Sri Ghanshyam Gupta, Coochbihar V. I.TO Wd - 2,Coochbehar, Coochbihar

ITA 1012/KOL/2013

• Counselvise Citation: 101223514 RSA 2013
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2013
• Court: TRIBUNAL
• Department Lawyers: SANJAY CIT LD
• Assessee Lawyers: SUBASH AGARWAL LD
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , SMC BENCH, KOLKATA [BEFORE HON BLE SHRI B.P.JAIN , AM ] I.T.A NO . 1012 /KOL/2013 A.Y : 200 9 - 10 SRI GHANASHYAM GUPTA VS. I.T.O WARD 2, CO O CHBEHAR C/O M/S. RADHIKA DRESS HOUSE PAN: ADSPG0571B ( APPELLANT) ( RESPONDENT ) FOR THE APPELLANT: S HRI S UBASH AGARWAL, ADVOCATE, LD.AR FOR THE RESPONDENT : SHRI SANJAY, ADDL.CIT, LD.DR DATE OF HEARING: 0 3 - 06 - 2 015 DATE OF PRONOUNCEMENT: 0 3 - 06 - 2015 ORDER TH IS APPEAL OF THE ASSESSEE ARISE S FROM THE ORDER OF LD. CIT(A) - JALPAIGURI DATED 14 - 11 - 2012 FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING REVISED GROUNDS OF APPEAL: - 1. FOR THAT ON THE FACTS OF THE CASE, THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.1,65,450/ - MADE BY THE AO ON ACCOUNT OF GROSS PROFIT FROM ALLEGED UNDISCLOSED TURNOVER. 2. `FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.1,00,000/ - AS INVESTMENT IN KOTAK SECURITIES. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.2,20,000/ - MADE BY TH E AO AS PEAK CREDIT IN THE UNDISCLOSED BANK ACCOUNT. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 3 . THE LD.AR FOR THE ASSESSEE DID NOT PRESS GROUND NO.2. THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 4. GROUND NO. 4 IS GENERAL IN NATURE. THE SAME REQUIRES NO ADJUDICATION. 5. G ROUND NOS. 1 & 3 OF THE ASSESSEE S APPEAL RELATE TO CONFIRMATION OF ADDITION S OF RS. 1,65.450/ - AND RS.2,20 ,000/ - BEING GROSS PROFIT AND PEAK CREDIT. 6. BRIEF FACTS OF THE CASE ARE THAT THE AO FROM AIR INFORMATION FOUND THAT THE ASSESSEE HAD ONE BANK ACCOUNT WITH AXIS BANK, COOCK BEHAR BRANCH WHERE DURING THE YEAR TOTAL DEPOSIT OF RS.16,75,860/ - WAS MADE. ON VERIFICATION FROM THE ASSESSEE, THE AO FOUND THAT THE ASSESSEE DID N OT DISCLOSE THIS A/C IN HIS RETURN AND ADMITTED THAT IT WAS AN UNDISCLOSED BANK A/C, BUT PART OF HIS BUSINESS TRANSACTIONS W E RE MADE THROUGH THIS A CCOUNT AND ALSO REQUESTED TO TREAT THE PEAK CREDIT BALANCE AS HIS UNDISCLOSED INVESTMENT AND ESTIMATE THE PROFIT ON THIS 2 ITA NO .1012/KOL/2013 - SMC - AM SRI GHANASHYAM GUPTA C/O RADHIKA DRESS HOUSE UNDISCLOSED TURNOVER IN THE LINE OF THE PROFIT DISCLOSE BY HIM. ON EXAMINATION OF THE BANK A/C, THE AO FOUND THAT ON 11 - 04 - 2008 THE ASSESSEE MADE AN INVESTMENT IN KOTAK SECURITIES OF RS.1,00,000/ - AND THE PEAK CREDIT BALANCE AS ON 18.04.2004 WAS RS.2,20,000/ - . THUS, THE AO HAS ADDED BOTH THE AMOUNTS AS UNDISCLOSED INVESTMENT AND UNDISCLOSED CASH BALANCE IN THE BANK. THE AO HAS ALSO ADDED ESTIMATED PROFIT @10% ON THE TOTAL DEPOSIT OF RS.16,54,500/ - WHICH CAME TO RS.1,65,450/ - . 