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2021 (10) TMI 424 - HC - Income TaxIncome in the hands of HUF or members - amount in the name of joint members of HUF - whether when the bank account does not pertain to the HUF and it is only a joint account of two individuals, the same ought not to have been considered as unexplained cash deposit in the hands of the HUF? - HELD THAT - Contention of the appellant that the Assessing Officer ought not to have assessed to tax the amount of ₹ 71,169/- in the hands of the HUF found in the joint names of Subba Rama Gupta and his wife is totally misconceived as the fact finding authorities have given a categorical finding that the members of HUF had no independent source of income and moreover, the said factual aspect was admitted by the assessee before the Assessing Officer, as recorded by the CIT (Appeals) and the Tribunal. The assessee declaring his income by filing a revised income and offering to tax the amount utilized for the purpose of construction cannot be permitted to contend that the amount in the joint names of two members of the HUF cannot be considered to be the income of the HUF -we do not find any merit in considering the issues which are purely fact related, in appeal proceedings under Section 260A - we answer the substantial questions of law in favour of the Revenue and against the assessee.
Issues:
Assessment of unexplained cash deposit in the hands of a Hindu Undivided Family (HUF) based on joint account ownership and source of income declaration. Analysis: 1. The appeal was filed under Section 260A of the Income Tax Act, 1961, challenging the order passed by the Income Tax Appellate Tribunal relating to the assessment year 2007-08. The substantial questions of law raised included the assessment of amounts belonging to individuals in the hands of the HUF, jurisdiction based on consent, and the levy of interest under Section 234B of the Act. 2. The assessee, a HUF represented by its kartha, declared a total income for the relevant assessment year. The Assessing Officer initiated proceedings under Section 147 of the Act and made additions to the income, including an unexplained cash deposit found in a joint bank account of the HUF members. 3. The appeal before the CIT (Appeals) and the Tribunal challenged the addition of the unexplained cash deposit. The assessee argued that the amount should not be taxed in the hands of the HUF as it belonged to the individual joint account holders, not the HUF itself. 4. The Revenue contended that the authorities correctly analyzed the issue and dismissed the grounds raised by the assessee. The Revenue argued that the source of income was not adequately explained, and the issues raised were factual in nature, not substantial questions of law. 5. The Tribunal rejected the appeal, emphasizing that the explanations provided by the assessee regarding the source of income were unsupported by material evidence. The Tribunal found that the joint account funds were rightly assessed in the hands of the HUF, as the members had no independent source of income. 6. The Court upheld the Tribunal's decision, stating that the factual findings supported the assessment of the joint account funds in the HUF's income. The Court concluded that the issues raised were fact-related and not substantial questions of law, ruling in favor of the Revenue and dismissing the appeal. 7. Therefore, the appeal was dismissed, affirming the assessment of the unexplained cash deposit in the hands of the HUF. The judgment highlighted the importance of factual findings and supported the decision based on the lack of independent income sources for the HUF members.
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