Sri Vaibhav Agarwal, V. I.T.O.,

ITA 102/RAN/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85452 (ITAT-RANCHI)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 07-03-2014
• Court: TRIBUNAL
• Department Lawyers: RAKESH KR DAS L D
• Assessee Lawyers: M K CHOUDHARY S LD ARS; S SHR S K PODDAR
• Keywords: Peak credit
• Section: 147

Judgement Text

INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, RANCHI BEFORE HON'BLE SHRI H.L. KARWA, PRESIDENT , AND HON'BLE SHRI B.R. BASKARAN, ACCOUNTANT M EMBER ITA NO S . 102 & 103 /RAN/201 4 A.Y S. 2004 - 05& 20 05 - 06 SRI VAIBHAV AGARWAL, JSR VS. I.T.O WARD 3(4), JSR PAN: AAYPA 3589N ( APPELLANT ) ( RESPONDENT ) FOR THE APPELLANT : S/ SHR S.K PODDAR & M.K CHOUDHARY, ADVOCATES,. LD.ARS FOR THE RESPONDENT : SHRI RAKESH KR. DAS, L D.DR DATE OF HEARING : 01 - 12 - 2014 DATE OF PRONOUNCEMENT: 01 - 12 - 2014 O R D E R SHRI B.R. BASKARAN, ACCOUNTANT MEMBER : BOTH TH E APPEALS F ILED BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDER DATED 16 - 01 - 2014 PASSED BY LD. CIT(A) , JAMSHEDPUR AND THEY RELATE TO THE ASSESSMENT YEAR S 2004 - 05 AND 20 05 - 06 . 2. IN ASSESSMENT YEAR 2004 - 05, THE ASSESSEE HAS RAISED A LEGAL GROUND RELATING TO THE APPROVAL OBTAINED U/S. 151(2) OF THE ACT. SIMILARLY, IN THE ASSESSMENT YEAR 2005 - 06, THE ASSESSEE HAS RAISED LEGAL GROUND TO THE VALIDITY OF RE - ASSESSMENT PROCEEDINGS INITIATED U/S. 147 OF THE ACT . 3 . AT THE TIME OF HEARING, THE LD.AR SUBMITTED THAT HE IS NOT PRESSING BOTH THE SAID LEGAL GROUNDS . I N SUPPORT OF THE SAME , HE MADE NECESSARY ENDORSEMENT IN THE GROUNDS OF APPEAL BY OBTAINING HIS SIGNATURE. ACCORDINGLY, BOTH THE LEGAL GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED AS NOT PRESSED . 2 ITA NO. 1 02 & 103 /RAN/14 SRI VAIBHAV AGARWAL 4 . IN BOTH THE APPEALS, THE ASSESSEE IS AGGRIEVE D BY THE SAID DECISION OF THE LD.CIT(A) IN CONFIRMING THE ADDITION OF UNEXPLAINED DEPOSITS FOUND TO HAVE BEEN MADE IN THE BANK ACCOUNT OF THE ASSESSEE. 5 . WE HAVE HEARD THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. IN THE ASSESSMENT YEAR 2004 - 05, WE NOTICE THAT THE ASSESSING OFFICER ASSESSED AN AGGREGATE AMOUNT OF CASH DEPOSIT S FOUND IN THE BANK ACCOUNT IN THE ASSESSMENT YEAR 2005 - 06 . THE ASSESSING OFFICER, HOWEVER, HAS ASSESSED THE PEAK CREDIT AMOUNT OF DEPOSIT FOUND IN THE BANK ACCOUNT OF THE AS SESSEE. HOWEVER, THE LD.CIT(A) HAS ENHANCED THE SAID ASSESSMENT BY DIRECTING THE ASSESSING OFFICER TO ASSESS THE AGGREGATE AMOUNT OF DEPOSITS MADE IN TH OSE YEARS. THE LD.AR BY INVITING OUR ATTENTION TO THE BANK ACCOUNT OF THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAS WITHDRAWN HIS FUNDS ON EARLIER OCCASION AND USED THE SAID PROCEEDS TO MAKE DEPOSITS ON THE SUBSEQUENT DATE S . ACCORDINGLY, THE LD.AR SUBMITTED THAT THE ASSESSING OFFICER SHOULD HAVE ASCERTAINED THE PEAK CREDIT AMOUNT OF DEPOSITS MADE BY THE ASSESSEE IN THE ASSESSMENT YEAR 2004 - 05. HE FURTHER SUBMITTED THAT IN ASSESSMENT YEAR 2004 - 05, THE ASSESSEE HAS WITHDRAWN A SUM OF RS. 15.80 LAKHS AND USED THE SAME TO MAKE AGGREGATE DEPOSITS OF RS. 19 LAKHS . HE SUBMITTED THAT BALANCE AMOUNT OF RS. 3.20 LAKHS HAS BEEN MADE OUT OF THE INCOME OF THE ASSESSEE. ACCORDINGLY, HE SUBMITTED THAT THE LD. CIT(A) HAS CONFIRMED THE ADDITION WITHOUT APPRECIATING THIS FACTUAL ASPECT. 6 . WITH REGARD TO THE ADDITION MADE IN THE ASSESSMENT YEAR 2005 - 06, THE LD.AR SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ASSESSING THE AGGREGATE AMOUNT OF CASH DEPOSITS INSTEAD OF ASSESSING THE PEAK CREDIT OF THE DEPOSITS. HE FURTHER SUBMITTED THAT T HE TAX AUTHORITIES SHOULD HAVE CONSIDERED THE CASH AVAILABLE WITH THE ASS ESSEE IN THE IMMEDIATELY PRECEDING YEAR AND SHOULD HAVE DETERMINED THE INCREMENTAL PEAK CREDIT ONLY FOR SEEKING EXPLANATION OF THE ASSESSEE. ACCORDINGLY, HE SUBMITTED THAT IN THE ASSESSMENT YEAR 2005 - 06 ALSO THE ADDITION WAS MADE WITHOUT PROPERLY APPRECI ATING THE FACTS PREVAILING IN THE INS TANT CASE . 3 ITA NO. 1 02 & 103 /RAN/14 SRI VAIBHAV AGARWAL 7 . ON THE CONTRARY, THE LD.DR SUBMITTED THAT ASSESSEE HAS BEEN DEPOSITING THE FUNDS FIRST AND THEN MAKING THE WITHDRAWAL FOR MAKING THE DEPOSITS . HENCE, EXPLANATION FURNISHED BY THE ASSESSEE ARE CONTRAD ICTED TO THE FACTS PREVAILING IN THE INS T ANT CASE. HE FURTHER SUBMITTED THAT THE LD.AR IS MAKING NEW SUBMISSIONS AND THE SAME REQUIRES VERIFICATION AT THE END OF THE ASSESSING OFFICER. 8 . WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE AND PERUSED T HE RECORD. AS SUBMITTED BY THE LD.DR BEFORE US, WE ARE OF THE VIEW THA T THE EXPLANATION FURNISHED WITH REGARD TO THE PEAK CREDIT ON THE AVAILABILITY OF FUNDS OUT OF INCOME REQUIRES VERIFICATION AT THE END OF THE ASSESSING OFFICER. NORMALLY THE FUNDS W ITHDRAWN ON EARLIER OCCASION MAY BE ACCEPTED AS AVAILABLE WITH THE ASSESSEE F OR MAKING SUBSEQUENT DEPOSITS. IF IT IS FOUND THAT THE ASSESSEE HAS NOT UTILIZED THE FUNDS FOR ANY OTHER PURPOSE, THE FACTS PREVAILING IN THE PARTICULAR CASE THE AMOUNT OF UN EXPLAINED DEPOSITS DETERMINED I.E WHETHER THE AGGREGATE AMOUNT OF DEPOSIT HAS TO BE ASSESSED OR PEAK CREDIT HAS TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. IN THE INSTANT C A SE, ACCORDING TO THE LD.AR SUBMITTED THAT THE TAX AUTHORITIES HAVE NOT PROPE RLY APPRECIATED THE PREVAILING FACTS. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW, T HE ISSUE CONTESTED IN BOTH THE APPEALS BY THE ASSESSEE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE LD.C IT(A) ON THIS ISSUE IN BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE ISSUE AFRESH AFTER DULY CONSIDERING THE SUBMISSION/INFORMATION FURNISHED BY THE ASSESSEE AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW 4 ITA NO. 1 02 & 103 /RAN/14 SRI VAIBHAV AGARWAL 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE . PRONOUNCED ACCORDINGLY ON 01 - 12 - 2014 SD/ - SD/ - [ H.L. KARWA ] [ B.R. BASKARAN ] PRESIDENT ACCOUNTANT MEMBER DT. 01 - 12 - 2014 PLACE : RANCHI PP, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT : 2 THE RESPONDENT: 3. .THE CIT, 4.THE CIT(A), 5.DR, ITAT CIRCUIT BENCH, RANCHI 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT. REGISTRAR 5 ITA NO. 1 02 & 103 /RAN/14 SRI VAIBHAV AGARWAL 1. DATE OF DICTATION ............. 01 - 12 - 2014 ......... .............. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ........................OTHER MEMBER ..... 02 - 12 - 2014 ........................ 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. ..................... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT................................ 01 - 12 - - 2014 ................................................... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S ................ 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK ....................................... 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ......................................... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE O N THE ORDER ................................................................................................. 9. DATE OF DESPATCH OF THE ORDER ..............................................................