The father cannot be taxed for a cash deposit in a bank account opened in

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    Father cannot be taxed on cash deposit in bank account opened in son’s name after he attains majority: ITAT

    Cash transactions are a matter of various disputes and litigations under the Income Tax Act 1961. Here is an interesting question before the Pune ITAT as below:

    Vijay Vasantrao Mahadik (ITA No.603/PUN/2019)

    Facts:

    1. The applicant is an attorney who provides advice to various clients and also has income from real estate transactions. The assessee filed an e-return of income on 25.11.2014 declaring a total income of Rs.21594190.
    1. According to AIR, an amount of Rs 28,00,000 was deposited in cash in Bank Account No. 6092500100477601 in Karnataka Bank. This bank account is opened in the name of the appellant’s son Mr. Virendra Mahadik and the appellant is also a joint signatory to the account.
    1. The AO inspected the books of Shri Virendra Mahadik and found that he had deposited only a sum of Rs. 14,27,000/- to the said bank account. Therefore, the AO held that the remaining amount of Rs.13,73,000/- was deposited by the assessee and also asked the AR to show why it should not be treated as an unexplained loan in the hands of the appellant. As there was no explanation from the assessee, the AO added the same u/s. 68 of the Law.
    1. The assessee claimed that the bank account in Karnataka Bank belongs to his son who is a regular taxpayer and this bank account is also reflected in the balance sheet and return of income for the year 2014-15.
    1. It was further alleged that the said account was opened on 20.10.2010 when the son was a minor and he acted as the guardian of the son and the account. It was claimed that the son became a major on 23.05.2011. As his eldest son has a source of income, it should have been valued in his hands.

    ITAT Pune held as follows:

    1. The assessee’s son has become a major and therefore the income is assessable in his independent capacity.
    1. Under Section 64 (1A) of the Income-tax Act, levy of income is provided only in the case of a minor child.
    1. Both the learned lower authorities erred in law and facts in adding the impugned cash deposits of Rs.13.73 lakhs in the hands of the assessee.

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