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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-3’, NEW DELHI
Before: SH. N. K. SAINI
This is an appeal filed by the assessee against the order dated 17/03/2015 passed by CIT (A)-XIII, New Delhi.
Following grounds have been raised in this appeal:-
“1. That the assessment order passed u/s 143(3) and the additions made are illegal, bad in law and without jurisdiction.
2. That the addition/disallowance made are unjust, arbitrary and are not based on any material on record. The total
income of the Appellant has been wrongly and illegally assessed at Rs. 25,84,470/- as against income declared at Rs. 7,81,470/-
That the Appellant Prays that the Addition of Rs. 18,03,000/- made by the AO and confirmed by CIT(Appeal) under the head ‘Undisclosed Income’ is illegal, unjust and bad in law. The addition cannot be justified by any material on record.
That the additions made and the observations made are unjust, unlawful and based on mere surmises and conjunctures. The additions made cannot be justified by any material on record.
5. That the explanation given evidence produced, material placed and available on record has not been properly considered and judicially interpreted and the same do not justify the additions/ allowances made.
6. That without Prejudice and in the alternative addition cannot be made of the total amount in the hand of the appellant when admittedly there are three Joint holder of the account The addition made is unlawful and is highly excessive.
7. That the interest u/s 234B and 234C has been wrongly and illegally charged and is wrongly worked out. 8. That the appellant craves leave to add, amend, alter and or modify the grounds of appeal of the said appeal.”
3. The only grievance of the assessee in this appeal relates to the confirmation of addition of Rs.18,03,000/- made by the A.O. The facts of the case in brief are that the assessee filed the return of income on 30/3/2011 declaring an income of Rs.7,81,470/- which was processed u/s 143 (1) of the Income-tax Act, 1961(hereinafter referred to as the Act) . Later on, the case was selected for scrutiny. The A.O during the course of assessment proceedings observed that in this case information was received with respect to cash deposits of Rs.1,01,03,000/- in the joint bank account maintained with Karur Vysya Bank Ltd., Noida Branch in which the assessee was the third Joint holder and the account was opened under the scheme of former or survivor. The A.O made the addition of Rs.18,03,000/- by observing as under:-
“Summons u/s 131 of the IT Act were issued on 8/3/2013 to assessee and her husband Sh. Manoj Srivastava and their statements were recorded on 15/3/2013. Sh. Manoj Srivastava in his statement inter alia stated that he was operating the account no. 6910 through his late father in law and that out of cash deposit of Rs.1,01,03,000/-, he had deposited cash to the tune of Rs.60 lakh in the account which he has already surrendered before the ACIT, Central Circle, Noida during assessment proceedings for Assessment Year 2010-11 and produced a copy of assessment order 30/12/2011 u/s 153A/143(3) of the I.T Act. The assessee in her statement showed ignorance of financial transaction of the account on the ground that she was not operating the account and was merely a third joint holder. Further, she confirmed surrender of Rs. 60 lakh before the I.T Department by her husband and offered her explanation in respect of the remaining cash deposit of Rs.41,03,000/- along with documentary evidences out of the amount of R.41.03 lacs an amount of Rs.7 lacs each has been received by the assessee and her father Lt. Sh. Gopal Krishan in cash as per copy of agreements submitted which has been deposited in the bank account and Rs. 9 lacs has been stated to be deposited out of cash withdrawn from the same bank account. On detailed examination of the facts and records, it is seen that a sum of Rs.18,03,000/- remains unexplained and lacks any documentary substantiation. Hence, the same is hereby added back to the income of the assessee as income from undisclosed sources.”
4. Being aggrieved the assessee carried the matter to the Ld.CIT(A) and furnished the written submissions which has been incorporated in para 4.2 of the impugned order for the cost of repetition, the same is not reproduced herein. The Ld.CIT(A), however, confirmed the addition by observing in Para 4.3 of the impugned order as under:-
4.3. “The reason given by A.O and the submission of the appellant are considered. The saving account was operated by appellant’s husband and father. The appellant was the owner of the account under the scheme of former or survivor. After the death of her father, she became the owner of the account as she was the survivor. Half the cash deposited is agreed by the other holder of the account as unaccounted income and thus by all means the other half is also unaccounted income that should be taxed in the hands of the appellant. It is not a case of legal heir as was very much a part of the savings bank account where the cash was deposited and pleading ignorance will not absolve her from the legal implications. The fact regarding deposit of unaccounted income is established by taxation of Rs. 60 lakh in the case of other joint operator. After the death of her father, the appellant became the operator of the account. In view of this, the addition made is confirmed and the grounds of appeal are dismissed.”
Now, the assessee is in appeal.
The Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the joint account was in the name of the assessee, her husband and her father which was opened under the scheme former or survivor. It was stated that the assessee’s name was third and other two joint holders were her late father as first holder and her husband as second holder. It was further stated that after the death of the assessee her husband became first holder, therefore, the addition if any, was to be made in the hands of the first holder of the joint account and not in the hands of the assessee.
In his rival submissions, the Ld. Dr strongly supported the impugned order and reiterated the observations made by the Ld.CIT(A) in Para 4.3 of the impugned order. 8. I have considered the submissions of both the parties and carefully gone through the material available on the record in the present case, it is an admitted fact that the joint bank account was opened under the scheme of former or survivor. The first holder of the joint bank account was deceased father of the assessee, second holder was her husband and the assessee was the third holder. As such, after the death of her father, the husband of the assessee became former in the joint bank account and the name of the assessee was appearing after the name of her husband. Therefore, after considering the totality of the facts, I am of the view that the addition if any was to be made on account of cash deposits in the bank account, was required to be made in the hands of the former holder of the bank account and not the later. In the present case, husband of the assessee was the former and the assessee was the later. Therefore, the addition made in the hands of the assessee was not justified particularly when nothing was brought on record to substantiate the amount was deposited by the assessee and not by her husband. It is also relevant to point out that the A.O himself mentioned in the assessment order that the assessee was not having the capacity to operate the account because she was third joint holder and the account was opened under the scheme of former or survivor. Accordingly, the addition made by the A.O and sustained by the Ld.CIT(A) is deleted. 9. In the result, the appeal of the assessee is allowed.
(Order Pronounced in the Court on 08/11/2016)