7. THE LD.CIT(A) HAS CONFIRMED THE ABOVE ACTION OF THE AO. 8 . THE LD. COUNSEL FOR THE ASSESSEE, SHRI S UBASH AGARWAL , ADVOCATE ARGUED BEFORE US THAT THE ASSESSEE HAS SUBMITTED THE EXPLANATION, WHICH EXPLANATION IS AVAILABLE AT PAGE 1 OF THE ASSESSMENT ORDER THAT ALL THE TRANSACTIONS MADE ARE RELATED TO PURCHASE AND SALE OF THE OF THE READYMADE GARMENTS AND CLOTH BUSINESS AND THE SOURCE OF ALL THE CASH DEPOSITS MADE INTO THIS ACCOUNT ARE FROM UNDISCLOSED INCOME EARNED FROM HIS PROPRIETARY BUSINESS. ALL THE TRANSACTION S WERE ROTATION OF THE SAME CAPITAL AND ARGUED THAT THE PEAK CREDIT SHOULD BE TAKEN AS UNDISCLOSED INVESTMENT. THE AO APPLIED NET PROFIT RATE, THEN NO PE AK CREDIT CAN BE RETAINED. 9. THE LD.DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 10. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUS ING THE MATERIAL AVAILABLE ON RECORD , I FIND THAT T H E UNDIS PUTED FACT THAT IN THE PRESENT CASE THE ASSESSEE HAD SUBMITTED AN EXPLANATION, WHICH IS AVAILABLE AT PAGE 1 IN PARA 3( A ) OF THE ASSESSMENT ORDER THAT ALL THE CASH DEPOSITS AND WITHDRAWALS ARE RELAT ED TO HIS PROPRIETARY BUSINESS OF READY MADE GARMENTS. THEREFORE , THE ASSESSEE HAS SUBMITTED THAT EITHER THE PEAK CREDIT SHOULD BE TAKEN OR N.P R ATE SHOULD BE APPLIED. ONCE N.P RATE HAS BEEN APP LIED THEN THE SAME IMP L IES OF HAVING BEEN TAKEN INTO CONSIDERATION ALL THE DEPOSITS AND WITHDRAWALS I.E SALES AND PURCHASES IN THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE. IN SUCH CIRCUMSTANCES, THE PEAK CREDIT CANNOT BE ADDED AND ONLY NET PR OFIT RATE ON THE TURNOVER CAN BE RETAINED. THEREFORE , AO IS DIRECTED TO RETAIN R S.1 , 65 , 450 / - AS NET PROFIT TURNOVER AND FURTHER DIRECTED TO DELETE THE PEAK CREDIT OF R S.2.20 LAKH . IT IS ORDERED ACCORDINGLY. TH US, THE ORDER OF THE LD.CIT(A) ON THIS COUNT STANDS MODIFIED. GROUND NO.3 OF ASSESSEE S APPEAL IS ALLOWED AND GROUND NO.1 OF THE ASSESSEE S APPEAL IS DISMISSED. 11 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AS STATED ABOVE. ORDER IS PRONOUNCED IN THE OPEN COURT ON 0 3 - 06 - 2015 SD/ - ( B.P.J AIN ) DATED 03 - 06 - 2015 A CCOUNTANT MEMBER 3 ITA NO .1012/KOL/2013 - SMC - AM SRI GHANASHYAM GUPTA C/O RADHIKA DRESS HOUSE **PRADIP (SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT - SHRI GHANASHYAM GUPTA C/O RADHIKA DRESS HOUSE, BHABANIGANJ BAZAR, DIST: COOCHBEHAR 736101. 2 RESPONDENT I. T.O, W 2 , COOCHBEHAR. 3 . THE CIT(A) CONCERNED 4. 5. THE CIT CONCERNED THE D . R 6. GUAR D FILE TRUE COPY, BY ORDER ASSTT. REGISTRAR