Smt. Manjulaben Champaklal Merchant, Surat V. The Income tax Officer,Ward-3(3), Surat

ITA 1155/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6003 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-04-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 19-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL SRDR
• Assessee Lawyers: SAPNESH SHETH

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.1155/AHD/2011 [ASSTT.YEAR : 2007-2008] SMT. MANJULABEN CHAMPAKLAL 8/A, PRADAKSHINA APARTMENT PRATISTHA COMPLEX PARLE POINT, SURAT 395 007. /VS. ITO, WARD-3(3) SURAT. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI SAPNESH SHETH + 2 3 )/ REVENUE BY : SHRI P.L. KUREEL, SR.DR 5 2 &(*/ DATE OF HEARING : 8 TH APRIL, 2014 678 2 &(*/ DATE OF PRONOUNCEMENT : 02-05-2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-2008 IS DIRECTED AGAINST T HE ORDER OF THE CIT(A)- II, SURAT DATED 27.1.2011. 2. THE ONLY EFFECTIVE GROUND OF THE APPEAL OF THE A SSESSEE IS GROUND NO.1, WHICH IS REPRODUCED HEREUNDER: 1. THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDIT ION OF RS.34,28,000/- MADE BY AO. ITA NO.1155/AHD/2011 -2- 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THIS GROUND OF THE APPEAL OF THE ASSESSEE CONSISTED OF TWO ADDITIO NS, VIZ. THE ADDITION OF RS.33,88,000/- ON ACCOUNT OF ASSESSEES SAVING BANK ACCOUNT WITH SURAT NATIONAL COOPERATIVE BANK, SURAT, (SNCB FOR SHORT ) WHICH WAS NOT DISCLOSED TO THE DEPARTMENT. THE OTHER ADDITION IS OF RS.40,000/- ON ACCOUNT OF DISCREPANCY IN THE FIGURE OF OPENING STO CK. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAVING BANK ACC OUNT WITH SNCB WAS NOT DISCLOSED IN THE ACCOUNT BOOK OF THE ASSESSEE, NOR WAS DISCLOSED TO THE DEPARTMENT. HOWEVER, THE ACTION OF THE AO IN ADDIN G THE AGGREGATE OF ENTIRE CREDIT ENTRIES IN THE SAID BANK ACCOUNT WAS NOT IN ACCORDANCE WITH LAW, AS IN SUCH CASES, THE ONLY PEAK AMOUNT COULD B E ADDED. HE SUBMITTED THAT IT IS A SETTLED LAW NOW THAT ONLY THE PEAK CRE DIT CAN BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE. HE HAS SUBMIT TED A COPY OF THE SAID SB ACCOUNT BEFORE THE TRIBUNAL. 4. THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF TH E LEARNED COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE C OULD NOT PROVE BY LEADING EVIDENCE TO THE EFFECT THAT THE CREDIT ENTR IES WERE OUT OF THE WITHDRAWALS MADE IN THE SAID UNDISCLOSED BANK ACCOU NT OF THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE HAS ADMITTED THAT TH E SAID BANK ACCOUNT WAS NOT DISCLOSED IN THE ACCOUNT BOOK OF THE ASSESSEE. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE FACT THAT SB A CCOUNT OF THE ASSESSEE WITH SNCB WAS NOT DISCLOSED IN THE ACCOUNT BOOK O F THE ASSESSEE NOR IT WAS DISCLOSED TO THE DEPARTMENT, COULD NOT BE CONTR OVERTED ON BEHALF OF THE ASSESSEE. HOWEVER, THE ACTION OF THE DEPARTMENT IN ADDING THE ENTIRE AGGREGATE OF THE CREDIT ENTRIES IN THE SAID BANK AC COUNT IS NOT IN ACCORDANCE ITA NO.1155/AHD/2011 -3- WITH THE SETTLED POSITION OF LAW. IN SUCH A CASE, ONLY THE PEAK AMOUNT OF ENTRIES COULD BE ADDED AS INCOME IN THE HANDS OF TH E ASSESSEE. SINCE THE ACCOUNT OF THE ASSESSEE WAS UNDISCLOSED TO THE DEPA RTMENT AND THE PEAK AMOUNT IS ADDABLE AS INCOME IN THE HANDS OF THE ASS ESSEE, THE PLEA OF THE REVENUE THAT THE ASSESSEE SHOULD PROVE THE CO-RELAT ION BETWEEN THE CREDIT AND DEBIT ENTRIES IN THE SAID BANK ACCOUNT, IS NOT SUSTAINABLE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN ACCORDANCE WI TH THE SETTLED LAW, WE DIRECT THE AO TO DETERMINE THE PEAK AMOUNT IN THE S AID SB ACCOUNT NO.1001926 WITH SNCB AND RESTRICT THE ADDITION TO THE PEAK AMOUNT ONLY, AND THIS PART OF THE GROUND OF THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 6. WITH REGARD TO THE OTHER ADDITION OF RS.40,000/- ON ACCOUNT OF INFLATION IN OPENING STOCK, NO ARGUMENT WAS ADDRESS ED ON BEHALF OF THE ASSESSEE BEFORE US, AND ACCORDINGLY, THE GROUND OF THE APPEAL OF THE ASSESSEE, WITH REGARD TO THE ISSUE OF THIS ADDITION OF RS.40,000/- ON ACCOUNT OF INFLATION IN OPENING STOCK FIGURE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( .. /G.C. GUPTA ) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD