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Facts
The assessee's assessment was reopened under Section 147 based on AIR information regarding cash deposits of Rs.17,53,000/- in a joint savings bank account. The Assessing Officer added Rs.14,28,000/- as unexplained income under Section 69, which was confirmed by the first appellate authority. The assessee contended the deposit was made by his father, who was the sole account holder at the time.
Held
The Tribunal found that the assessee's father was the sole account holder when the Rs.14,28,000/- cash deposit was made, and the assessee became a joint holder only one day later. Since no addition was made in the father's assessment for this deposit, the Tribunal deleted the addition of Rs.14,20,000/- for cash deposit and Rs.1,31,691/- for accrued interest in the assessee's hands.
Key Issues
Whether additions for cash deposits and related interest can be made in the hands of a joint account holder who became such only after the deposit, especially when the primary depositor (father) was not assessed for it.
Sections Cited
147, 69, 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI
Before: SHRI SAKTIJIT DEY, VICE- & SHRI NAVEEN CHANDRA
PER SAKTIJIT DEY, VICE-PRESIDENT
This is an appeal by the assessee against order dated 20.04.2023 passed by National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2012-13.
In ground no.1, the assessee has raised the issue of validity of reopening of assessment under section 147 of the Income-tax
ITA No.1546/Del/2023 AY: 2012-13 Act, 1961 (in short ‘the Act’). Whereas, ground nos. 2, 3, 4 and 5 are on merits and co-related.
At the outset, we deem it appropriate to decide the grounds raised on merits and, if warranted, the legal issue raised by the assessee will be taken up at a later stage.
Insofar as the issues on merits are concerned, they relate to addition of an amount of Rs.14,28,000/-, being cash deposit made in the savings bank accounts and further the addition of Rs.1,31,691/- being interest accrued on such account.
Briefly the facts are, the assessee is a resident individual.
Based on AIR information available on record, the Assessing Officer found that in the year under consideration, there were cash deposits of Rs.17,53,000/- in a saving bank account jointly held by the assessee with his father Late Rampal Singh. Since, the assessee had not filed any return of income offering such income, the Assessing Officer formed a belief that income chargeable to tax has escaped assessment. Hence, he reopened the assessment under section 147 of the Act. In course of assessment proceedings, the assessee explained before the Assessing Officer that the account was jointly held with his father
ITA No.1546/Del/2023 AY: 2012-13 and the deposit has been made by his father. Therefore, no addition can be made at the hands of the assessee. The Assessing Officer, however, did not accept the submission of the assessee and proceeded to add an amount of Rs.14,28,000/-, being cash deposit made on 06.07.2011 as unexplained income under section 69 of the Act to the income of the assessee. The addition so made was confirmed by the first appellate authority.
We have considered rival submissions and perused the materials on record. From the documents placed in the paper- book, it is observed that assessee’s father Late Rampal Singh was holding savings bank account no. 1391816989 with Central Bank of India and another saving bank account with State Bank of India in his individual capacity. In the said bank account, assessee’s father had deposited sale proceeds of certain immovable assets sold during the year as well as cash deposits amounting to Rs.17,53,000/-. Out of which, cash deposit of Rs.14,28,000/- was made on 06.07.2011. However, evidences brought on record in the form of certificate issued by the bank authorities both at the request of the assessee and in response to the notices issued under section 133(6) of the Act, clearly reveal
ITA No.1546/Del/2023 AY: 2012-13 that assessee’s name was added as a joint account holder on 07.07.2011, which is one day after the cash deposit of Rs.14,28,000/- was made in the bank account.
Pertinently, for the very same assessment year, assessment in case of assessee’s father Late Rampal Singh was reopened under section 147 of the Act. Though, the savings bank account in question was available before the Assessing Officer, however, no addition on account of cash deposit was made. Thus, when no addition has been made at the hands of assessee’s father, who was the sole holder of the concerned saving bank account on the date of cash deposit, such cash deposit cannot be added at the hands of the assessee, who became joint holder after the cash deposit was made.
In view of the aforesaid, we delete the addition of Rs.14,20,000/- on account of alleged cash deposit and the interest income of Rs.1,31,691/- accruing in the subject bank account. Ground nos. 2, 3 and 4 are allowed.
In view of our decision above on merits, ground no. 1 has become academic. Hence, there is no need for adjudication.
ITA No.1546/Del/2023 AY: 2012-13
Ground no. 5, being consequential and ground no. 7 being general, are dismissed.
In the result, appeal is allowed, as indicate above.
Order pronounced in the open court on 11th June, 2024