ITO, New Delhi V. Shri Prakash Chand, New Delhi

ITA 1233/DEL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7442 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 30-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 13-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Business income; Business expenditure; Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SH. N. K. SAINI , AM AND SH. H. S. SIDHU , JM ITA NO. 1233/DEL/2012 : ASSTT. YEAR : 2008 - 09 INCOME TAX OFFICER WAR D - 21(4), ROOM NO. D - 6, VIKAS BHAWAN, NEW DELHI - 1100 02 VS SHRI PRAKASH CHAND, H. NO. 151, VILL. MUKHMAL P UR, DELHI - 110036 (APPELLANT) (RESPONDENT) PAN NO. AEVPC9891E A SSESSEE BY : NONE REVENUE BY : SH. VIKRAM SAHAY, SR. DR DATE OF HEARIN G : 31 .12 . 2014 DATE O F PRONOUNCEMENT : 31 . 12 .2014 ORDER P ER N. K. SAINI , AM: THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 04.01.2012 OF LD. CIT(A) - X XII , NEW DELHI . 2. AT THE TIME OF HEARING NOBODY WAS PRESE NT ON BEHALF OF THE ASSESSEE NEITHER ANY ADJOURNMENT WAS SOUGHT, DESPITE OF THE FACT THAT THE NOTICE OF HEARING WAS SENT THROUGH THE DEPARTMENT TO THE ASSESSEE. WE, THEREFORE, PROCEEDED TO DECIDE THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LD. D R OF COURSE ON MERIT. 3. THE ONLY GROUND RAISED IN THIS APPEAL READ AS UNDER: WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF RS. 22,00,000/ - TO RS. 7,51,435/ - BY ACCEPTING THE EXPLANATION OF TH E ASSESSEE, DESPITE OF THE FACT THAT THE ASSESSEE HAS FURNISHED THREE DIFFERENT ITA NO. 1233/DE L/2012 PRAKASH CHAND 2 EXPLANATIONS AT THREE STAGES FOR SOURCES OF CASH DEPOSITS, DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 4 . THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED E - RETUR N OF INCOME DECLARING AN INCOME OF RS. 1,03,470/ - ON 10.03.2009. LATER ON, T HE CASE WAS SELECTED FOR SCRUTINY. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE BASIS OF AIR INFORMATION NOTICED THAT THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS. 22,00,000/ - ON VARIOUS DATES IN HIS SAVINGS BANK ACCOUNT WITH UNION BANK OF INDIA. THE EXPLANATION OF THE ASSESSEE REGARDING THE DEPOSIT WAS AS UNDER: THAT THE CASH DEPOSITED DURING THE YEAR FROM TIME TO TIME IS ON ACCOUNT OF ADVANCE MONEY RECEIVED FROM THE PROPERTY DEALERS, AS SUCH THE DEAL WAS NOT MATERIALIZED, THE CASH WAS RETURNED TO THEM BY WITHDRAWAL SELF/CHEQUE. 5 . THE AO WAS NOT SATISFIED FROM THE ABOVE EXPLANATION OF THE ASSESSEE AND MADE THE ADDITION OF RS. 22,00,000/ - . 6 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND FURNISHED THE WRITTEN SUBMISSION S DATED 12.12.2011 AND 04.01 .2012 WHICH READ AS UNDER: SUBMISSION DTD. 12.12.2011 IT IS HEREBY SUBMITTED THAT THE ASSESSEE IS DEALING IN THE BUSINESS OF TRADING OF LIVEST OCK, MILK AND VEGETABLES. THE BUSINESS IN WHICH THE ASSESSEE IS DEALING THERE ARE INVOLVEMENT OF VILLAGERS AND ALMOST ALL THE TRANSACTIONS INVOLVED ARE IN NATURE OF CASH TRANSACTIONS. ITA NO. 1233/DE L/2012 PRAKASH CHAND 3 AND DURING THE YEAR WHATEVER RECEIPTS HE HAS FROM TIME TO TIME FROM TH E SALE OF LIVESTOCK, MILK AND VEGETABLES ARE BEING DEPOSITED IN THE BANK AND WITHDRAWALS ARE FOR THE PURPOSE OF BUSINESS EXPENSES (I.E. PURCHASES AND OTHER ALLIED EXPENSES). AND DURING THE F. Y. 2007 - 08 THE ASSESSEE HAS FILED THE INCOME TAX RETURN HAVING B USINESS INCOME U/S 44AF OF THE I. T. ACT, 1961. THUS IT IS HEREBY SUBMITTED THAT DURING THE RELEVANT YEAR THERE WAS NEITHER ANY UNEXPLAINED CASH DEPOSITS NOR ANY CONCEALMENT OF INCOME BY THE ASSESSEE. YOUR HONOUR IS THEREFORE REQUESTED TO CANCEL THE DE MAND RAISED BY THE ASSESSING OFFICER BY HIS ORDER DTD. 27.12.2010. SUBMISSION DTD. 04.01.2012 IT IS HEREBY SUBMITTED THAT THE ASSESSEE IS DEALING IN THE BUSINESS OF TRADING OF LIVESTOCK, MILK AND VEGETABLES. THE BUSINESS IN WHICH THE ASSESSEE IS DEALIN G THERE ARE INVOLVEMENT OF VILLAGERS AND ALMOST ALL THE TRANSACTIONS INVOLVED ARE IN NATURE OF CASH TRANSACTIONS. AND DURING THE YEAR WHATEVER RECEIPTS HE HAS FROM TIME TO TOME FROM THE SALE OF LIVESTOCK, MILK AND VEGETABLES ARE BEING DEPOSITED CASH RS. 15,50,000/ - IN THE BANK AND WITHDRAWALS ARE FOR THE PURPOSE OF BUSINESS EXPENSES (I.E. PURCHASES AND OTHER ALLIED EXPENSES). BY MISTAKE THE BANK HAS CREDITED ON 17 TH AUGUST 2007 RS. 30,00,000/ - IN MY BANK STATEMENT BUT AFTER THAT THE BANK HAS DEBITED THIS AMOUNT. AND DURING THE F.Y. 2007 - 08 THE ASSESSEE HAS FILED THE INCOME TAX RETURN HAVING BUSINESS INCOME U/S 44AF OF THE I. T. ACT, 1961. THUS IT IS HEREBY SUBMITTED THAT DURING THE RELEVANT YEAR THERE WAS NEITHER ANY UNEXPLAINED CASH DEPOSITS NOR ANY CON CEALMENT OF INCOME BY THE ASSESSEE. YOUR HONOUR IS THEREFORE REQUESTED TO CANCEL THE DEMAND RAISED BY THE ASSESSING OFFICER BY HIS ORDER DTD. 27.12.2010. ITA NO. 1233/DE L/2012 PRAKASH CHAND 4 7 . THE LD. CIT(A) AFTER CONSIDERING T HE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE DEC LARED INCOME AT RS. 1,03,470/ - UNDER THE HEAD INCOME FROM OTHER SOURCES AND NO INCOME HAD BEEN DECLARED U/S 44AF O F THE I. T. ACT, 1961. T HEREFORE, THE TRANSACTIONS OF THE BANK ACCOUNT WERE NOT COVERED BY THE RETURN OF INCOME FILED BY THE ASSESSEE. THE L D. CIT(A) REPRODUCED THE DETAILS OF THE BANK ACCOUNT AT PAGE NOS. 5 & 6 OF THE IMPUGNED ORDER AND CAME TO THE CONCLUSION THAT THE PEAK BALANCE OF THESE DEPOSITS WAS AT RS. 7,51,435/ - AS ON 26.02.2008. HE ALSO POINTED OUT THAT THERE WERE CASH DEPOSITS AS WE LL AS CASH WITHDRAWALS OF EQUAL AMOUNTS IN THE BANK ACCOUNT AND AS SUCH THE PEAK DEPOSITS MADE BY THE ASSESSEE HAS TO BE TAKEN AS UNEXPLAINED CASH DEPOSITS. HE, ACCORDINGLY, RESTRICTED THE ADDITION OF RS. 7,51,435/ - . 8 . NOW THE DEPARTMENT IS IN APPEAL AG AINST THE RELIEF ALLOWED BY THE LD. CIT(A). THE LD. DR ALTHOUGH SUPPORTED THE ORDER OF THE AO BUT COULD NOT REBUT THE FINDINGS GIVEN BY THE LD. CIT(A). 9 . WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN TH E PRESENT CASE IT IS AN ADMITTED FACT THAT THE TRANSACTIONS RECORDED IN THE BANK ACCOUNT WERE NOT DISCLOSED BY THE ASSESSEE IN HIS RETURN OF INCOME. IT IS ALSO NOTICED THAT IN THE BANK ACCOUNT THERE WERE CASH DEPOSITS AS WELL AS CASH WITHDRAWALS AND CERTAI N TRANSACTIONS WERE OF THE EQUAL AMOUNTS. THEREFORE, IN SUCH TYPE OF CASES ENTIRE AMOUNT OF THE CASH DEPOSITS ON VARIOUS DATES CANNOT BE ADDED BUT THE PEAK OF THE DEPOSITS MADE BY THE ASSESSEE HAS TO BE TAKEN AS UNEXPLAINED ITA NO. 1233/DE L/2012 PRAKASH CHAND 5 CASH DEPOSITS. IN OUR OPINION TH E LD. CIT(A) RIGHTLY CONSIDERED THE S AME AS UNDISCLOSED INCOME OF THE ASSESSEE AND RESTRICTED THE ADDITION TO THAT EXTENT . WE DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS GIVEN BY THE LD. CIT(A). ACCORDINGLY, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT 10 . IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED . ( ORDER PRONOU N CED IN T HE OPEN COURT ON 31 /12 / 2014 ) . SD/ - SD/ - ( H. S. SIDHU ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED: 31 / 12 / 2014 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 31 .12 . 2014 PS 2. DRAFT PLACED BEFORE AUTHOR 31 .12 . 2014 PS 3. DRAFT PROPOSED & PLACE D BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9 . DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.