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Income Tax Appellate Tribunal, ‘C’ BENCH, BENGALURU
Before: SHRI SUNIL KUMAR YADAV & SHRI INTURI RAMA RAOSmt. Sejal Sharamik Masturlal,
Date of hearing : 28/11/2017 Date of pronouncement : 09/02/2018 O R D E R
Per INTURI RAMA RAO, AM :
This is an appeal filed by the assessee directed against the order of the ld. Commissioner of Income-tax(Appeals)-12, Bangalore,[CIT(A)] dated 14/03/2016 for the assessment year 2008-09.
The assessee raised the following grounds of appeal:
3. Briefly, the facts of the case are that the assessee is an individual, deriving income from ‘other sources’. The return of income for the assessment year 2008-09 was filed on 14/11/2008 declaring total income of Rs.1,88,530/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward 14(2), Bangalore, vide order dated 30-12-2010 passed under section 143(3) of the Income-tax Act,1961 [hereinafter referred to as ‘the Act’] at total income Rs.16,62,912/- . While doing so, the Assessing Officer made addition of Rs.11,50,000/- as unexplained investment in the following mutual funds:
Page 3 of 5 The Assessing Officer also made addition on account of short term capital gain up of Rs.2,24,384/-. The facts set out by the Assessing Officer are as under:
Being aggrieved by the above addition, an appeal was preferred before the ld.CIT(A) who, vide impugned order, confirmed the action of the assessing officer.
Being aggrieved, the assessee is in appeal before us. It is contended that the investments are made by the assessee’s son from the bank account jointly held by assessee with her son Rushab Masturlal. All
Page 4 of 5 these investments are duly reflected in the bank account statement. Therefore, question of treating the investment as unexplained investment does not arise. In this connection, the learned counsel for the assessee drawn our attention to the statement of account held with Citibank placed at page 5 of the paper book.
5.1 As regards addition under capital gains, it is submitted that the assessee was holding joint account along with her mother Smt.Anupam Shah with IDBI Bank, Sarakki Branch, Bangalore. This joint account was opened only for operational convenience. It is stated that the assessee’s mother had made short term capital gain of Rs.2,24,384/- on redemption of DSP Merrill Lynch Mutual Fund and gains made are credited to joint account and the gains, if any, are taxable only in his mother’s hands and not in the appellant’s hands.
5.2 On the other hand, the learned departmental representative placed reliance on the orders of the lower authorities.
We heard rival submissions and perused the material on record. The first issue in the grounds of appeal relates to the addition of Rs.11,50,000/- as unexplained investment in mutual funds. It is undisputed fact that these investments are made out of funds available in the City bank jointly held by the assessee, with her son and her husband. From the mere perusal of the statement of bank account, it is clear that investments in mutual funds had been made out of this bank account. Thus, the source of investments is manifest from the perusal of statement of account. The question, from whose source of income
Page 5 of 5 investments are made is irrelevant, as the addition can be made in case source remained unexplained. Since in the present case, source of funds have been duly explained, the question of addition does not arise. Therefore, the addition made by the Assessing Officer is deleted. As regards the addition of Rs.2,24,384/- on account of short term capital gain credited to the joint deposit account maintained with IDBI Bank, Sarakki Branch, Bengaluru, onus lies on the revenue to prove that the source of investment in DSP Merrill Lynch Mutual Fund has gone from income source of the appellant. The revenue had not discharged onus that lie upon it. In the circumstances we are unable to uphold the addition of Rs.2,24,384/-, we hereby delete the addition.
In the result, appeal filed by the assessee is allowed.