Shri Vijaykumar T. Jariwala, Surat V. The Income Tax Officer, Ward-5(2), Surat

ITA 1092/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5984 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Peak credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I R. P. TOLANI, VICE PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER VIJAYKUMAR T. JARIWALA, 9/317 - B, CHAKAWALA NI SHERI, CHORYASHI DAIRY, WADI FALIA, SURAT, PAN: ABCPJ5932D (APPELLANT) VS THE ITO, WARD - 5(2), SURAT (RESPONDENT) REVENUE BY : S H RI JAMES KURIAN , SR. D . R. ASSESSEE BY: S H RI M.K. PATEL , A.R. DATE OF HEARING : 06 - 04 - 2 017 DATE OF PRONOUNCEMENT : 24 - 04 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2009 - 10 , AR I SES FROM ORDER OF THE CIT(A) - I, SURAT DATED 22 - 01 - 2014 IN APPEAL NO. CAS - I/TFR - 5.104/139/2012 - 13 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 1092 / A HD/20 14 A SSESS MENT YEAR 200 9 - 10 I.T.A NO. 1092 /AHD/20 14 A.Y. 2009 - 10 PAGE NO VIJAYKUMAR T. JARIWALA VS. ITO 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND S OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT THE LEARNED COMMISSIONER OF THE INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION AND DIRECTING TO AO FOR W ORK OUT THE UNEXPLA INED SALE TRANSACTIONS OF BOTH T HE BANK ACCOUNTS AFTER DATES OR PEAK BALANCE AND COMPUTING GROSS PROFIT @16.05%. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF THE INCOM E TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.24000/ - ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWALS. 3. IN THIS CASE, RETURN OF INCOME DECLARING INCOME OF RS. 1 , 25 , 119/ - WAS FILED ON 26/03/2010. SUBSEQU ENTLY, THE CASE OF THE ASSESSEE W A S SELECTED FOR SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 19 - 08 - 2010. 4. BRIEF FACTS OF THE CASE AS PER THE GROUNDS OF APPEAL IN THE CASE OF THE ASSESSEE ARE AS UNDER: - GROUND NO. 1 5. THE ASSESSING OFFI CER RECEIVED AIR INFORMATION THAT ASSESSEE HAS MADE CASH DEPOSIT IN TWO SAVING BANK A/C WITH KARUR VAISHYA TO THE AMOUNT OF RS. 38,25,028/ - . THE ASSESSING OFFICER HAS ADDED THE PEAK AMOUNT OF TRANSACTIONS AND GROSS PROFIT @ 16.50% ON THE TOTAL CASH DEPOS IT . AGGRIEVED AGAINST THE ADDITION OF GROSS PROFIT @ I.T.A NO. 1092 /AHD/20 14 A.Y. 2009 - 10 PAGE NO VIJAYKUMAR T. JARIWALA VS. ITO 3 16.05% ON THE CASH DEPOSIT MADE BY THE ASSESSING OFFICER, THE ASSESSEE HAD PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING A S UNDER: - 2.3 I HAVE CONSIDERED THE FACTS OF THE ISSUE AND SUBMISSION OF APPELLANT. AS REGARDS THE ADDITION OF RS. 3,55,919/ - AS PEAK CASH BALANCE, APPELLANT HAS VOLUNTARILY ACCEPTED THE CONCLUSIONS DRAWN BY AO OF MAKING ADDITION, THEREFORE, THERE IS N O NEED TO FURTHER ADJUDICATE THIS ISSUE. IN RESPECT OF G.P. ADDITION, THE CONTENTION OF APPELLANT CANNOT BE ACCEPTED. SINCE HE HIMSELF HAS SHOWN THE G.P. RATE OF 16.05% IN HIS OWN REGULAR BUSINESS, THERE IS NO JUSTIFICATION OF CLAIMING G.P. @ 2% ON THE UN EXPLAINED SALE TRANSACTIO NS. HOWEVER, THE CONTENTION OF APPELLANT THAT THE G.P. ADDITION SHOULD BE TELESCOPED WITH THE ADDITION OF PEAK BALANCE CAN CONSIDERED. THE AO HAS TAKEN PEAK BALANCE AS ON 15 .09 - 2008 AT RS. 1,95,542/ - OF BANK ACCOUNT N O. 220 155000059064 AND RS. 1,60,377/ - AS ON 02.04.2008 OF BANK ACCOUNT NO. 2202172000000153, BUT, WHILE CALCULATING THE G.P., THE TRANSACTI ONS OF WHOLE OF THE YEAR FOR BOTH THE BANK ACCOUNT HAVE BEE N TAKEN . IN MY OPINION, FOR COMPUTI NG THE G.P. AMOUNT., AO WOUL D TAKE INTO CONSIDERATION THE SALE TRANSACTIONS AFTER THE DATE OF PEAK BA LANCES FOR THE REASON THAT WHILE TAKING PEAK BALANCES, THE G.P. ELEMENT IS ALREADY TAKEN INTO CONSIDER ATION. IN BANK ACCOUNT NO. 220155000059064, THIS DATE IS 15.09.2008 AND FOR BANK AC COUNT NO. 2202172000000153, IT IS 02.04.2008. THE AO IS DIRECTED T O WORK OUT THE UNEXPLAINED SALE TRANSACTIONS OF BOT H THE BANK ACCOUNTS AFTER THE DATES OF PEAK BALANCES AND COMPUTE THE GROSS PROFIT @ 16.05%. THIS GROUND IS P ARTLY ALLOWED. 6. WE HAVE H EARD THE RIVAL CONTENTIONS. WE NOTICED THAT DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS EXPLAINED THAT DEPOSIT IN BANK ACCOUNTS WERE ATTRIBUT ABLE TOWARDS THE TRADING ACTIVITIES. THE PREVAILING RATE OF GP IN THE CASE OF THE ASSESSEE WAS 1 6.05% AND THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE DURING THE I.T.A NO. 1092 /AHD/20 14 A.Y. 2009 - 10 PAGE NO VIJAYKUMAR T. JARIWALA VS. ITO 4 C OURSE OF ASSESSMENT PROCEEDINGS HAS NOT OPPOSED THE ADOPTING OF GP @ 16.05% ON THE UNACCOUNTED SALES TRANSACTIONS. WE CONSIDERED THAT THE LD. CIT(A) HAS CONCLUDED WITH REASONS THAT GP ELEM ENT IS TO BE TAKEN INTO CONSIDERATION ON THE TRANSACTIONS AFTER T HE DATE OF PEAK BALANCES. THEREFORE, IN VIEW OF THE ABOVE DETAILED FINDINGS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS OF THE LD. CIT(A). GROUND NO. 2 7. THE ASSESSING OFFIC ER HAS ESTIMATED THE HOUSE - HOLD WITHDRAWAL IN THE CASE OF THE ASSESSEE AT RS. 1 , 68,000/ - AS AGAINST RS. 1 , 44 , 000/ - SHOWN BY THE ASSESSEE. AGAINST THE DECISION OF THE ASSESSING OFFICER, THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO HAS SUSTA INED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THESES EXPENSES BEING L OWER SIDE. 8. WE HAVE HEARD THE RIVAL CONTENTIONS . WE OBSERVED THAT THE SUBMISSION OF THE ASSESSEE RE LATING TO THE LIVING STYLE OF THE FAMILY MEMBE RS OF LIVING MEDIO CRE LIFE AND NOT INCURRING EXPENSES ON VACATION ETC WERE NOT CONSIDERED WHILE ESTIMATING THE HOUSE HOLD WITHDRAWAL AS ABOVE. THEREFORE, AFTER TAKING INTO CONSIDERATION THE SUBMISSION OF THE ASSESSEE WE DELETE THE ADDITION OF RS. 24000/ - MADE ON ACCOUNT O F LOW HOUSE HOLD WITHDRAWAL . I.T.A NO. 1092 /AHD/20 14 A.Y. 2009 - 10 PAGE NO VIJAYKUMAR T. JARIWALA VS. ITO 5 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 24 - 04 - 201 7 SD/ - SD/ - ( R. P. TOLANI ) ( AMARJIT SINGH ) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD : DATED 24 /04 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,