deposits standing in the names of minor children was held taxable in the assessee's hands where the deposits were claimed to be explained by voluntary disclosures under the Voluntary Disclosure Scheme, but the governing Supreme Court precedent had since rejected that basis. The earlier Tribunal view, which relied on a contrary High Court decision, could not survive after the Supreme Court's ruling. The reference was answered against the assessee and in favour of the Revenue, and the deletion of the addition was not sustained.

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Issues: Whether interest on deposits standing in the names of the assessee's minor children was taxable in the assessee's hands on the footing that the deposits were explained by voluntary disclosures made under the Voluntary Disclosure Scheme of the Finance (No. 2) Act, 1965.

Analysis: The reference concerned assessment year 1971-72 and arose from the Tribunal's view that the deposits in the names of the minor children stood explained by the voluntary disclosures. That view had been taken on the strength of an earlier decision of the same Court, but the Supreme Court had since held that such voluntary disclosures did not validate the assessee's claim in the manner accepted by the Tribunal and had overruled the earlier contrary view.

Conclusion: The question was answered in the negative and against the assessee, and the interest income was held taxable in the hands of the Revenue's assessed.

Final Conclusion: The reference was decided in favour of the Revenue, and the Tribunal's deletion of the addition could not be sustained.

Ratio Decidendi: A voluntary disclosure made in the names of minors does not, by itself, establish that deposits are explained so as to exclude interest income from assessment in the hands of the assessee when the governing Supreme Court precedent holds otherwise.

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