2019 (3) TMI 481 - AT - Income Tax

Unexplained investment u/s.69 - cash deposit in the Bank as unexplained cash credits - income from salary, stridhan, interest income for a prolong period in relation to the income of the assessee s wife - HELD THAT - As perused the documents annexed assessee s wife in whose name the amount was claimed to have been deposited either by assessee or herself was from her income from salary, sale of jewellery and other sources including Income Tax Return as available seems to be genuine. The salary certificate is also part of the document before us. The chart prepared by the assessee regarding her source of income appearing in the written submission before the Learned CIT(A) dated 07.05.2013 for Financial Year 2002-03 to 2007-08 have also been perused by us. We have carefully considered the judgments relied upon by the assessee as well. We find that since the pay-in-slips bore the signature of the assessee and not the signature of the assessee s wife. AO came to a conclusion that the transactions were made by the assessee and not by his wife. While doing so, the AO did not take into account that the evidence relating to income from salary, stridhan, interest income for a prolong period in relation to the income of the assessee s wife or that the fact that the preposition of deposing this money in a joint account by the husband by putting his own signature instead of his wife does not necessarily lead to a conclusion that the husband has deposited the same from his own income other than the income earned by the wife. Since the genuineness of the source of income of the wife has not been questioned by the authorities below the entire addition cannot be made as unexplained investment u/s 69. The entire source of amount so deposited was failed to have been established by the assessee with corroborating evidences. Taking into consideration the entire gamut of the matter found it fit and reasonable to allow ₹ 3,00,000/- as the saving of the wife of the assessee from such addition made by the authorities below. - Decided partly in favour of assessee.

Summary

Issues Involved:
1. Addition of unexplained investment under section 69
2. Rejection of evidence supporting cash deposits in bank account
3. Consideration of source of cash deposits

Analysis:

Issue 1: Addition of unexplained investment under section 69
The appeal challenged the order upholding the addition of ?8,60,549 as unexplained investment under section 69 made by the Assessing Officer. The assessee contended that the addition was illegal and against natural justice. The Assessing Officer relied on documents indicating transactions made by the assessee, leading to the conclusion that the deposits were from the business of Civil Construction. The wife of the assessee declared limited sources of income, raising suspicion. The Commissioner of Income Tax (Appeals) affirmed the addition. The Tribunal considered the submissions and evidence presented by the assessee, including the wife's savings from personal earnings and cash deposits from various sources. The Tribunal observed discrepancies in the signatures on pay-in slips but acknowledged the genuine sources of income of the wife. The Tribunal concluded that the entire addition could not be categorized as unexplained investment under section 69. However, the assessee failed to establish the complete source of the deposited amount. Consequently, the Tribunal allowed ?3,00,000 as the wife's savings from the addition made by the authorities.

Issue 2: Rejection of evidence supporting cash deposits in bank account
The assessee argued that the evidence presented in support of cash deposits in the bank account by the wife was wrongly rejected by the lower authorities. The Tribunal examined documents such as bank statements, cash books, and cash flow statements provided by the assessee. The Tribunal noted that the documents indicated genuine sources of income from the wife's salary, sale of jewellery, and other earnings. The Tribunal also considered a chart detailing the wife's income sources for multiple financial years. Despite discrepancies in signatures on pay-in slips, the Tribunal emphasized that the genuineness of the wife's income sources was not questioned by the authorities. Therefore, the Tribunal concluded that the entire addition could not be justified as unexplained investment under section 69.

Issue 3: Consideration of source of cash deposits
The Tribunal deliberated on whether the cash deposits in the bank account were adequately explained by the wife's income sources. While acknowledging the genuine nature of the wife's income, the Tribunal found that the complete source of the deposited amount was not fully established by the assessee. Consequently, the Tribunal allowed a partial relief of ?3,00,000 from the total addition upheld by the lower authorities.

In conclusion, the Tribunal partially allowed the assessee's appeal, considering the genuine sources of the wife's income but requiring further substantiation of the deposited amount to justify the addition under section 69.