The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has upheld an addition in respect of cash deposited in joint bank account by assessee with his accountant by holding that it was created to cover up unaccounted transactions of the assessee.
In the instant case, the assessee opened a bank account with his Accountant who used to file income tax returns of the assessee was providing professional advice to him. The assessing officer made an addition of Rs.10,32,000/- being unexplained cash deposits in the bank account.
On first appeal, the CIT (A) upheld the assessment order pointing out that normally joint bank account are opened between the relatives or close friends. But here is the case where the assessee has opened a bank account with the professional who was authorised representative of the assessee.
On second appeal, the Tribunal said that “It is unbelievable that a professional like Advocate, C.A. or Accountant, would open a bank account with his client. The Ld. D.R. rightly contended that any professional would open a bank account for an assessee if unaccounted transactions are conducted on behalf of the assessee.”
Refusing to grant relief to assessee, the bench held that “There is no reason why a professional will provide his own money and operate bank account with the assessee. If there was money of Shri Mahesh Sharma, he could have given confirmation or would have appear before A.O. for recording his statement. However, he did not support the case of the assessee and did not appear before A.O. for recording his statement. The explanation of assessee is clearly an afterthought.”
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