Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 882 - AT - Income TaxValidity of reopening of assessment u/s 147 - addition of transactions in HSBC Bank, Geneva - co-ownership in bank account with ex-wife - assessee argued that amendment to section 147 would not be applicable to the Appellant’s case and therefore the re-assessment was not valid - HELD THAT:- As per reasons recorded, the assessee has invested along with his ex-wife in HSBC Bank, Geneva and the transaction with HSBC Bank were not disclosed to the department. However, it has not been stated that the said investment in HSBC was out of income which escaped assessment. AO also has not mentioned in the aforesaid reasons that he was satisfied that the above income escaped assessment. He simply relied on the information received in his possession to come to the conclusion that this HSBC bank account belonged to the assessee. In the present case, the AO simply relied upon the information received by him and stated that the investment in assessee’s joint account with his ex-wife with HSBC Bank which has not been disclosed in the return of income filed by the assessee is the income which escaped assessment in the hands of assessee - AO simply acted upon the information and did not apply his own mind to the information to arrive at a belief independently that on the basis of material before him to come to the conclusion that income has escaped assessment - it is a joint account of assessee with his ex-wife, Ms. Vandana Virwani with HSBC Bank, Geneva and the assessee solely cannot be considered as owner of the account so as to bring the entire transaction in that account in the hands of the assessee. AO has just suspicion in his mind and it is trite law that an assessment cannot be reopened merely on the basis of suspicion and initiation of reassessment proceedings u/s. 148 of the Act on the basis of this aspect was invalid in the eye of law. AO framed assessment on protective basis in AY 2002- 03 which clearly shows that he was not sure as to whether assessee was having income which escaped assessment AO is not sure whether income has to be assessed in the hands of assessee or his ex-wife. Next, he was not sure in which assessment year it has to be taxed, whether AY 2002-03 or 2003-04. In addition, he is not sure who is the exact owner of this bank account. HSBC bank account is a joint account with assessee’s ex-wife. It does not lead to the conclusion that the assessee is the sole owner and beneficial of the said bank account in order to bring this deposit as taxable in the hands of assessee as the owner of the account. The onus of proving lies with the department. This legal proposition has been laid down in the case of CIT v. K. Chinnathamban [2007 (7) TMI 204 - SUPREME COURT] wherein it was held that where a deposit stands in the name of a third person and where that person is related to the assessee, then in such a case the proper course would be to call upon the person in whose books the deposit appears or the person in whose name the deposit stands to explain such deposit. AO reopened the assessment merely on suspicion and surmise, without there being any positive material in his possession to prove that the assessee is the owner of the bank account or having beneficial interest in this bank account. Therefore, we are of the opinion that the reopening of assessments are bad in law, which cannot be sustained. Accordingly, we quash the reassessments. - Decided in favour of assessee.
|