Case Law Details
Shri Rajesh Jain Vs ITO (ITAT Indore)
The issue under consideration is whether the addition made by AO under section 68 in respect of the deposit of business of wife in their joint bank account is justified in law?
In the present case, the assessee maintains a joint bank account with his wife to deposit the rental income of the assessee and his wife. During the year he deposited business income of wife in that account. The Assessing Officer treated the deposit of cash in Vijaya Bank Account, as undisclosed income under section 68 of the Income Tax Act, 1961.
ITAT states that, the assessee submitted copy of service tax registration relating to Coaching Institute. The assessee also submitted that his wife is a taxpayer having source of income from Coaching Institute, rental income and bank interest and regularly files income tax return. Copy of ITR, Balance sheet and profit and loss account was also filed. The assessee also explained that rental income of the assessee and his wife is deposited in this saving account and his wife is at liberty to withdraw or deposit from her bank as per her requirement. On consideration of these facts and circumstances, ITAT states that it is wrong to assume that the assessee is sole owner of funds in the said bank account. Therefore, ITAT direct the AO to delete the addition made u/s 68. Hence, appeal filed by the assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal is filed by the assessee against the order of ld. CIT(A)-1, Bhopal dated 26.03.2019 pertaining to Assessment year 2013-14. The assessee has raised following grounds of appeal:
1.“That the Ld. lower authorities have erred in not appreciating the fact that the cash deposit in joint bank account was part of assessee’s wife’s business receipts, even when documentary evidences were produced and explained.
2. That the appellant craves leave to add or alter any of the grounds of appeal on or before the final hearing if necessary so arises at the time of hearing.”
2. Facts in brief are that the AO considered deposit of cash in Vijaya Bank Account, as undisclosed income u/s 68 of the Act. The assessee submitted before the AO that the said bank account is a joint account of the assessee with his wife and his wife runs a Coaching Institute and as a proof of business the assessee submitted copy of service tax registration. The assessee also submitted that his wife is a taxpayer having source of income from Coaching Institute, rental income and bank interest and regularly files income tax return. Copy of ITR, Balance sheet and profit and loss account was also enclosed. The rental income of the assessee and his wife is deposited in this saving account and his wife is at liberty to withdraw or deposit from her bank as per her requirement. Therefore, it is wrong to assume that the assessee is sole owner of funds in the said bank account. But the AO did not agree with the submission of the assessee and made the addition of Rs.1,00,000/-. Against this the assessee approached the Ld. CIT(A) who also confirmed the addition. Still aggrieved the assessee is before this Tribunal.
3. Ld. counsel for the assessee submitted that the cash does not relate to the assessee but relates to his wife who was co-owner in the said bank account being a joint account of the assessee with his wife and his wife runs a Coaching Institute and as a proof of business, the assessee filed the requisite evidences before the revenue authorities but that did not considered the same which is unjustified.
4. On the other hand, Ld. Sr. DR relied upon the orders of the revenue authorities.
5. I have heard the rival submissions, perused the materials available on records. I find that the assessee before the revenue authorities submitted copy of service tax registration relating to Coaching Institute. The assessee also submitted that his wife is a taxpayer having source of income from Coaching Institute, rental income and bank interest and regularly files income tax return. Copy of ITR, Balance sheet and profit and loss account was also filed. The assessee also explained that rental income of the assessee and his wife is deposited in this saving account and his wife is at liberty to withdraw or deposit from her bank as per her requirement. On consideration of these facts and circumstances, I, am of the view, that it is wrong to assume that the assessee is sole owner of funds in the said bank account. The evidences as narrated above clearly establish that Rs.1,00,000/- related to her wife but the revenue authorities failed to consider the same.
Therefore, I direct the AO to delete the addition of Rs.1,00,000/-.
6. In result, appeal filed by the assessee is allowed.
Order was pronounced in the open court on 03.06.2020.
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