2013 (10) TMI 1073 - AT - Income Tax

Undisclosed investment u/s 69B of the Income Tax Act bank account in question belong to other person - Held that - Shri Francis Joseph has only implicated the partnership firm, i.e., the deposits were made by the assessee from out of the income relating to the partnership firm - Statement given by Shri Francis Joseph, which is placed in the paper book filed by the assessee - It is well settled proposition of law that the income is required to be assessed in the hands of right person In the present case, assessee is the right person to be assessed Reliance has been placed upon the judgment in the case ITO Vs. Ch. Atchiah reported in 1995 (12) TMI 1 - SUPREME Court . - Decided against the revenue.

Summary

Issues:
1. Assessment of bank deposits as income of the assessee for the assessment year 1997-98.

Analysis:
The appeal before the Appellate Tribunal ITAT Cochin concerned the deletion of the assessment of bank deposits amounting to Rs.10,55,500 as income of the assessee for the assessment year 1997-98. The case revolved around the ownership of a bank account held by the assessee, who was the brother-in-law of another individual, Shri J.K. The Assessing Officer initially assessed the deposits in the bank account in the hands of Shri J.K, but later re-opened the assessment for the assessee and assessed the amount in question. The first appellate authority directed the Assessing Officer to delete the addition, stating that the bank account belonged to Shri J.K. The Tribunal considered the issue in detail, analyzing statements, documents, and surrounding circumstances. The Tribunal found that the bank account actually belonged to Shri J.K based on various factors, including the financial status of the parties involved. The Tribunal also addressed the contention of violation of natural justice regarding cross-examination, concluding that the tax authorities had sufficient material to support their decision. The Tribunal upheld the assessment of deposits in the bank account belonging to Shri J.K, affirming the decision of the first appellate authority.

The Tribunal referred to a Supreme Court decision emphasizing the importance of assessing income in the hands of the right person. Relying on the findings in a related case involving Shri J.K, the Tribunal upheld the direction of the first appellate authority to delete the assessment of the amount in question. Consequently, the appeal filed by the Revenue was dismissed, and the order of the first appellate authority was upheld.