Sh. Santosh Walia, Kaithal V. ITO, Kaithal

ITA 1236/CHANDI/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63984 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 29-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S K MUKHI
• Keywords: Income from undisclosed sources; Salary income; Peak credit; Source of fund; Revised return
• Section: 148; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 1236/CHD/2010 ASSESSMENT YEAR : 2005-06 SHRI SANTOSH WALIA V I.T.O. WARD 3, S/O YUDHISTER WALIA KAITHAL HUDA KAITHAL AATPW 8230 H (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S.K. MUKHI RESPONDENT BY SHRI AKHILESH GUPTA DATE OF HEARING 08.10.2012 DATE OF PRONOUNCEMENT 17.10.2012 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A), KARNAL DATED 3.9.2010. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED VARIOUS G ROUNDS HOWEVER, AT THE TIME OF HEARING LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ONLY TWO DISPUTES ARE INVOLVED NAMEL Y (I) ADDITION ON ACCOUNT OF DEPOSITS IN THE BANK AMOUNT ING TO RS. 18,77,500/- AND (II) ADDITION ON ACCOUNT OF LOAN A MOUNTING TO RS. 50,000/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED RETURN OF INCOME DECLARING INCOME OF RS. 44,680/- + AGRICULTURAL INCOME OF RS. 60,000/- ON 30.3.2006. LATER ON AIR INFORMATION WAS RECEIVED BY THE AO SHOWING THAT THE ASSESSEE HAD MADE DEPOSITS IN BANK ACCOUNT WITH UNION BANK O F INDIA, THEREFORE, NOTICE U/S 148 WAS ISSUED ON 12.8.2008. IN RESPONSE TO WHICH FRESH RETURN WAS FILED AGAIN SHOW ING SALARY INCOME OF RS. 44,680/- + INCOME FROM OTHER SOURCES RS. 5723/- + AGRICULTURAL INCOME AMOUNTING RS. 1,60,000/- ON 1 2.9.2008. DURING ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKE D TO EXPLAIN THE SOURCE OF DEPOSITS AMOUNTING TO RS. 18, 77,500/- 2 AND IN RESPONSE TO WHICH IT WAS SUBMITTED THAT DEPO SITS WERE MAINLY OUT OF WITHDRAWALS FROM SAME BANK. THE ASSE SSEE IS WORKING AS A PEON WITH GOVERNMENT OF HARYANA IN CON STRUCTION DIVISION NO. 9 AT KAITHAL. IT WAS EXPLAINED THAT TH E ASSESSEE WANTED TO GO ABROAD FOR EMPLOYMENT AND ONE OF HIS F RIENDS ADVISED THAT FOR OBTAINING VISA HE (THE ASSESSEE) N EEDS TO SHOW GOOD BALANCE OF MONEY IN THE BANK, THEREFORE, DEPOSITS WERE MADE ON VARIOUS DATES AND THEN SAME MONEY WAS WITHDRAWN AND RECIRCULATED BY MAKING FRESH DEPOSITS . IT WAS EXPLAINED THAT MAXIMUM BALANCE ON ANY DATE I.E. PEA K DEPOSITS WAS RS. 4,80,197/- FOR WHICH SOURCES WERE EXPLAINED AS UNDER:- 1. DETAIL OF BUFFALO SALE SR NO DATE SOLD TO NUMBER OF BUFFALO AMOUNT (RS.) 1 16.4.2004 ASHWANI S/O SH. BHUSHAN 2 55,500 2 4.5.2004 SURESH S/O SH. ARJUN DASS 2 45,600 3 1.7.2004 ZHANDHU S/O SH. SOM PARKASH 2 50.250 4 24.7.2004 ASHWANI S/O SH, RAM KUMAR 2 60,200 2,11,550 2. DETAIL OF GOLD ORNAMENT SALE SR NO DATE SOLD TO RECEIPT NO. AMOUNT (RS.) 1 23.7.2004 M/S MUKESH JEWELLERS KURUKSHETRA 22 62653/- 62,653/- 3. DETAIL OF AGRICULTURAL LEASE SR NO NAME DATE OF RECEIPT AMOUNT (RS) 1 RAJ KUMAR S/O SH. AMAR SINGH 5.5.2004 80,000/- 80,000/- THE ASSESSEE FILED COPY OF J FORM FOR SALE OF AGR ICULTURAL PRODUCE, COPY OF SALE OF JEWELLERY FROM MUKESH JEWE LLERS AND ALSO PRODUCED THREE OUT OF FOUR PERSONS TO WHOM BUF FALOES WERE CLAIMED TO HAVE BEEN SOLD. IN RESPECT OF SALE OF JEWELLERY, A LETTER WAS WRITTEN BY AO TO MUKESH JEW ELLERS, RLY ROAD, KURUKSHETRA AND THE LETTER WAS RETURNED BY TH E POSTAL 3 AUTHORITIES WITH A COMMENT INCOMPLETE ADDRESS. T HE ASSESSEE WAS CONFRONTED WITH THE INFORMATION. IN R ESPONSE THE ASSESSEE SUBMITTED THAT IN THE MEANTIME THE JEWELER HAS CLOSED THE BUSINESS. SOME ENQUIRIES WERE MADE BY T HE INSPECTOR WHO REPORTED THAT FROM LOCAL ENQUIRIES N O SUCH SHOP EVER EXISTED. THEREFORE, AO DID NOT ACCEPT THE SOU RCE OF SALE OF JEWELLERY. 4. IN RESPECT OF AGRICULTURAL INCOME THE ASSESSEE F ILED THE COPIES OF GIRDAWARI AND J FORMS BUT IT WAS NOTICE D BY THE AO THAT AGRICULTURAL LAND BELONGED TO SHRI SAT PARKASH S/O SHRI SARDA RAM. IT WAS ALSO NOTICED THAT AGRICULTURAL I NCOME WAS DECLARED TO BE RS. 60,000/- IN ORIGINAL RETURN WHIC H HAS BEEN SHOWN AS RS. 1,60,000/- IN THE REVISED RETURN. IT WAS FURTHER EXPLAINED BY THE ASSESSEE THAT SHRI SAT PARKASH WAS AN UNCLE OF THE ASSESSEE WHO DID NOT HAVE ANY CHILD AND THER EFORE, HE HAS GIVEN THE LAND TO THE ASSESSEE AND AN AFFIDAVIT WAS FILED IN THIS REGARD. FURTHER IT WAS STATED THAT SHRI SAT P ARKASH HAS ALSO MADE A REGD WILL THROUGH WHICH ALL MOVEABLE AN D IMMOVEABLE PROPERTIES WERE GIVEN TO SHRI SANTOSH WA LIA I.E. THE ASSESSEE. THE AO DID NOT FIND FORCE IN THE SUB MISSIONS BECAUSE THE WILL WAS EXECUTED ON 11.12.2008 I.E. AF TER THE CASE WAS SELECTED FOR SCRUTINY. FROM THE ENQUIRIES IT WAS FOUND THAT SHRI SAT PARKASH, UNCLE OF THE ASSESSEE WAS RESIDING AT RAJPURA (PUNJAB) FOR THE LAST SO MANY Y EARS AND THE LAND BELONGED TO HIM WAS GIVEN ON LEASE AND HE COME S TO THE VILLAGE FOR COLLECTING THE LEASE. IN FURTHER EXPLA NATION IT WAS SUBMITTED THAT SHRI SAT PARKASH HAD A HOUSE AT RAJP URA BUT HE WAS NOT RESIDING THERE BUT THE LAND OF THE UNCLE WA S CULTIVATED BY THE ASSESSEE. SOME LAND BELONGED TO THE WIFE OF