INCOME TAX OFFICER, CHENNAI vs. SANKARAN NIRMALA, CHENNAI

The main grievance of the Revenue is against deletion by Ld. CIT(A) of addition of Rs 3,43,46,812/- made by the A.O u/s. 69 of the Act of the increase in peak balance in foreign bank account in Citibank Singapore Ltd. of which assessee is an authorized signatory.

The brief facts of the case are that the assessee is a salaried employee and is signing authority of account No.0408126029 of Sankhyaa Ltd. in City Bank Singapore Ltd. The Ld. A.O, on the basis of information that the assesse in the FA schedule of IT return filled has shown herself as the signing authority of bank account 0408126029 in Citibank Singapore Ltd. of Sankhyaa Ltd. made addition of peak balance in the account. The Ld. AO has made the addition stating that assessee has not proved the genuineness of the transaction, nature and source of income in bank account in which she was signing authority with documentary evidence. The Ld. CIT(A) has deleted the addition held as under:

“5.3 In the letter, it is mentioned that Ms Nirmala Sankaran is an Authorized Signatory and interest income of Rs. 13,739/- accrued in these accounts is not taxable in her hands. The assessee was asked to provide the complete bank statements in which she was signing authority during the F.Y. 2017-18. As per schedule FA, the assessee is signing authority for bank account of Sankhyaa Ltd having account no. 0408126029 in Citlbank Singapore Limited. From the submission, it is observed that assessee has submitted bank statement bearing only "Checking : xXXXXx6029" without having the name of account holder or signing authority or account number. Further, the letter from Sankhyaa Ltd only mentioned that interest accrued in the afore mentioned accounts was wholly the income of the company and not the income of Ms Nirmala Sankaran. The onus is on the assessee to :- 3 -: prove the genuineness of the transaction, nature and source of income in bank accounts in which she was signing authority with documentary evidence. The assessee has only furnished the details for increase in peak balance with comparison to previous year without bank statement. Hence, the assessee has not offered explanation about the nature and source for increase in peak balance with Comparison to previous year in foreign bank account no. 0408126029 in Citibank Singapore Limited. In view of the above, Rs. 3,43,46,812/- has remained unexplained and added back to the total income of the assessee under the head income from other sources u/s. 69 of the I.T. Act, 1961. Penalty proceeding is initiated separately u/s. 271AAC of the 1.T. Act, 1961 on this issue.”

The Ld. D.R relied upon the orders of A.O and argued that the assessee has not discharged complete onus and therefore, addition should be confirmed.

The Ld. A.R supported the order of Ld. CIT(A) and argued that the assessee is only signing authority and the bank account is in the name of company, which has been duly disclosed in the hands of company. Therefore, the Revenue’s appeal should be dismissed.

We have heard the rival contentions, perused the materials available on record. Admittedly, the assessee is only a signing authority of foreign account and not owner of the account. The assessee has submitted a copy of letter from the company M/s.

In the result, the appeal filed by the Revenue is dismissed.