The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that Income Tax Addition for Cash deposits is not valid when certificates from the Bank denies the existence of Bank accounts.
YaminibenSandkumar Bhatt, the assessee stated that primary pleadings and argumentsagainst the additions made were thatit tantamounted to duplicate addition since cash deposited related to only one bank account,each in HDFC Bank and Dena Bank, jointly held in the names of both the assessees, while the Revenue had held that there were separate bank accounts about which addition of cash found deposited had been made in the hands of both the assessee.
It was pointed out that the assessee’s reassessment proceedings, u/s 147 of the Act, for the impugned year were initiated after almost a gap of six years, for the reason that cash was found deposited in the bank accounts which were in the joint names of both the assessees.
The CIT(A) found that there existed two separate sets of joint bank accounts of the assesses in HDFC Bank and Dena Bank, based on which separate additions of cash deposits of Rs31,90,000/- and Rs.26,90,000/- have been made in the hands of both the assesses, cannot be said to be conclusively established and found. The CIT(A) simply dismissed this contention of the assessee stating that copies of the other alleged bank accounts had been obtained from the banks by the Revenue u/s 133(6) of the Act.
The ITAT bench of Smt.Annapurna Gupta, accountant member and Smt.SuchitraKamble, judicial member analysed the certificates submitted by the assessee which were issued by both the banks disclaiming the existence of Bank accounts that the Revenue had alleged belonged to the assesses. The assessee has produced certificates from the Bankdenying the existence of any such Bank accounts.
It was observed that the revenue failed to appreciate that the assessee has explained the source of cash deposited in their bank accounts, as has been related to the money which they had earlier lent to friends and relatives in India by transferring to them through Western Union and had substantiated the explanation by producing documents evidencing the transfer of money by the assessees through Western Union.
The ITAT restored both cases to the AO to first establishthe basic issue of the existence of actual bank accounts of the assessesand thereafter proceed to determine the issue of cash deposits whether explained or not, bythe law. The appeals of the assessees are allowed forstatistical purposes.
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