SRI SAMIRAN MITRA,BURDWAN vs. ITO, WARD - 1(4), DURGAPUR, DURGAPUR

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ITA 1979/KOL/2017Status: DisposedITAT Kolkata03 January 2018AY 2011-124 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the assessee's wife had declared the interest income and KVP proceeds in her return of income, the addition to the assessee's income was not justified. The same logic applied to the recurring deposit interest.

What were the facts?

The assessee, a salaried employee, had joint bank accounts with his wife. Interest income and KVP maturity proceeds credited to these accounts were added to his income by the AO, who was upheld by the CIT(A). The assessee argued that his wife had offered this income in her return.

What were the issues?

Whether interest income and KVP proceeds from joint accounts, offered by the wife in her return, can be taxed in the hands of the assessee. Whether interest on recurring deposits can be taxed in the present assessment year in the hands of the assessee.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH : KOLKATA

Before: Hon’ble Sri N.V.Vasudevan, JM

Sri Samiran Mitra -vs.- I.T.O., Ward-1(4) Burdwan Durgapur [PAN : ADDPM 5908 P] (Respondent) (Appellant) For the Appellant : Shri P.K.Roy, Advocate For the Respondent : Shri Robin Choudhury, Addl. CIT Date of Hearing : 13.12.2017. Date of Pronouncement : 03.01.2018. ORDER

This is an appeal by the assessee against the order dated 22.06.2017 of CIT(A)- Durgapur relating to A.Y.2011-12.

2.

The Assessee is an individual. He is a salaried employee of Durgapur Thermal Power Station. His source of income is under the head ‘ Salary’ .

3.

The assessee had two bank accounts. One with United Bank of India, Maya Bazar Branch and another with Axis Bank, Durgapur Branch. In these accounts which is in the said joint names of the assessee and his wife Smt. Anjana Mitra a sum of Rs.4,150/- was credited towards interest. Since this was not shown in the income tax return the same was added to the total income of the assessee by the AO. The assessee had pleaded that it was the joint account in the name of the assessee and his wife and that his wife had offered to tax the interest income in her return of income. This plea was ignored by the AO on the ground that the assessee was the first holder and therefore interest income in question is liable to be added to his total income.

Shri Samiran Mitra A.Yr.2011-12 4. On appeal by the assessee the CIT(A) confirmed the order of AO.

5.

I have heard the rival submissions. I find that assessee’s wife Smt.Anjana Mitra had filed her return of income for A.Y.2011-12 offering interest income in question. Copy of the return of income filed by Smt. Anjana .Mitra under PAN No.AQKPM 0859 P on 30.03.2013 along with computation of income declaring income from interest of Rs.58,694/- was filed before me in this regard. In these circumstances the addition made in the hands of the assessee was not justified and the same is directed to be deleted.

6.

The AO also found that there were investments in KVP and interest on KVP of Rs.13,970/- had been credited in the joint bank account of the assessee and his wife. Besides the above there was also an entry of receipt of maturity proceeds of KVP of Rs.1,02,916/-. It was the plea of the assessee that the interest income as well as maturity proceeds of KVP belong to the wife of the assessee and the interest income was declared by her in her return of income filed. This plea of the assessee was disregarded by the AO as well as CIT(A).

7.

After hearing the rival submissions I find that in the computation of total income in the return of income filed by the wife of the assessee interest on KVP is also included. In these circumstances the interest on KVP as well as the ownership of KVP cannot be attributed to the assessee. The addition is therefore directed to be deleted.

8.

The AO also found that the assessee had recurring deposit account in which there was accrual interest income of Rs.2,380/-. According to the AO the assessee had not accounted for the aforesaid interest income. The same was brought to tax by the AO. On appeal the CIT(A) confirmed the action of the AO.

Shri Samiran Mitra A.Yr.2011-12 9. It is the plea of the assessee that interest on recurring deposit is shown only at the time of maturity and further the recurring deposit was also in the joint names of the assessee and his wife. I am of the view that in the given circumstances the interest on recurring deposit cannot be brought to tax in the present assessment year and also wholly in the hands of the assessee. The addition is therefore directed to be deleted.

10.

In the result the appeal by the assessee is allowed.

Order pronounced in the Court 03.01.2018.

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