Clubbing minor children's deposits in the father's income fails where the wife's source explanation is accepted.

Deposits standing in the names of minor children were not includible in the assessee's income under section 64(1)(i) because the Department failed to establish any basis for disregarding the wife's explanation that the funds were her own and had already been returned in her income. On the recorded facts, there was no reasoned ground to club the amount in the assessee's hands merely because he was the husband. The addition was therefore deleted and the proposed inclusion was held unsustainable.

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Issues: Whether the increase in deposits standing in the names of the assessee's minor children could be included in the assessee's income under section 64(1)(i) of the Income-tax Act, 1961.

Analysis: The addition was based on the assumption that, because the assessee was the husband, the deposits in the names of the minor children should be treated as his income. The record showed that the assessee's wife had already returned the sum as part of her income and had stated that the deposits represented amounts made by her, including in the names of the minor children. No reasoned basis was given for rejecting that explanation or for preferring the addition in the assessee's hands. Section 64(1)(i) was held inapplicable on these facts, since the Department had not established grounds to disregard the wife's version and club the amount in the assessee's income.

Conclusion: The addition of Rs. 3,405 in the assessee's hands was deleted and the inclusion was held to be unsustainable.

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