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2021 (6) TMI 57 - AT - Income TaxUnexplained cash deposits - assessee is having joint account with HDFC Bank - HELD THAT:- As deposits were made in joint account maintained in the names of Marri Venkata Subbareddy being a first holder, the assessee and her mother-in-law Smt.Subbayamma Reddy. In the assessment order, the AO has not given any reason to assess the deposits made in the bank account in the hands of the assessee instead of her mother-in-law Smt. Subbayamma Reddy, though, the assessee has given a letter to the AO stating that the deposits made in joint account belonged to her mother-in-law Smt. Subbayamma Reddy. AO simply brushed aside the explanation and taxed the deposits in the hands of the assessee. When the deposits were made in the joint account the same should be assessed in the hands of correct person after due identification. In the instant case, the assessee furnished the letter but the AO has not made any effort to verify the correctness of the statement made by Smt. Marri Vijaya Lakshmi stating that Smt. Subbayamma Reddy is not an Income-tax assessee. AO is not barred from making assessment in the hands of the person who is not assessed to tax if there is taxable income. Smt. Subbayamma Reddy also did not refuse or reject the statement made by the assessee and therefore we hold that when specifically made out the case that deposits were made by her mother-in-law Smt. Subbayamma Reddy who is the joint account holder, there is no justification to make the addition in the hands of the assessee, hence, we set aside the order of the ld. CIT(A) and delete the addition made by the AO. Even otherwise, the assessee has the furnished cash flow statement explaining the source of the deposits, the cash deposits made by the assessee are supported by the withdrawals made in the account and the department did not bring any evidence to dispute the cash flow statement of the assessee. According to the cash flow statement there was a deficit of ₹ 76000/- only. Since all the joint account holders are the Income-tax assessees, there is no reason to suspect the negative balance of ₹ 76,000/-. Therefore, on merits also, the assessee succeeds.
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