2017 (7) TMI 1386 - AT - Income Tax

Addition on account of cash deposits in the savings bank account - HELD THAT - In the instant case Sale deed was registered with all the terms and conditions of sale which is a conclusive proof of sale consideration and no other evidence was provided by the Ld. A.R. explaining the source for the remaining amount of 12.90.lacs. In the assessee s case assessee did not explain the source for sum credited in his bank account. Therefore we hold that the CIT(A) has rightly directed the A.O to tax the amount as unexplained cash deposit and accordingly we dismiss Ground Nos. 1 and 3 of the assessee. Assessment of income in the hands of the assessee instead of his wife - HELD THAT - Both the purchase and sale documents clearly show that the property was acquired by Smt Vanaja wife of the assessee on 17-09-2008 and the same was sold by her on 14-10-2009. The Ld. AR submitted that the property was acquired from the source of Smt Vanaja but not of the assessee. DR did not controvert the above facts. The Ld. DR also did not place any evidence regarding the beneficial ownership to make assessement in the hands of the assessee. Therefore we hold that the capital gains if any should be assessed in the hands of the owner of the property i.e Smt Vanaja but not in the hands of the assessee. Accordingly we delete the enhancement made by the Ld. CIT(A) and the ground no.2 raised by the assessee is allowed.

Summary

Issues: Assessment of cash deposits in savings bank account, assessment of short term capital gains, ownership of property for tax assessment.

Assessment of Cash Deposits:
The appeal was filed against the CIT(A)'s order for the assessment year 2010-2011 regarding cash deposits of ?33,13,500 in the assessee's savings bank account. The AO treated the entire cash deposits as unexplained due to no response from the assessee during scrutiny. The CIT(A) allowed credit for ?20,23,500 as receipts from the sale of the assessee's wife's property and directed the AO to assess the balance amount of ?12.90 lakhs as unexplained cash deposits. The assessee argued that the entire deposits were from the sale of his wife's property, providing the sale deed and an affidavit. The DR contended that the deposits should be explained by the assessee and not the wife, as they were in the assessee's bank account. The ITAT upheld the CIT(A)'s decision, accepting the source of ?20.23 lakhs but assessing the remaining ?12.90 lakhs as unexplained cash deposits.

Assessment of Short Term Capital Gains:
The CIT(A) directed the AO to assess short term capital gains of ?11,17,500 in the hands of the assessee, which was appealed. The property was bought by the assessee's wife and sold, with only the sale proceeds deposited in the assessee's account. The ITAT ruled that the capital gains, if any, should be assessed in the wife's hands, not the assessee's, as evidenced by the purchase and sale documents. The enhancement made by the CIT(A) was deleted, and the appeal on this ground was allowed.

Ownership of Property for Tax Assessment:
The property in question was acquired and sold by the assessee's wife, with the AR arguing that the capital gains should be assessed in her hands, not the assessee's. The ITAT noted that the purchase and sale documents clearly showed ownership by the wife, and as no evidence of beneficial ownership by the assessee was presented, it held that any capital gains should be assessed in the wife's hands. The enhancement made by the CIT(A) was deleted, and the appeal on this ground was allowed.

General Grounds:
Grounds 4 and 5, which were general in nature, did not require separate adjudication as no arguments were advanced by the assessee. Therefore, these grounds were dismissed without further discussion.

In conclusion, the ITAT partly allowed the appeal of the assessee, upholding the assessment of unexplained cash deposits but ruling that the short term capital gains should be assessed in the wife's hands, not the assessee's. The general grounds were dismissed as no arguments were presented.