ALPA KHERAJ BHANUSHALI,MUMBAI vs. ITO 18(1)(3), MUMBAI

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ITA 3761/MUM/2013Status: DisposedITAT Mumbai10 January 2017AY 2008-093 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee did not discharge the onus of explaining the nature and source of the cash credits. The order of the CIT(A) was set aside, and the matter was restored to the AO for fresh assessment.

What were the facts?

The Assessing Officer (AO) added Rs. 14,69,400/- to the assessee's income as unexplained cash credits in a joint bank account. The assessee claimed the account belonged to her mother, but failed to provide sufficient documentation to support this.

What were the issues?

Whether the assessee discharged the onus to explain the nature and source of cash credits in a joint bank account, and whether the AO should have verified the transactions with the primary account holder.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, MUMBAI BENCHES “A” MUMBAI

Before: SHRI MAHAVIR SINGH & SHRI N.K. PRADHAN

For Appellant: Mr. Paras S Savla, &, Ms. Keerthiga Sharma, AR
For Respondent: Mr. B.S. Bist,DR
Hearing: 10/01/2017Pronounced: 10/01/2017

ORDER

PER N.K. PRADHAN, AM

1.

This is an appeal filed by the assessee. The relevant assessment year 2008-09. The appeal is directed against the order of the Commissioner (Appeals) – 16, Mumbai and arises out of the order under section 143(3) of the Income Tax Act, 1961 (the “Act’’).

2.

The sole ground raised

by the assessee in this appeal is that the learned CIT(A) erred in upholding the addition of Rs. 14,69,400/- made by the Assessing Office (AO) u/s 68 of the Act.

3. In a nutshell, the facts are that during the course of assessment proceedings, the AO asked the assessee to file details in respect of cash deposits as reported in the AIR information. In response to it, the assessee filed a copy of the bank statement of account in Centurion Bank, jointly held by the assessee with her mother Smt. Shantaben Kheraj. It was contended that the 1st name in the bank account was of her mother and transactions pertained to her mother and were accounted for in the mother’s books of account. That the assessee did not have any beneficial interest in the said account. The AO came to a finding that the assessee had not offered any explanation about the nature and source of the cash deposits and the mere filing a copy of acknowledgement of return of her mother would not establish that the said transactions belong to her mother and were reflected in her books of accounts. Therefore, the AO treated the amount of Rs. 14,69,400/- as unexplained credits and added to the total income of the assessee.

4.

The assessee preferred an appeal before the learned CIT(A). We find that the learned CIT(A) has concluded that the acknowledgement of the assessee’s mother’s return of income shows total income of Rs. 1,38,351/- claiming refund of Rs. 1,236/-. No balance sheet or other documents relating to the mother’s return were filed even to indicate that the bank account has been disclosed in the mother’s return, let alone the source of deposits in the said bank account. The learned CIT(A) has also observed that the burden of the assessee to discharge the onus of explaining the nature and source of deposits in her bank account (even if it is joint account) remains unrebutted. Therefore, the learned CIT(A) dismissed the appeal filed by the assessee.

5.

Before us, the learned counsel of the assessee submits that all the deposits and withdrawals pertain to the mother of the assessee and the name of the assessee is included as joint account holder only for the sake of operational convenience. It is stated that the AO should have verified the above facts from the first holder of the bank account before making addition of Rs. 14,69,400/- u/s 68 in the hands of the assessee.

6.

The learned DR submits that the acknowledgement of the return of income of the assessee’s mother shows total income at Rs. 1,38,351/- claiming refund of Rs. 1,263/-. No balance sheet or other documents relating to the mother’s return of income were filed to indicate that even the bank account has been disclosed in the mother’s return of income.

7.

We have heard the rival submissions and perused the relevant material on record. It is the claim of the assessee that all the deposits and withdrawals pertain to her mother and the name of the assessee is included as joint account holder only for the sake of operational convenience. We find that no balance sheet or other documents were filed along with the return of income of the assessee’s mother to indicate that the said bank account has been disclosed in the mother’s return of income. The Hon'ble Supreme Court has laid down in Kalekhan Mohammed Hanif vs. CIT 50 ITR 1 (SC) that the onus is on the assessee to explain the nature and source of cash credits, whether they stand in the assessee’s account or in the account of a third party. In view of the above, we set aside the order of the learned CIT(A) and restore the matter to the file of the A.O. to make a fresh assessment as per the provisions of the Act after giving reasonable opportunity of being heard to the assessee. The assessee is directed to file before the AO relevant documents explaining the nature and source of Rs. 14,69,400/-.

8.

In the result, the appeal is allowed for statistical purposes.

Order pronounced in the open court on 10/01/2017

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