Neeraj Kumar Giri
(Querist) 04 December 2013
This query is : Resolved
Dear Sir, I would eager to know that, in a case of scrutiny one Assesse, which is a Civil Engineer in Govt. concern,the disputed matter is one of his wife's KVP investment amount has been matured in his own Account, which ITO (A/O) has added as his income,The question is that his wife is a housewife and the KVP has been received from various relatives as a gift.Is there any favourable circular or case study similar to this case, which will help me while appealing to CIT. Thanking you.
(Expert) 04 December 2013
consult tax lawyer.
C. P. CHUGH
(Expert) 09 December 2013
From the query i understand that wife of one of your assessee was having some KVP which on maturity got credited in his account, and AO during assessment u/s 143(3) added to his income. Correct.
From the above it is presumed that your assessee and his wife has a joint account in which the proceeds of KVP were credited, if it is so, your assessee can produce the copy of KVPs or a certificate from PO that the credit appearing in bank actually represented proceeds of KVPs held by her. He is very much likely to get relief from CIT (A).
If it is not the case, how the proceeds of KVP can be credited to his account. Whether such certificates were held jointly and he managed to get the proceeds in his name. Even if it were held jointly, it is to be seen whose name appeared as first holder and whose name as joint holder.
In the absence of all these clarification, it is difficult to exactly answer your query.
(Expert) 10 December 2013
ITO must have added the sum as unexplained cash credit u/s 68.
KVP matures in 84 months (right???). So if you have copy of KVP certificate, even if it stands in the name of assesee and not his wife, still only the accrued interest can be added and not the principal which was invested 7 years back. If KVP certificate is not there, assessee can obtain a certificate from respective post office showing date of investment and maturity.
For rest of explanation, pls follow Mr Chugh's advice. If the assessee does not have the copy of KVP and neither he is able to obtain certificate from post office, very difficult to defend.
You have stated in your question that the relatives of your wife had gifted the KVP and same matured. 1st you have to prove that the said gift transactions. You have not mentioned in which assessment year in which ITO had made the addition. If it is cover by the time limit as stated by Mr. Vineet, then you argue before the CIT(Appeals) that the Income-tax Officer is not justify to make the addition of whole KVP amount as it is beyond the prescribed time limit. If it is within time limit the investment amount could not added as the investment not made in the assessment year in which order is passed. Only the accrued interest amount of the year of the assessment period only. Your case is very positive for relief. You file appeal as early as possible as not become time bar.