2015 (6) TMI 1184 - AT - Income Tax

Unexplained credits - Unexplained investment - Addition u/s 69B - search and seizure action u/s 132 (1) - Addition made on protective basis - case of the assessee, who was the daughter of the sister of Chandbibi Zaidi was centralized. A bank account in the joint name of Ms. Ravish Zaidi and Chandbibi Zaidi was with Nova Scotia Bank, Nariman point Branch, Mumbai, was found - HELD THAT - The assessee filed confirmation from Mumbai Majdoor Sabha for Ms Ravish Zaidi s Accounts, along with balance-sheet as on 31/12/2001, confirmation of copy of account of Ms. Chandbibi, letter of gift from Ms. Chandbibi, copy of balance sheet and capital account of Ms. Chandbibi as on 31/03/2002, copy of acknowledgement of return, bank statement of Mumbai Majdoor Sabha for repayment of loan in May 2004 (₹ 10 lakhs) and the investment made, appearing in the balance sheet, as on 31/03/2002. All these documents were forwarded to the Assessing Officer for his comments and the ACIT vide letter dated 31/11/2013, through Ad CIT sent the remand report that too after verification of bank accounts. In the remand report, the Assessing Officer found no unexplained cash credits. In the remand report submitted by the assessing officer ACIT Central Circle-43, Mumbai through Additional CIT Central Range 6, Mumbai, the credits in the bank accounts were verified and it was submitted that no unexplained credits were found. Hence the addition made of ₹ 20,00,000/- in AY 2005-06 and ₹ 5,80,000/- for AY 2006-07 are deleted. The ground of appeal no. 1 is to this extent allowed. In view of the submission of the assessee and remand report by the AO, the impugned addition was deleted by the CIT (Appeals). No contrary evidence was produced by the Revenue in support of the ground raised, therefore, find no infirmity in the conclusion drawn by CIT (Appeals). It is upheld.

Summary

Issues:
1. Addition made on protective basis in the hands of the assessee regarding amount deposited in joint bank account.
2. Interpretation of remand report of the Assessing Officer.

Analysis:
1. The case involved an appeal by the Revenue against the order of the ld. First Appellate Authority regarding the deletion of an addition made on a protective basis in the hands of the assessee. The dispute arose from deposits in a joint bank account with Ms. Chandbibi Zaidi. The Revenue contended that the deletion was erroneous as the assessee, a student studying abroad, had no independent income source. The Assessing Officer had added the amount as unexplained investment under section 69B of the Income Tax Act, 1961. However, the ld. Commissioner of Income Tax (Appeals) deleted the addition based on the assessee's submissions and the remand report by the Assessing Officer, which found no unexplained cash credits in the bank accounts. The Tribunal upheld the deletion, noting the absence of contrary evidence from the Revenue.

2. The key issue regarding the interpretation of the remand report of the Assessing Officer was crucial in this case. The remand report, submitted through Additional CIT Central Range 6, Mumbai, verified the credits in the bank accounts and confirmed the absence of unexplained credits. This report played a significant role in the decision to delete the addition made by the ld. Commissioner of Income Tax (Appeals). The Tribunal considered the contents of the remand report, along with the submissions of the assessee, in upholding the deletion of the addition. The lack of contradictory evidence from the Revenue further supported the reliance on the remand report's findings. Ultimately, the Tribunal dismissed the Revenue's appeal based on the conclusions drawn from the remand report and the assessee's submissions.

In conclusion, the judgment by the Appellate Tribunal ITAT Mumbai addressed the issues of addition made on a protective basis in the assessee's hands and the interpretation of the remand report of the Assessing Officer. The decision favored the assessee based on the lack of unexplained cash credits found in the bank accounts, as confirmed by the remand report. The Tribunal upheld the deletion of the addition, emphasizing the absence of contradictory evidence from the Revenue.