THE ASSESSEE. THE AO ULTIMATELY DID NOT ACCEPT THESE CO NTENTIONS BY MAKING FOLLOWING OBSERVATIONS: (I) AS PER COPY OF JAMABANDI FILED BY THE ASSESSEE , HE DOES NOT OWN ANY AGRICULTURAL LAND AS HIS NAME DOES NOT FIND PLACE IN THE JAMABANDI. (II) IN THE GIRDAWARI, THE AGRICULTURAL LAND SHOWN IN THE NAME OF DIFFERENT PERSONS OTHER THAN THE ASSESSEE HAS BEEN SHOWN UNDER SELF CULTIVATION. HENCE, THE ASSESSEE HAS NOT CULTI VATED THIS AGRICULTURAL LAND AS PER COPY OF GIRDAWARI. (III) SINCE THE ASSESSEE IS NOT HAVING ANY AGRICULT URAL LAND AS PER JAMABANDI FILED, THE RECEIPT OF LEASE MONEY (THEKA) FROM SHRI RAJ 4 KUMAR ON ACCOUNT OF LEASE OF AGRICULTURAL LAND IS T OTALLY BASELESS. MOREOVER, THE LEASE MONEY HAS BEEN SHOWN FOR THE PE RIOD FROM 10.11.2003 TO 14.4.2004 AND THE LEASE AMOUNT HAS BE EN SHOWN RECEIVED ON 5.5.2004 I.E. AFTER THE COMPLETION OF L EASE PERIOD WHICH IS UNBELIEVABLE AS THE LEASE MONEY IS ALWAYS RECEIVED IN ADVANCE BEFORE THE START OF LEASE PERIOD. (IV) THE ASSESSEE FILED A COPY OF WILL FROM HIS UNC LE, SHRI SAT PARKASH WHICH WAS EXECUTED ON 11.12.2008 I.E. AFTER SELECTION OF CASE UNDER SCRUTINY AND THIS WAS AN ATTEMPT OF THE ASSESSEE TO JUSTIFY HIS CLAIM. BUT THIS APPARENTLY AN AFTER TH OUGHT AND PROVES THE INTENTION OF THE ASSESSEE. (V) INSPECTOR OF THIS OFFICE HAS ALSO REPORTED THAT HIS UNDER IS RESIDING AT RAJPURA (PUNJAB) AND GIVES HIS AGRICULT URAL LAND ON LEASE AND COMES IN THE VILLAGE TO COLLECT THE LEASE MONEY. HENCE, THE ASSESSEES VERSION THAT HE CULTIVATES THE AGRIC ULTURAL LAND BELONGING TO HIS UNCLE AND HIS UNCLE IS RESIDING WI TH HIM IS TOTALLY INCORRECT. (VI) THE ASSESSEES FAILURE TO PRODUCE HIS UNCLE, S HRI SAT PARKASH WHO IS THE WITNESS FOR THE ASSESSEE, THE ON US THAT LAY ON THE ASSESSEE HAS NOT BEEN DISCHARGED. IN VIEW OF THE ABOVE OBSERVATIONS, AGRICULTURAL INC OME WAS NOT ACCEPTED. 5 AS FAR AS THE SALE OF BUFFALOES IS CONCERNED THE STATEMENTS OF SHRI SURESH S/O SHRI ARJUN DASS, SHRI ZHANDU S/O SHRI SOM PARKASH AND SHRI ASHWANI KUMAR S/O SHRI RA M KUMAR WERE RECORDED. IN ALL THESE STATEMENTS THE PURCHAS ER CONFIRMED THAT THEY HAVE PURCHASED THE BUFFALOES. HOWEVER, THERE WERE SOME DISCREPANCIES REGARDING THE ISSUE O F RECEIPT AND THE AO FURTHER OBSERVED THAT THESE PARTIES HAVE MEAGER SOURCE OF INCOME AND THEREFORE, SALE OF BUFFALOES COULD NOT BE ADMITTED. THE AO ALSO CONSIDERED THE ARGUMENTS OF PEAK DEPOSIT AND DID NOT ACCEPT THE SAME BECAUSE EXACT A MOUNTS WERE NOT WITHDRAWN WHICH WERE REDEPOSITED. IN FACT FOLLOWING OBSERVATIONS HAVE BEEN MADE IN THIS