SHRI RAJESH JAIN,BHOPAL vs. THE ITO 2(1), BHOPAL

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ITA 602/IND/2019Status: DisposedITAT Indore03 June 2020AY 2013-144 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the revenue authorities failed to consider the documentary evidence provided by the assessee, which clearly established that the cash deposit related to his wife's business income. Therefore, the addition made by the AO was unjustified.

What were the facts?

The Assessing Officer (AO) treated a cash deposit in a joint bank account as undisclosed income under Section 68. The assessee argued that the deposit belonged to his wife, who co-owned the account and ran a coaching institute, providing documentary evidence.

What were the issues?

Whether cash deposits in a joint bank account can be added as undisclosed income of one co-owner when evidence suggests it belongs to the other co-owner's business receipts.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE SMC BENCH, INDORE

Before: SHRI KUL BHARATShri Rajesh Jain, Bhopal

For Appellant: Smt. Amita Varshney, CA
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 28.02.2020Pronounced: 03.06.2020

O R D E R This appeal is filed by the assessee against the order of ld.

CIT(A)-1, Bhopal dated 26.03.2019 pertaining to Assessment year 2013-14. The assessee has raised following grounds of appeal:

1.“That the Ld. lower authorities have erred in not appreciating the fact that the cash deposit in joint bank account was part of assessee’s wife’s business receipts, even when documentary evidences were produced and explained. 2. That the appellant craves leave to add or alter any of the grounds of appeal on or before the final hearing if necessary so arises at the time of hearing.”

2 SMC – Rajesh Jain of 2019

2.

Facts in brief are that the AO considered deposit of cash in Vijaya Bank Account, as undisclosed income u/s 68 of the Act.

The assessee submitted before the AO that the said bank account is a joint account of the assessee with his wife and his wife runs a Coaching Institute and as a proof of business the assessee submitted copy of service tax registration. The assessee also submitted that his wife is a taxpayer having source of income from Coaching Institute, rental income and bank interest and regularly files income tax return. Copy of ITR, Balance sheet and profit and loss account was also enclosed. The rental income of the assessee and his wife is deposited in this saving account and his wife is at liberty to withdraw or deposit from her bank as per her requirement. Therefore, it is wrong to assume that the assessee is sole owner of funds in the said bank account. But the AO did not agree with the submission of the assessee and made the addition of Rs.1,00,000/-. Against this the assessee approached the Ld. CIT(A) who also confirmed the addition. Still aggrieved the assessee is before this Tribunal.

3.

Ld. counsel for the assessee submitted that the cash does not relate to the assessee but relates to his wife who was co-owner in the said bank account being a joint account of the assessee with 3 SMC – Rajesh Jain of 2019 his wife and his wife runs a Coaching Institute and as a proof of business, the assessee filed the requisite evidences before the revenue authorities but that did not considered the same which is unjustified.

4.

On the other hand, Ld. Sr. DR relied upon the orders of the revenue authorities.

5.

I have heard the rival submissions, perused the materials available on records. I find that the assessee before the revenue authorities submitted copy of service tax registration relating to Coaching Institute. The assessee also submitted that his wife is a taxpayer having source of income from Coaching Institute, rental income and bank interest and regularly files income tax return.

Copy of ITR, Balance sheet and profit and loss account was also filed. The assessee also explained that rental income of the assessee and his wife is deposited in this saving account and his wife is at liberty to withdraw or deposit from her bank as per her requirement. On consideration of these facts and circumstances, I, am of the view, that it is wrong to assume that the assessee is sole owner of funds in the said bank account. The evidences as narrated above clearly establish that Rs.1,00,000/- related to her

4 SMC – Rajesh Jain of 2019 wife but the revenue authorities failed to consider the same.

Therefore, I direct the AO to delete the addition of Rs.1,00,000/-.

6.

In result, appeal filed by the assessee is allowed.

Order was pronounced in the open court on 03.06.2020.

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