ITO, New Delhi V. Shri Bharat Bhushan Gupta, Delhi

ITA 1159/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52601 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 04-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.1159/DEL/2011 ASSESSMENT YEAR : 2005-06 ITO, WARD 28(3), ROOM NO.214, DRUM SHAPE BUILDING, IP ESTATE, NEW DELHI. VS. BHARAT BHUSHAN GUPTA, PROP. M/S MODERN SANITARY STORE, 3252, GALI PEEPAL MAHADEV, HAUZ QUZI, DELHI. PAN : AAAPG4042N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAPIL GOEL, ADVOCATE REVENUE BY : SHRI A.K. MONGA, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 28 TH DECEMBER, 2010 FOR ASSESSMENT YEAR 2005-06. THE GROUNDS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) ERRED IN RESTRICTING THE ADDITION TO RS.3,85,172/- AGAIN ST THE ADDITION OF RS.14,72,770/- MADE BY THE A.O. IGNORING THAT THE SOURCE OF CASH DEPOSITS AND PURPOSE OF WITHDRAWALS HA VE NOT BEEN EXPLAINED BY THE ASSESSEE, NEITHER BEFORE THE ASS ESSING OFFICER NOR BEFORE LD. CIT (A) AND ALSO DO NOT COMME NSURATE WITH THE DECLARED BUSINESS OF THE ASSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT ( A) ERRED IN DIRECTING TO ADOPT PEAK OF CREDIT FOR ADDITION IGNORI NG THAT RELEVANT MATERIAL TO ESTABLISH THAT THE AMOUNT WITHDRAWN FRO M THE BANK HAS NOT BEEN UTILIZED ANYWHERE AND THE SAME HA S BEEN RECYCLED IN THE ACCOUNT, ARE NOT FURNISHED BY THE ASSES SEE. ITA NO.1159/DEL/2011 2 3. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND (S) OF APPEA L AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PURCHASE AND SA LE OF SANITARY GOODS UNDER THE NAME AND STYLE OF M/S MODERN S ANITARY STORE. THE ASSESSMENT ORIGINALLY FOR ASSESSMENT YEAR 2005-06 WAS FR AMED VIDE ORDER DATED 19 TH MARCH, 2007 PASSED U/S 143 (3) OF INCOME-TAX ACT, 1961 (THE ACT). LATER ON IT CAME TO THE NOTIC E OF THE DEPARTMENT THAT THE ASSESSEE HAS BEEN MAINTAINING A BANK ACCOUNT NO.054010100106245 WITH AXIS BANK (FORMERLY UTI BANK LTD.). THERE WAS AGGREGATE DEPOSIT OF ` 14,72,770/- IN THE SAID ACC OUNT AND THERE WERE ALSO CASH WITHDRAWALS OF ` 14,64,512/-. FOR THE REASON THAT THE SAID BANK ACCOUNT WAS NOT DISCLOSED, THE ASSESSMENT WAS REOP ENED AND AN ADDITION OF ` 14,72,770/- WAS MADE TO THE INC OME OF THE ASSESSEE ALREADY ASSESSED BEING UNEXPLAINED CASH DEPOSITS IN T HE AFOREMENTIONED BANK ACCOUNT. IT WAS THE CASE OF THE ASSESSEE THAT WHILE MAKING ADDITION THE ASSESSING OFFICER DID NOT GIV E CREDIT OF THE AMOUNT WITHDRAWN IN CASH FROM THE SAID ACCOUNT AND AD DITION, IF ANY, WAS TO BE MADE WITH RESPECT TO PEAK CREDIT. LEARNED CIT (A) AFTER EXAMINING THE DETAILS OF THE BANK ACCOUNT AND ON GOI NG THROUGH THE SUBMISSIONS MADE BY THE ASSESSEE HAS COME TO THE CONCLUSION T HAT ON ONE DATE MAXIMUM DEPOSIT IN THE SAID ACCOUNT REMAINED AT A SUM OF ` 3,85,172/- AND HE UPHELD THE ADDITION TO THAT EXTEN T AND BALANCE ADDITION HAS BEEN DELETED. THE DEPARTMENT IS AGGRIEV ED BY THE DELETED ADDITION AND, HENCE, HAS FILED THE AFOREMENT IONED APPEAL. 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LE ARNED AR OF THE ASSESSEE THAT THE ASSESSEE HAS ACCEPTED THE ORDER OF THE CIT (A) AND HAS NOT FILED ANY APPEAL. 4. ON THESE FACTS, BOTH THE PARTIES WERE HEARD. THE L EARNED DR, RELYING UPON THE ASSESSMENT ORDER, PLEADED THAT THE ASSESSE E COULD ITA NO.1159/DEL/2011 3 NOT EXPLAIN THE CASH DEPOSITS IN THE AFOREMENTIONED BA NK ACCOUNT. HE SUBMITTED THAT DURING THE COURSE OF ORIGINAL ASSESSMENT P ROCEEDINGS THE ASSESSEE DID NOT DISCLOSE THE AFOREMENTIONED BANK ACC OUNT AND, THEREFORE, THE ASSESSING OFFICER WAS RIGHT IN TREATING T HE ENTIRE CASH DEPOSITS IN THE SAID BANK ACCOUNT AS UNEXPLAINED INCOME OF THE ASSESSEE. 5. ON THE OTHER HAND, RELYING UPON THE FINDINGS RECO RDED BY THE LEARNED CIT (A), IT IS THE CASE OF THE LEARNED AR THA T LEARNED CIT (A) IS RIGHT IN SUSTAINING THE ADDITION ONLY TO THE EXTENT O F ` 3,85,172/- WHICH IS A MAXIMUM DEPOSIT AS ON A SPECIFIC DATE AND, THUS, RE LYING UPON THE PLEADINGS MADE BEFORE CIT (A), HE SUBMITTED THAT THE DEPARTMENTAL APPEAL DESERVES TO BE DISMISSED. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE COPY OF THE BAN K ACCOUNT HAS BEEN FURNISHED BY THE ASSESSEE AT PAGES 55-59 OF THE PAPER BOO K. WE HAVE GONE THROUGH THE SAID DETAILS AND WE FIND THAT THE MA XIMUM DEPOSIT IN THE BANK ACCOUNT COMES AT ` 3,85,172/- ON 26 TH JULY, 2004. THEREAFTER, THE BALANCE OUTSTANDING IN THE BANK ACCOUNT NEVER EX CEEDED THAT AMOUNT. THEREFORE, WE ARE OF THE OPINION THAT LEAR NED CIT (A) HAS RIGHTLY COME TO THE CONCLUSION THAT THE AMOUNT OF ` 3,85,172/- COULD ONLY BE ADDED TO THE INCOME OF THE ASSESSEE BEING UNEXP LAINED CASH DEPOSITS IN THE AFOREMENTIONED BANK ACCOUNT AS THE SOUR CE OF THE REMAINING DEPOSITS WILL BE ROTATION OF THE SAID AMOUNT ONLY. WE FIND NO REASON TO INTERFERE IN THE FINDINGS RECORDED BY THE L EARNED CIT (A) AND WE DECLINE TO INTERFERE. ITA NO.1159/DEL/2011 4 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 26.08.20 11. SD/- SD/- [B.C. MEENA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 26 TH AUGUST, 2011. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES