2022 (10) TMI 225 - AT - Income Tax

Unexplained cash deposit in Banks - assessee stated that primary pleadings and arguments against the additions made was that it tantamounted to duplicate addition since cash deposited related to only one bank account ,each in HDFC Bank and Dena Bank, jointly held in the names of both the assessees while the Revenue had held that there was separate bank accounts in relation to which addition of cash found deposited had been made in the hands of both the assessee - HELD THAT - As noted from the submissions of the assessee before the Ld.CIT(A), that they had offered to submit any further evidences which was required to prove his case. But the Ld.CIT(A) simply dismissed this contention of the assessee stating that copies of the other alleged bank accounts had been obtained from the banks by the Revenue u/s 133(6) of the Act. The assessee was neither provided copy of these bank accounts nor given any further opportunity to prove that these Bank accounts never belonged to the assessee - CIT(A) simply relied on this information obtained and dismissed assesses arguments completely. Now before us the assessee has produced certificates from the Bank denying existence of any such Bank accounts. This is a very crucial piece of information for adjudicating the issue at hand. And as noted above the assessee was barely provided any opportunity to produce it before the Ld.CIT(A).These evidences now filed by the assessee before us are therefore being admitted by us for adjudicating the issue. Assessee has explained source of cash deposited in their bank accounts, as has being related to the moneys which they had earlier lent to friends and relatives in India by transferring to them through Western Union and had substantiated the explanation by producing documents evidencing transfer of money by the assessees through Western Union. Even these evidences have not been properly appreciated by the authorities below. The assessees had stated to the authorities below that both of them were senior citiziens and had moved to USA way back in 1997-98. That they used to come to India only for brief visits. That on requests from relatives they had on several occasions transferred money to them through Western Union. And when they visited India briefly in the impugned year, in January February 2011, these relatives returned back some of the money earlier lent to them in cash which was deposited in their bank accounts. The Revenue has not controverted the fact that the assesses are NRI s and senior citizens. Copies of documents of Western Union evidencing money transfer by the assesses to India was filed to the Revenue authorities. There is no finding of any source of income of the assesses in India, by the Revenue. The veracity of the assesses explanation ought to have been considered by the Revenue in this backdrop of facts. But they chose to apply strict standards of proving genuineness of cash credits by filing confirmations and other documents from the purported depositors. Since the basic issue of existence of actual bank accounts of the assesses, in our considered view needs reconsideration, we restore both the cases back to the AO to first establish this basic fact and thereafter proceed to determine the issue of cash deposits whether explained or not, in accordance with law - Appeals of the assesseeare allowed for statistical purpose.

Issues:
- Dispute over cash deposits in joint bank accounts of spouses.
- Allegation of duplicate addition by the assessee.
- Difference in bank accounts as per Revenue and assessee's claims.
- Failure to properly consider evidence by the lower authorities.
- Source of cash deposits explained by the assessee.

Detailed Analysis:

Issue 1: Dispute over cash deposits in joint bank accounts of spouses:
The appeals were filed by the assessees against separate orders passed by the Commissioner of Income-Tax (Appeals) concerning cash deposits found in their joint bank accounts. The primary contention was that the cash deposits related to only one bank account jointly held by the spouses in HDFC Bank and Dena Bank. The Revenue, however, argued that there were separate bank accounts leading to additions in both spouses' hands.

Issue 2: Allegation of duplicate addition by the assessee:
The assessee claimed that the additions made by the Revenue amounted to duplicate addition since the cash deposits were related to one joint bank account only. The assessee's argument was that the additions should have been made in the hands of one of the spouses, not both, as the deposits were in a single joint account.

Issue 3: Difference in bank accounts as per Revenue and assessee's claims:
The Revenue contended that there were two additional bank accounts in HDFC Bank and Dena Bank, while the assessee maintained that they had only one joint account in each bank. The Revenue upheld the additions based on the existence of separate bank accounts, leading to separate issues of cash deposits for each spouse.

Issue 4: Failure to properly consider evidence by the lower authorities:
The lower authorities failed to adequately consider the evidence presented by the assessee, including bank statements, certificates from banks denying the existence of additional accounts, and documents showing the source of cash deposits. The authorities dismissed the assessee's contentions without providing an opportunity to prove the non-existence of the alleged bank accounts.

Issue 5: Source of cash deposits explained by the assessee:
The assessee explained that the cash deposits were from money transferred to relatives in India through Western Union, which was returned in cash when the spouses visited India briefly. Documents from Western Union were produced to substantiate this explanation. The Revenue did not dispute the NRI status of the assesses or the source of income, yet failed to consider the explanation provided.

In conclusion, the Appellate Tribunal allowed the appeals for statistical purposes, emphasizing the need for further inquiry into the existence of bank accounts and proper consideration of evidence. The cases were remanded back to the Assessing Officer for reevaluation, granting the assessee a fair opportunity to present their case.

This detailed analysis of the legal judgment highlights the key issues, arguments, and decisions made by the Appellate Tribunal in the case involving disputes over cash deposits in joint bank accounts of spouses.

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