Shri Pradeep Shaw, Kolkata V. ITO, WD-42(1), KOLKATA, Kolkata

ITA 1172/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4533 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 26-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE CIT LD
• Assessee Lawyers: SUBASH AGARWAL LD
• Keywords: Salary income; Peak credit
• Section: 143(3); 142(1)

Judgement Text

1 IT A NO . 1172/KOL/2016 PRADEEP SHAW IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOLKATA BEFORE: SHRI J. SUDHAKAR REDDY , ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO . 1172 /KOL/201 6 A.Y: 20 10 - 11 SHRI PRADEEP SHAW VS. I.T.O. WARD 42(1), KOLKATA PAN: A URPS6951R [APPELLANT] [RESPONDENT] FOR THE APPELLANT : SHRI S UBASH AGARWAL , ADVOCATE, LD.AR FOR THE RESPONDENT : SHRI A . BHATTACHARJEE, ADDL.CIT, LD.SR.DR DATE OF HEARING : 1 7 - 05 - 2018 DATE OF PRONOUNCEMENT : 03 - 0 8 - 201 8 ORDER SHRI S.S. VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , 1 3 , KOLKATA DT. 2 9 - 02 - 2016 FOR THE A.Y 20 10 - 11. 2. THE ONLY EFFECTIVE ISSUE AMONGST THREE GROUNDS RAISED TO BE DECIDED AS TO WHETHER THE CIT - A HAS ERRED IN NOT ACCEPTING THE PEAK CREDIT IN RESPECT OF UNDISCLOSED BANK ACCOUNT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE IS AN INDIVIDUAL AND DERIV ES HI S INCOME FROM SALARY , OTHER SOURCES AND MISC. INCOME. THE ASSESSE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,62,380/ - . NOTICES U/S. 143(2) & 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO WHICH, THE A/R OF THE ASSESSE APPEARED AND FILED P & L ACCOUNT, BALANCE SHEET & BANK STATEMENTS RELATING TO PUNJAB NATIONAL BANK & UNITED BANK OF INDIA. ACCORDING TO AO, THE ASSESSE MAINTAINED ANOTHER BANK ACCOUNT WITH INDUS IND BANK LTD., WHEREIN HE FOUND CASH DEPOSITS OF RS.18,03,000/ - AND REQUESTED THE ASSESSE TO EXPLAIN THE SOURCE OF SAID CASH DEPOSITS. IN REPLY, THE ASSESSE STATED THAT HE IS ENGAGED IN TRADING OF VARIOUS TYPES OF AGRICULTURAL 2 IT A NO . 1172/KOL/2016 PRADEEP SHAW PRODUCE AND THE SAME WERE PURCHASED FROM LOCAL MARKET AND SOLD THEREIN. THE SALE PROCEEDS OF SUCH AGRICULTURAL PRODUCE WERE DEPOSITED IN THE ALLEGED BANK ACCOUNT AND ALSO EXPLAINED HIS INABILITY TO PRODUCE DOCUMENTARY EVIDENCE IN RESPECT OF TRADING ACTIVITIES I.E. REGARDING SALE , FURTHER THE PROFIT ARISEN OUT OF SUCH TRADING ACTIVITIES AMOUNTING TO RS. 1,16,600/ - HAS BEEN SHOWN IN THE RETURN UNDER THE HEAD MISC. INCOME AND PAID TAX THEREON. HOWEVER, THE AO DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE AND FOR NON - SUBMISSION OF ANY EVIDENCE REGARDING THE GENUINENESS OF SUCH ACTIVITY, ADDED THE ENTIRE CASH DEPOSI TS OF RS.18,03,000/ - TO THE TOTAL INCOME OF ASSESSE VIDE HIS ORDER DT. 18 - 03 - 2013 PASSED U/S. 143(3) OF THE ACT . 4. BEFORE THE CIT - A THE ASSESSE MADE THE SAME SUBMISSIONS AS MADE BEFORE THE AO AND ALSO ALTERNATIVELY FILED STATEMENT SHOWING PEAK CASH CREDIT OF RS. 6,47,491/ - AND REQUESTED THE CIT - A TO ACCEPT THE SAME. HOWEVER, THE CIT - A HAS NOT ACCEPTED THE SAME AND AS SUCH CONFIRMED THE ORDER OF AO IN MAKING THE IMPUGNED ADDITION. 5. BEFORE US THE LD.AR SUBMITS THAT THE CIT - A OUGHT TO HAVE CONSIDERED THE PE AK CREDIT , WHICH WAS OFFERED BEFORE HIM BY THE ASESSEE AND REFERRED TO THE PAPER BOOK CONTAINING STATEMENT SHOWING THE PEAK BALANCE AT PAGES 5 - 6 OF THE PAPER BOOK AND ALSO REFERRED TO BANK ACCOUNT OF INDUS IND BANK PLACED AT PAGES 7 - 13 OF THE PAPER BOOK A ND BY PLACING HIS RELIANCE ON THE ORDER DT. 02 - 07 - 2010 OF CO - ORDINATE BENCH, ITAT, KOLKATA, ITA NO. 169/KOL/09 FOR THE A.Y 2004 - 05 IN THE CASE OF MD. ASRAF ALI, ARGUED THAT THE PEAK OF AMOUNT OF DEPOSIT IN THE ALLEGED BANK ACCOUNT MAY BE CONSIDERED AS IN COME OF ASSESSE E . 