Sh. Hansraj S/o Sh. Ishria, Faridabad V. ITO, Faridabad

ITA 1139/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7061 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 28-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SURESH BANSAL
• Keywords: Business income; Peak credit; Additional evidence
• Section: 144

Judgement Text

1 ITA 1139/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI: JUDICIAL MEMBER ITA NO. 1139/DEL/2014 ASSTT. YR: 2009-10 HANSRAJ S/0 SH. ISHRIA, VS. INCOME-TAX OFFICER, C/0 M/S BHATI WADHWA & CO.,CA, WARD -11(3), FARIDA BAD. 5N/1A, FIRST FLOOR, NEAR MCF MAYOR CAMP OFFICE, B.K. CHOWK NIT, FARIDABAD. PAN: AGBPR 4470 N ( APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI SURESH BANSAL CA & SHRI JITENDER WADHWA CA RESPONDENT BY : SMT. RITU SHARMA SR. DR DATE OF HEARING : 09/06/2016. DATE OF ORDER : 29/06/20126. O R D E R PER S.V. MEHROTRA, A.M: THIS IS ASSESSEES APPEAL AGAINST THE ORDER DAT ED 20.12.2013 PASSED BY THE LD. CIT(A), FARIDABAD IN APPEAL NO. 317/20 11-12, RELATING TO AY 2009-10. 2. GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS U NDER: 1) THAT THE ORDER OF THE LD. CIT (A) FARIDABAD IS B AD IN LAW AND ON FACTS. 2 ITA 1139/DEL/2014 2) THAT ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE THE APPELLANT DENIES HIS LIABILITY TO BE ASSESSED U/S 1 44 AND CONSEQUENTLY TO PAY TAX ON THEREON. 3) THAT ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE THE LD. CIT (A) FARIDABAD ERRED IN : A) REJECTING THE CLAIM OF THE APPELLANT FOR SURREND ER OF PEAK CREDIT OF THE CASH DEPOSITED IN TO THE BANK ACCOUNT S TO THE TUNE OF RS. 9, 20, 934/- MADE BEFORE THE LD. A. O. IN GO OD FAITH AND WHICH WAS DULY ACCEPTED BY THE LD. A.O. B) CONFIRMING THE ADDITION OF RS. 65, 42, 800/- WIT HOUT PURSUIT THE FACTS OF THE CASE FULLY AND PROPERLY. 4) THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD CIT (A) HAS ERRED IN LAW AND ON FACTS IN N OT REVERSING THE ACTION OF LD AO IN CHARGING INTEREST U/S 234 BA ND 234C OF THE INCOME TAX ACT, 1961. 5) THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODI FY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED RETURN DECLARING INCOME AT RS. 1,59,040/-. THE AO NOTICED THAT ASSES SEE WAS DOING SOME BUSINESS OF CATTLE FEED. HE NOTICED THAT GROSS RECE IPTS/ SALE DURING THE YEAR WAS SHOWN AT RS. 38,25,200/- ONLY, DECLARING BUSINE SS GAIN OF RS. 2,18,400/- AND THE RETURN WAS FILED AS RETAIL TRADERS U/S 44AF . AO OBTAINED AN INFORMATION FROM THE BANK. AFTER EXAMINATION OF THE SAME AND ON THE BASIS OF AIR INFORMATION NOTED THAT ASSESSEE HAD DEPOSITE D CASH OF RS. 65,42,800/- IN THE HDFC BANK, AGRA CHOWK, PALWAL AN D ICICI BANK LTD., 3 ITA 1139/DEL/2014 BOOTH NO. 104-105, DISTRICT CENTRE, SECTOR-16, FARI DABAD. AS THE ASSESSEE DID NOT COMPLY WITH VARIOUS NOTICES ISSUED BY AO, T HE AO COMPLETED THE ASSESSMENT U/S 144. HE NOTICED THAT ASSESSEE HAD N OT DECLARED ANY SALE DECLARING BUSINESS GAIN OF RS. 1,59,044/-. HE FURTH ER OBSERVED THAT NO DETAILS IN THIS REGARD WERE FURNISHED. HE OBSERVED THAT THE SAID TRANSACTIONS COULD NOT PERTAIN TO BUSINESS SINCE NO REGULAR TRADING PA TTERN OF BUSINESS WAS REFLECTED IN THE BANK STATEMENT BUT ONLY LUMP SUM D EPOSITS AND PAYMENTS WERE THERE. HE, ACCORDINGLY, MADE ADDITION OF RS. 65,42,800/-. 4. BEFORE LD. CIT(A), THE ASSESSEE FILED ADDITIONAL EVIDENCE UNDER RULE 46A, WHICH WAS FORWARDED TO AO FOR EXAMINATION, BO TH WITH REGARD TO THE ADMISSIBILITY OF ADDITIONAL EVIDENCE AND THE MERIT OF ADDITIONS MADE IN THE LIGHT OF ADDITIONAL EVIDENCE, SUBMITTED BY THE ASSE SSEE. AOS REPORT HAS BEEN REPRODUCED IN THE CIT(A)S ORDER, AFTER CONSIDERING WHICH LD. CIT(A) CONFIRMED THE ADDITION OF RS. 65,42,800/- ON ACCOUN T OF UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT, REJECTING THE ASSESSEE S SURRENDER OF PEAK CREDIT BALANCE OF RS. 9,20,934/- BEFORE AO IN REMAND PROCE EDINGS, INTER ALIA, OBSERVING THAT ON ONE HAND THE AO HAD RECOMMENDED REJECTION OF ADDITIONAL EVIDENCE AND HAS CONCLUSIVELY TRIED TO E STABLISH THE FACT THAT SOURCE OF CASH DEPOSIT COULD NOT BE SATISFACTORILY EXPLAINED, ON THE OTHER, HE HAS REFERRED TO THE SURRENDER OF PEAK CREDIT BALANC E IN HIS BANK ACCOUNT AND 4 ITA 1139/DEL/2014 PAYMENT OF TAX THEREON BY THE ASSESSEE. HE POINTED OUT THAT SINCE AO HAS NOT BEEN ABLE TO SUBSTANTIATE IN HIS REPORT AS TO WHY P EAK CREDIT BALANCE MAY BE ACCEPTED, THE ASSESSEES CONTENTION WAS TO BE REJEC TED. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORD OF THE CASE . IT IS NOT DISPUTED THAT ASSESSE WAS DOING THE BUSINESS OF CATTLE FEEDS. IN THE STATEMENT OF FACTS , FILED BEFORE LD. CIT(A), THE ASSESSEE HAD POINTED OUT THAT IT WAS IN THE BUSINES S OF RETAIL TRADING OF CATTLE FEEDS E.G. PEDDY, KHAL, CHOORI, CHILKA, GUD, JAWAR AND BARSAM ETC. AND ASSESSED WITH ITO, WARD 11(3), FARIDABAD. RETURN OF INCOME HAD BEEN FILED U/S 44AF, BY DECLARING BUSINESS INCOME OF RS. 2,18, 040/- AND TURNOVER OF RS. 30,25,200/-. IT WAS ALSO SUBMITTED IN THE STATE MENT OF FACTS THAT THE ASSESSEE DEPOSITED THE CASH OF RS. 72,65,400/- AND AT THE SAME TIME WITHDREW CASH OF RS. 64,04,556/- DURING THE RELEVAN T ASSESSMENT YEAR. DEPOSITS WERE PRIMARILY FROM WITHDRAWAL FROM BANK, SALE PROCEEDS AND REALIZATION DEBTORS. ASSESSEE HAD NOT MAINTAINED AN Y BOOKS OF A/C. 6. NOW THE ISSUE IS WHETHER ENTIRE DEPOSITS IN THE BANK COULD BE ASSESSED TO TAX, DISREGARDING THE AMOUNTS WITHDRAWN BY ASSES SEE OR NOT. ADMITTEDLY, NEITHER ANY OTHER SOURCE OF INCOME HAS BEEN POINTED OUT BY AO NOR ANY INVESTMENT OUT OF WITHDRAWALS FROM BANK HAS BEEN SH OWN. UNDER SUCH CIRCUMSTANCES, ASSESSEES EXPLANATION THAT BOTH THE BANK ACCOUNTS WERE IN 5 ITA 1139/DEL/2014 RELATION TO ITS BUSINESS, CANNOT BE DOUBTED. IN OUR OPINION, THE PEAK SURRENDERED BY ASSESSEE SHOULD HAVE BEEN ACCEPTED B Y LOWER REVENUE AUTHORITIES, IN THE ABSENCE OF BOOKS OF A/C. WE ORD ER ACCORDINGLY. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED ACCO RDINGLY. ORDER PRONOUNCEMENT IN OPEN COURT ON 29/06/2016. SD/- SD/- (BEENA A. PILLAI) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29/06/2016. *MP* COPY OF ORDER TO: 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI.