TMI Blog2007 (7) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... n Para No.7 but at the time of arguments his counsel has pressed onlyfollowing two questions:- "B. Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified on facts and in law confirming the action of the authorities below by erroneously ignoring the fact that under similar facts and circumstances it has deleted the additions on account of FDRs/Bank Accounts of various customers but for the FDRs/Bank Accounts belonging to few relatives merely on the basis of relation and thus is an addition based on surmises and conjectures not warranted under any ITA No. 586 of 2006 -2-authorities of law and not even under the principles of natural justice." "G. Whether on the facts and in the circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal. The Tribunal examined the question, whether Section 69 or 69 would be applicable to the facts of the present case. The Tribunal divided the accounts concerning the assessee in two groups. The first group was of those accounts which were in the names of the relatives of the assessee (A/C No. 3603,4298,3681,3850,4606 and 424), the other category of accounts was treated to be benami of the assessee (e.g. A/C No. 4542). The Tribunal approved the reasoning adopted by the CIT (A) in Para Nos. 4 and 5 of its order where the accounts in the names of the relatives of the assessee were dealt with. It is worthwhile to notice Para Nos. 4 and 5 of the order of the Commissioner of Income-Tax (Appeals) which reads as under:- " 4. In the next ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count against security of FDR. There was no account opening form for this account but the operation of this account has been allowed by the appellant. Account No. 4606:- This account is in the name of Shri Satish Singla, Vinod Singla, Anju Bala and prurshotami but there was not account opening form. Shri Satish Singla and Vinay Singla has denied the ownership of this account. Further in para 22, page-12 of his order, the Assessing Officer has certain unexplained investments were routed through current account No. 424 maintained in the name of Satish Singla and certain loans were also raised through this account. The appellant admitted that this account was being operated without the knowledge of Shri Satish Singla. Further a no. of FDR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt himself was the introducer in these accounts. (iv) They were used to encash the FDRs either on maturity or prematurity. (v) The accounts were being operated by the appellant. (vi) Relatives in whose name the accounts were being operated have denied the operation of these accounts. The Assessing Officer confronted the appellant with the above facts and asked to identify these persons. In turn, the appellant replied as under:- "I had introduced the accounts of the various persons, who had approached for the opening of their respective accounts and such introduction was made by me as a Manager of the bank. It does happen that somebody approached the bank for the opening of bank accounts and in other to increase the deposits of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the person in whose name the FDR exists. This is to prevent fraudulent encashment by any person. According to the Assessing Officer since the maturity amounts in all these benami FDRs exceeded Rs.20,000/-, these had to be moved through saving bank accounts. The Assessing Officer by pointing out other irregularities in the opening of bank accounts concluded that the money rotated in such a manner belongs to the appellant. 5. The Assessing Officer lastly held that all the bank accounts opened in benami names whether in the names of the relatives or other benami names have been put together to prepare a peak chart having details of all the inflow and outflow from the bank accounts. According to this the Assessing Officer has prepared a char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly be confiscated by the department without making any addition in the hands of the assessee because these accounts at best are illegal and unknown accounts, where the defaulting persons might not be coming forward to avoid any complicity from the Tax Authority. It has been submitted that the deposits made in the bank account cannot in any case be considered as income of the assessee in his hands. Learned counsel has then contended that the assessee was merely an over-zealous Manager who had attempted to encourage the opening of a large number of accounts and if those persons who have made the deposits are not coming forward then the same cannot constitute a basis for treating the amount deposited in their accounts as undisclosed income of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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