6. ON THE OTHER HAND, THE LD. DR SUBMITS THAT THE ASSESSE DID NOT PROVE THE PURCHASE AND SOURCE OF SAID CASH DEPOSITS AS FOUND BY THE AO AND REFERRED TO PAGE - 7 OF THE CIT - A ORDER. HE RELIED ON THE ORDERS OF THE AO/CIT - A. 3 IT A NO . 1172/KOL/2016 PRADEEP SHAW 7. HEARD RIVAL SU BMISSIONS AND PERUSED THE RECORD. WE FIND ORDER DT. 02 - 07 - 2010 IN THE CASE OF SUPRA, THE CO - ORDINATE BENCH OF THIS TRIBUNAL HELD THAT THE PEAK AMOUNT AS FOUND FROM UNDISCLOSED ACCOUNT MAY BE CONSIDERED FOR TAXATION . WE FIND THAT THE ASSESSE FILED A STATEM ENT SHOWING PEAK AMOUNT BEFORE THE CIT - A AND THE PEAK AMOUNT AS SHOWN BY ASSESSE BEFORE THE CIT - A IS REASONABLE. IN THIS REGARD, WE MAY REPRODUCE PARA 5 OF THE ORDER DT. 02 - 07 - 2010 IN THE CASE OF SUPRA: - 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. THE SAID AMOUNT AGGREGATING TO RS.26,57,618 DEPOSITED IN THE STANDARD CHARTERED BANK, SALT LAKE BRANCH, KOLKATA WAS ADMITTEDLY NOT DISCLOSED IN THE BOOKS OF ACCOUNT. THE ASSESSEE HAS ALSO ADMITTEDLY FAILED TO DISCLOSE THE SOURCE OF THE DEPOSITS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN TREATING THE ENTIRE DEPOSITS IN THE SAID BANK ACCOUNT AS TRADING RECEIPTS IN ABSENCE OF ANY CORROBORATIVE MATERIALS FURNISHED BY THE ASSESSEE. IN SUCH VIEW OF THE MATTER, WE FIND SUBSTANCE IN THE CONTENTION OF THE LEARNED DR THAT NET PROFIT OF 5% OF THE SAID CASH DEPOSITS AND CHEQUES DEPOSITS COULD NOT BE CONSIDERED FOR ESTIMAT ING THE UNDISCLOSED INCOME OF THE ASSESSEE. HOWEVER, WE FIND THAT THE FACTS UNDISPUTED ARE THAT THERE WERE DEPOSITS AS WELL AS WITHDRAWALS FROM TIME TO TIME FROM THE SAID BANK ACCOUNT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE PEAK OF THE AMOUNT DE POSITED IN THE SAID UNDISCLOSED BANK ACCOUNT IN THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION SHOULD BE CONSIDERED AS UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDINGLY, WE MODIFY THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND DIREC T THE ASSESSING OFFICER TO ASSESS THE UNDISCLOSED INCOME OF THE ASSESSEE BY CONSIDERING THE PEAK AMOUNT OF DEPOSIT IN THE SAID UNDISCLOSED BANK ACCOUNT. WE ORDER ACCORDINGLY. 8. IN VIEW OF ABOVE AS HELD BY THE CO - ORDINATE BENCH IN THE CASE OF SUPRA, WE DE EM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF AO TO CONSIDER PEAK AMOUNT OF RS.6 , 47,491.37 AS SUBMITTED BEFORE THE CIT - A BY THE ASSESSE E FOR TAXATION. THE ASSESSE IS DIRECTED TO PRODUCE THE SAID DETAILS BEFORE THE AO FOR HIS CONSIDERATION. THUS, GROUNDS RAISED BY THE ASSESSE ARE ALLOWED FOR STATISTICAL PURPOSES. 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 03 - 0 8 - 2018 SD/ - SD/ - J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEM BER JUDICIAL MEMBER DATED : 03 - 0 8 - 2018 4 IT A NO . 1172/KOL/2016 PRADEEP SHAW PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. A PPELLANT /ASSESSEE : SHREE PRADEEP SHAW 14 RAJA SHRI RADHAKANTO DEB LANE, KUMARTULLY, KOLKATA - 700005. 2 RESPONDENT /R EVENUE : INCOME TAX OFFICER, WARD 42(1), 3 GOVT PL, KOLKATA - 700 001. 3. THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA