Sh. Ashok Kumar Gupta Prop., New Delhi V. ITO, New Delhi

CO 330/DEL/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0228 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAI
• Keywords: Income from undisclosed sources; Search and seizure; Peak credit; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 3239/DEL/2012 3239/DEL/2012 3239/DEL/2012 3239/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2007 2007 2007 2007 - -- - 08 0808 08 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -25(1), 25(1), 25(1), 25(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI SHRI SHRI SHRI ASHOK KUMAR GUPTA, ASHOK KUMAR GUPTA, ASHOK KUMAR GUPTA, ASHOK KUMAR GUPTA, PROP. M/S ESQUIRE ELECTRONIC, PROP. M/S ESQUIRE ELECTRONIC, PROP. M/S ESQUIRE ELECTRONIC, PROP. M/S ESQUIRE ELECTRONIC, A AA A- -- -138, SARASWATI VIHAR, 138, SARASWATI VIHAR, 138, SARASWATI VIHAR, 138, SARASWATI VIHAR, DELHI DELHI DELHI DELHI 110 034. 110 034. 110 034. 110 034. PAN : AAHPG9105D. PAN : AAHPG9105D. PAN : AAHPG9105D. PAN : AAHPG9105D. (APPELLANT) (RESPONDENT) CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION NO NONO NO .330/DEL/2012 .330/DEL/2012 .330/DEL/2012 .330/DEL/2012 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2007 2007 2007 2007 - -- - 08 0808 08 SHRI ASHOK KUMAR GUPTA, SHRI ASHOK KUMAR GUPTA, SHRI ASHOK KUMAR GUPTA, SHRI ASHOK KUMAR GUPTA, PROP. M/S ESQUIRE PROP. M/S ESQUIRE PROP. M/S ESQUIRE PROP. M/S ESQUIRE ELECTRONIC, ELECTRONIC, ELECTRONIC, ELECTRONIC, A AA A- -- -138, SARASWATI VIHAR, 138, SARASWATI VIHAR, 138, SARASWATI VIHAR, 138, SARASWATI VIHAR, DELHI DELHI DELHI DELHI 110 034. 110 034. 110 034. 110 034. PAN : AAHPG9105D. PAN : AAHPG9105D. PAN : AAHPG9105D. PAN : AAHPG9105D. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -25(1), 25(1), 25(1), 25(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI VIKRAM SAHAI, DR. ASSESSEE BY : SHRI MOHIT GUPTA, CA. ORDER ORDER ORDER ORDER PER G.D. AG PER G.D. AG PER G.D. AG PER G.D. AGRAWAL, VP RAWAL, VP RAWAL, VP RAWAL, VP : :: : THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XVI, NEW DELHI DATED 17 TH JANUARY, 2012 FOR THE AY 2007-08. THE ASSESSEE HAS ALSO FILED THE CROSS-OBJ ECTION IN SUPPORT OF THE ORDER OF LEARNED CIT(A). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN RESTRICT ING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS TO ITA-3239/DEL/2012 & CO-330/DEL/2012 2 PEAK CREDIT EVEN THOUGH THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCE OF SUCH CASH DEPOSITS AND SOURCE OF SPECULATIVE INCOME WITH DOCUMENTARY EVIDENCES. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN SETTING ASIDE THE ORDER RELATING TO THE ISSUE OF UNEXPLAINED CASH DEPOSIT TO DETERMINE PEAK CREDIT, WHEN AS PER SECTI ON 251 OF THE I.T. ACT, THE CIT(A) HAS NO POWER TO SET -ASIDE EITHER PARTIALLY OR WHOLLY THE ASSESSMENT ORDER. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFF ICER MADE THE ADDITION OF `17,37,672/- FOR UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE. OUT OF THE ABOVE DEPOSIT, THE CASH D EPOSIT WAS `14,30,090/- AND DEPOSIT BY CHEQUE WAS `3,07,582/-. ON APPEAL, LEARNED CIT(A) SUSTAINED THE UNEXPLAINED DEPOSIT BY CHEQUE AND IN RESPECT OF UNEXPLAINED CASH DEPOSIT, HE DIRECTED TH E ASSESSING OFFICER TO MAKE THE ADDITION AT THE VALUE OF PEAK CREDIT IN THE BANK ACCOUNT OF THE ASSESSEE INSTEAD OF ADDING THE ENTIRE CASH DEPO SIT. THE REVENUE, AGGRIEVED WITH THE ORDER OF LEARNED CIT(A), IS IN A PPEAL BEFORE US. THE ASSESSEE, THOUGH FILED THE CROSS-OBJECTION, BUT, AT THE TIME OF HEARING BEFORE US, HE SUBMITTED THAT HE IS SUPPORTING THE O RDER OF THE LEARNED CIT(A). 4. LEARNED DR RELIED UPON THE DECISION OF HONBLE M ADHYA PRADESH HIGH COURT IN THE CASE OF JHAMATMAL TAKHATMAL KIRAN A MERCHANTS VS. CIT [1999] 152 CTR (MP) 311. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, RELIED UPON THE DECISION OF HON' BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ADDITIONAL CIT VS. CHETAN DASS (DECEASED) [1975] 99 ITR 46 (DEL). THE LEARNED COUNSEL ALSO P RODUCED THE COPY OF BANK ACCOUNT OF THE ASSESSEE AND POINTED OUT THAT T HERE WERE FREQUENT DEPOSITS AND WITHDRAWALS IN THE ASSESSEES BANK ACC OUNT AND THOSE WITHDRAWALS WERE AVAILABLE FOR THE SUBSEQUENT DEPOS ITS. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. AT PAGE 3 & 4 OF THE ITA-3239/DEL/2012 & CO-330/DEL/2012 3 ASSESSEES PAPER BOOK, THE ASSESSEE HAS GIVEN THE D ETAILS OF CASH DEPOSIT AND WITHDRAWAL IN HIS BANK ACCOUNT, FROM WH ICH, WE FIND THAT THERE ARE FREQUENT DEPOSITS AND WITHDRAWALS IN ROUN D FIGURE IN ASSESSEES BANK ACCOUNT. THE WITHDRAWALS AS WELL A S DEPOSITS ARE RANGING FROM `10,000/- TO `1,00,000/-. ON THESE FA CTS, IN OUR OPINION, THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT C ITED BY THE LEARNED COUNSEL WOULD BE SQUARELY APPLICABLE WHEREIN THE IT AT DELETED THE ADDITION ON THE GROUND THAT THE SUBSEQUENT DEPOSIT WAS OUT OF THE EARLIER WITHDRAWALS. THE RELEVANT FACTS OF THE SAI D CASE READ AS UNDER:- ON THE BASIS OF AN EXERCISE BOOK SEIZED BY THE SAL ES- TAX AUTHORITIES IN A RAID, WHICH SHOWED THAT THE ASSESSEE HAD ADVANCED LOANS OF THREE SUMS AMOUNTING TO RS.30,000 IN MARCH, 1963, THE INCOME-TAX OFFICER ASSESSED THE SUM OF RS.30,000 AS INCOME FROM UNDISCLOSED SOURCES. THE APPELLATE ASSISTANT COMMISSIONER AND THE APPELLATE TRIBUNAL DIRECTED DELETION OF THIS SUM OF RS.30,000 ON THE GROUND THA T THIS SUM WAS MORE THAN COVERED BY THE WITHDRAWALS O F RS.50,000 IN CERTAIN OTHER ACCOUNTS MADE BARELY TWO MONTHS EARLIER AND THE DEPOSITS IN WHICH ACCOUNTS H AD ALSO BEEN BROUGHT TO TAX AS INCOME FROM UNDISCLOSED SOURCES. 6. THE REVENUE HAD FILED THE APPEAL BEFORE THE HON' BLE JURISDICTIONAL HIGH COURT WHICH WAS DISMISSED WITH THE FOLLOWING FINDING:- HELD, THAT THE INFERENCE DRAWN BY THE TRIBUNAL WAS NEITHER UNREASONABLE NOR PERVERSE NOR COULD IT BE S AID TO BE BASED ON NO EVIDENCE OR ON MERE CONJECTURE OR SURMISE. THE TRIBUNALS FINDING WAS ON A QUESTION OF FACT AND NO QUESTION OF LAW AROSE OUT OF ITS ORDER. 7. THE RATIO OF THE ABOVE DECISION OF HON'BLE JURIS DICTIONAL HIGH COURT WOULD BE SQUARELY APPLICABLE TO THE CASE UNDE R APPEAL BEFORE US. FROM THE DETAILS OF THE WITHDRAWALS AND DEPOSITS IN THE BANK, IT IS EVIDENT THAT THERE IS FREQUENT CASH WITHDRAWAL AND CASH DEPOSIT. THUS, ITA-3239/DEL/2012 & CO-330/DEL/2012 4 EARLIER WITHDRAWAL IS CERTAINLY AVAILABLE FOR THE D EPOSIT MADE IN THE BANK ACCOUNT THEREAFTER. THE CIT(A) HAS DIRECTED T O MAKE THE ADDITION FOR PEAK CREDIT WHICH WILL IN EFFECT GIVE CREDIT TO THE ASSESSEE FOR THE EARLIER WITHDRAWAL IN SUBSEQUENT DEPOSITS AND ONLY THE PEAK CREDIT ON ANY DAY IN THE ASSESSEES BANK ACCOUNT WOULD BE ADD ED. 8. THAT THE DECISION OF HONBLE MADHYA PRADESH HIGH COURT RELIED UPON BY THE LEARNED DR WOULD NOT BE APPLICABLE TO T HE FACTS OF THE ASSESSEES CASE BECAUSE IN THE SAID CASE, THERE WAS DEBIT AND CREDIT IN HASTE KHATE AND NOT IN THE BANK ACCOUNT AND MOREOVER, WHEN TH ERE IS A DECISION OF HON'BLE JURISDICTIONAL HIGH COURT, TH E SAME IS BINDING UPON US. WE, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT, UPHOLD THE ORDER OF LEARNED CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 9. BY THE CROSS-OBJECTION, THE ASSESSEE ONLY SUPPOR TED THE ORDER OF LEARNED CIT(A) AND HAS NOT CLAIMED ANY FURTHER RELI EF. THEREFORE, THE ASSESSEES CROSS-OBJECTION IS TREATED AS INFRUCTUOU S AND REJECTED AS SUCH. 10. IN THE RESULT, THE APPEAL OF THE REVENUE AND TH E CROSS-OBJECTION OF THE ASSESSEE ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2015. SD/- SD/- ( (( ( CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG ) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 30.01.2015 VK. ITA-3239/DEL/2012 & CO-330/DEL/2012 5 COPY FORWARDED TO: - 1. REVENUE : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -25(1), NEW DELHI. 25(1), NEW DELHI. 25(1), NEW DELHI. 25(1), NEW DELHI. 2. ASSESSEE : SHRI ASHOK KUMAR GUPTA, SHRI ASHOK KUMAR GUPTA, SHRI ASHOK KUMAR GUPTA, SHRI ASHOK KUMAR GUPTA, PROP. M/S ESQUIRE ELECTRONIC PROP. M/S ESQUIRE ELECTRONIC PROP. M/S ESQUIRE ELECTRONIC PROP. M/S ESQUIRE ELECTRONIC, ,, , A AA A- -- -138, SARASWATI VIHAR, DELHI 138, SARASWATI VIHAR, DELHI 138, SARASWATI VIHAR, DELHI 138, SARASWATI VIHAR, DELHI 110 034. 110 034. 110 034. 110 034. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR