2023 (1) TMI 567 - AT - Income Tax

Additions towards fixed deposit in the name of family members - Addition of interest income on such FDs - fixed deposits found during the course of search - assessee has admittedly shown higher income in its computation of income and consequently, CIT(A) has deleted the disallowance but has enhanced the assessment by directing the AO to bring to tax the income offered by the assessee in its computation of income - HELD THAT:- We are live to the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. [2006 (3) TMI 75 - SUPREME COURT] wherein, it has been clearly held that in the absence of a revised return being filed, only the Appellate Authority can direct the Assessing Officer to consider the assessment on the basis of the computation of income, which is filed in the course of appellate proceedings.

A perusal of the order of the Ld. CIT(A) clearly shows that the Ld. CIT(A) has called for the remand report and the Assessing Officer has accepted that the assessee has the source for the fixed deposit of Rs. 5 crores. Admittedly, the amount of s. 1.5 crores of fixed deposit in the name of family members can adequately be sourced from the income offered by the assessee. Even otherwise, said addition cannot be made in the hands of the assessee as the fixed deposits are not in the name of the assessee and it is a search case and the assessment has to be done as per the evidence found during the course of search and fixed deposits are in the name of family members.

Coming to the issue of interest, admittedly, the assessee has shown actual interest income in the computation of income and the CIT(A) has directed for taxing for the actual interest income. This being so, we find no error in the findings of the Ld. CIT(A), which is hereby confirmed.

Appeal of the revenue and the cross objection of the assessee are dismissed.