2018 (5) TMI 707 - AT - Income Tax

Unexplained money deposited in the bank account - assessee has opened a bank account with the professional who was authorised representative of the assessee - absence of source of the cash deposited in this bank account - Assessee did not produce any supporting evidence to substantiate his claim - Held that - When first account holder is authorised representative of the assessee would clearly support the findings of the authorities below that it was an unaccounted bank account maintained by the assessee with his Authorised Representative and in the absence of any explanation of source of the cash deposited in the bank account, no interference is called for in the matter. 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.- Decided against assessee.

Summary

Issues:
Challenging addition of unexplained money deposited in bank account for A.Y. 2007-2008.

Analysis:
The appeal was against the addition of ?7,32,000 on account of unexplained money deposited in the bank account. The initial assessment order was set aside, and the matter was restored for fresh assessment. The assessee claimed that actual cash deposits were ?7,32,000 and not ?10,32,000, stating the bank account belonged to another individual. However, the AO found the assessee failed to prove the transactions were not related to him, leading to the addition. The CIT(A) upheld the addition, emphasizing joint accounts are usually between close relations or friends pooling resources, which was not the case here. The onus was on the assessee to prove the money was not deposited by him, especially as a joint account holder. The CIT(A) dismissed the appeal, stating the deposits were unexplained money of the assessee.

The assessee contended that being a second holder of the joint bank account, the addition was made on presumption. The authorities relied on the fact that the first account holder was the assessee's authorized representative. The statement recorded by the AO revealed the joint account with the other individual, who was an accountant, not an advocate as claimed. The lack of explanation regarding the circumstances of opening the joint account raised doubts. The professional relationship between the parties and the absence of supporting evidence led to the conclusion that the unaccounted cash belonged to the assessee. The authorities' findings were supported by the fact that the first account holder was the authorized representative of the assessee, indicating an unaccounted bank account maintained by the assessee.

In conclusion, the appeal was dismissed based on the totality of facts and the authorities' findings. The joint account with the authorized representative, lack of explanation for cash deposits, and the professional nature of the relationship supported the decision that the unexplained money in the bank account belonged to the assessee. No interference was warranted in the matter, and the appeal was consequently dismissed.