REGARD AT PARA 2(I) WHICH ARE AS UNDER: AS PER YOUR SAVING BAN ACCOUNT NO. 247 WITH UNION BANK OF INDIA, RKSD, KAITHAL, YOU HAD MADE CASH DEPOSITS OF RS. 18 ,77,500/- + RS. 50,000/- BY CLEARING DURING THE PERIOD 1.4.2004 TO 31.3.2005. IN THIS REGARD, YOU HAVE CONTENDED VIDE REPLY RECEI VED IN THIS OFFICE ON 3.12.2008 THAT YOU HAD DEPOSITED A SUM OF RS. 18,77,500/- AND HAD WITHDRAWN RS. 18,77,500/- FROM THE BANK MANY TIMES, BUT THE BANK BALANCE DID NOT EXCEED RS. 4,80,197/-. AS REGARDS, WITHDRAWAL FROM BANK ACCOUNT IT HAS BEE N CONTENDED BY YOU THROUGH YOUR COUNSEL VIDE REPLY DATED 29.6.2 009 THAT THE MAIN REASON FOR CASH WITHDRAWAL AND DEPOSITS IN BAN K ACCOUNT WAS GETTING VISA ONLY AS YOU WANTED TO GO TO FOREIGN. IT HAS ALSO BEEN ARGUED BY YOU THAT IT HAS BEEN MADE TO MAKE THE BAN K ACCOUNT SOUND SO AS TO GET PERMISSION EASILY. KEEPING IN V IEW THE ARGUMENTS GIVEN BY YOU AND FROM THE BANK ACCOUNT IT IS NOTICED THAT ON 12.5.2004 AND 14.5.2004, YOU WITHDREW RS. 2 5,000/- AND 5 RS. 96,000/- RESPECTIVELY TOTALING TO RS. 1,21,000/ - BUT DEPOSITED RS. 10,000/- ON 18.5.2004, RS. 8,000/- ON 21.5.2009 AND RS. 7,000/- ON 25.5.2004 TOTALING TO RS. 25,000/- ONLY. OUT OF TOTAL WITHDRAWAL OF RS. 1,21,000/-, YOU DEPOSITED RS. 25, 000/- ONLY ON DIFFERENT DATES AND THE AMOUNT OF RS. 96,000/- STIL L LEFT WITH YOU BUT ON 2.6.2004,,YOU WITHDREW RS. 17,000/-. FROM T HESE FACTS IT IS OBSERVED THAT THE AMOUNT WAS NOT WITHDRAWN FOR THE PURPOSE OF MAKING THE BANK ACCOUNT SOUND TO GO TO FOREIGN AS C LAIMED BY YOU. IF THIS SHOULD HAVE BEEN THE CASE, YOU MUST HAVE DE POSITED THE WHOLE AMOUNT OF RS. 1,21,000/- IN NEXT FEW DAYS IN THE BANK AND THERE WAS NO NEED TO WITHDRAW RS. 17,000/- ON 2.6.2 004. SIMILARLY, ON 4.9.2004 TO 13.9.2004, YOU WITHDREW R S. 2,25,000/- IN TOTAL, BUT DEPOSITED RS. 1,50,000/- FROM 15.9.2004 TO 18.9.2004 HAVING BALANCE OF RS. 75,000/- WITH YOU. BUT AGAIN YOU WITHDREW A SUM OF RS. 40,000/- ON 20.9.2004 AND DEPOSITED RS. 22,000/- IN TOTAL ON 24.9.2004 AND 28.9.2004. BY THIS WAY, YOU WERE LEFT WITH RS. 93,000/- (75,000/- + 18,000/- (40,000 22,000) BUT AGAIN YOU WITHDREW RS. 30,000/- ON 4.10.2004 AND RS. 1,00,000 /- ON 5.10.2004. BY THIS PRACTICE IT DOES NOT PROVE YOUR ARGUMENT THAT THE AMOUNT WAS FIRST WITHDRAWN AND THEN DEPOSITED I N THE BANK FOR THE PURPOSE TO GO TO FOREIGN. FROM THE ABOVE ENTRI ES, IT IS CLEAR THAT THE AMOUNTS HAVE BEEN WITHDRAWN FOR SOME OTHER PURPOSE WHICH HAS NOT BEEN DEPOSITED BACK IN THE BANK. WHA TEVER THE AMOUNT HAS BEEN DEPOSITED IN THE BANK ON DIFFERENT DATES, DO NOT HAVE ANY NEXUS WITH THE AMOUNT WITHDRAWN. MOREOVER , NO DOCUMENTS RELATING TO YOUR FOREIGN VISIT OR PLAN TO FOREIGN VISIT SUCH AS PASS PORT, COPIES OF AIR TICKETS ETC. HAVE BEEN FURNISHED BY YOU. IN SUCH CIRCUMSTANCES, PLEASE EXPLAIN AS TO WHY THE WHOLE AMOUNT OF CASH DEPOSITS OF RS. 18,77,500/- FROM THE PERIOD 1.4.2004 TO 31.3.2005 SHOULD NOT BE TREATED AS YOUR INCOME FROM UNDISCLOSED SOURCES. IN VIEW OF ABOVE OBSERVATIONS, TOTAL DEPOSITS MADE IN THE BANK AMOUNTING TO RS. 18,77,500/- WAS TREATED AS INCOME OF THE ASSESSEE. 6 ON APPEAL BEFORE THE LD. CIT(A), SIMILAR SUBMISSI ONS WERE REITERATED. IT WAS MAINLY ARGUED THROUGH WRITTEN S UBMISSIONS THAT THERE WAS A OPENING BALANCE IN THE BANK AMOUNT ING TO RS. 69,184 ON 1.4.2004 IN THE BANK ACCOUNT AND MOST OF THE CASH HAS BEEN ROTATED BY WITHDRAWING THE CASH AND THEN M AKING THE DEPOSITS. THE SOURCES FOR PEAK DEPOSITS OF RS. 4,8 0,197/- WERE EXPLAINED AS UNDER: PARTICULARS AMOUNT (RS) MAXIMUM BANK BALANCE DURING THE YEAR 4,80,197.00 LESS: INTEREST FROM BANK (ALREADY DECLARED IN RETURN) 2513.00 MAX AMOUNT ROTATED 4,77,684.00 SOURCE OF AMOUNT OPENING BANK BALANCE 69,184.00 OP. CASH IN HAND (CASH FLOW STATEMENT ALREADY SUBMITTED) 80,000.00 SALE OF GOLD ORNAMENTS 62653.00 OUT OF AGRICULTURAL INCOME (DECLARED IN THE RETURN) 80,000.00 SALE OF BUFFALOS 2,11,550.00 TOTAL 503387.00 6 IT WAS FURTHER ARGUED THAT THE ASSESSEE HAD PRODUCE D THE BILL FOR SALE OF JEWELLERY AND THE INSPECTOR HAS STATED THAT THIS SHOP NEVER EXISTED ON THE BASIS OF ENQUIRIES FROM VARIO US PERSONS BUT NAMES OF NONE OF THESE WITNESSES HAVE BEEN MENT IONED IN THE ENQUIRY REPORT. SIMILARLY THE ENQUIRY MADE BY THE INSPECTOR IN RESPECT OF SHRI SAT PARKASH ARE NOT RELIABLE PAR TICULARLY WHEN THE ASSESSEE HAD FILED THE COPY OF WILL OF SHR I SAT PARKASH AND ALSO HIS AFFIDAVIT THAT THE LAND WAS BE ING CULTIVATED BY THE ASSESSEE. IN RESPECT OF SALE OF BUFFALOS THAT THE ASSESSEE HAD PRODUCED THREE OUT OF FOUR PERSONS AND IT IS NORMAL PRACTICE IN THE VILLAGES THAT EVEN SMALL PEO PLE BUY BUFFALOS OUT OF THEIR SAVINGS AS WELL AS BY BORROWI NGS, THEREFORE, THE AO WAS WRONG IN REJECTING THIS CLAIM . IN ANY CASE THE ADDITION COULD HAVE MADE ONLY IN RESPECT O F PEAK DEPOSITS. 7 THE LD. CIT(A) REJECTED THE CLAIM OF THE ASSESSEE IN RESPECT OF SALE OF JEWELLERY BY OBSERVING THAT INS TEAD OF DISCHARGING ONUS OF PROVING SALE JEWELLERY THE ASSE SSEE WAS TRYING TO SHIFT THE ONUS WHICH IS NOT CORRECT. SIM ILARLY IN RESPECT OF AGRICULTURAL INCOME IT WAS OBSERVED THA T INITIALLY THE ASSESSEE HAD DECLARED AGRICULTURAL INCOME OF RS. 60 ,000/- WHICH WAS REVISED TO RS. 1,60,000/- U/S 148 OF THE ACT. FROM THE RECORD IT WAS FOUND THAT THE ASSESSEE WAS NOT O WNER OF THE LAND BECAUSE FOUR ACRES OF LAND BELONGED TO ONE SHR I SAT PARKASH. SINCE THE WILL WAS EXECUTED BEYOND THE DA TE ON WHICH ASSESSMENT WAS TAKEN UP FOR SCRUTINY, THEREFO RE, IT WAS ONLY A AFTER-THOUGHT PARTICULARLY THE ASSESSEE HAD NOT PRODUCED SHRI SAT PARKASH BEFORE THE AO. IN RESPECT OF TWO ACRES OF LAND OWNED BY THE ASSESSEES WIFE AND ANOTHER TWO A CRES IN NAME OF SHRI SUNIL KUMAR WAS ON BASIS OF AFFIDAVIT WITHOUT ANY DOCUMENTARY EVIDENCE AND THEREFORE, THIS WAS A SEL F SERVING EVIDENCE AND WAS REJECTED IN THE LIGHT OF THE DECIS ION OF HON'BLE SUPREME COURT IN CASE OF DURGA PARSHAD MORE V CIT, 82 ITR 540. IN RESPECT OF SALE OF BUFFALOS BECAUSE OF VARIOUS INCONSISTENCIES POINTED OUT BY THE AO, THE LD. CIT( A) ALSO CONFIRMED HIS FINDING BY MAKING FOLLOWING OBSERVATI ONS: 4.12 THE PLEA OF THE APPELLANT IS NOT TENABLE. THE AO DISCUSSED IN HIS ORDER THAT SOURCE OF ALLEGED PURCHASE OF 2 B UFFALOES STATED TO BE FROM THE MONEY PARTLY BORROWED FROM SOME PERS ONS, PARTLY FROM FATHER AND SAME FROM OWN SOURCES. APPARENTLY THERE IS 7 DIFFERENCE BETWEEN THE STATEMENT MADE BEFORE THE AO AND DURING APPEAL PROCEEDINGS. FURTHER AO NOTED THAT THE APPE LLANT WAS EVEN NOT AWARE OF THE NAME AND ADDRESS OF THOSE PERSONS FROM WHOM MONEY CLAIMED TO BE BORROWED BESIDES NO EVIDENCE OF MONEY STATED TO HAVE BEEN RECEIVED FROM FATHER WAS GIVEN. THE AO ALSO POINTED OUT THAT CONTRADICTIONS IN THE STATEMENT RE CORDED OF THE WITNESS. THESE FACTS HAS NOT BEEN DEALT WITH/ADDRE SSED THE APPELLANT IN THE WRITTEN SUBMISSIONS FILED DURING A PPEAL PROCEEDINGS. 4.13 SIMILAR IS THE POSITION IN THE CASE OF ANOTHER PERSON SHRI ZHANDU, WHO CLAIMED TO HAVE PURCHASED 2 BUFFALOES F OR RS. 50,250/-. THE AO DISCUSSED IN DETAIL THE FACTS IN PARA 5.1 OF THE ORDER TO REACH TO THE CONCLUSION THAT HE WAS NOT A MAN OF MEANS BESIDES STATING THE OTHER CONTRADICTIONS NOTED. TH ESE FACTS COULD NOT BE REBUTTED IN THE WRITTEN SUBMISSIONS FILED DU RING APPEAL PROCEEDINGS. THE APPELLANT TRIED TO BRUSH ASIDE TH E ISSUE BY MAKING A GENERAL STATEMENT THAT RS. 50,000/- IS NOT A BIG AMOUNT NOW A DAYS TO ARRANGE. 4.14 THE NEXT PERSONS IS SHRI ASHWINI KUMAR. THE A PPELLANT CLAIMED TO HAVE SOLD 2 BUFFALOES TO HIM FOR RS. 60, 200/-. THE AO DISCUSSED THIS IN PARA 5.2 OF HIS ORDER AND NOTED T HAT HE COULD NOT ESTABLISH THE AVAILABILITY OF RS. 60,200/- AT THAT TIME. THE APPELLANT AGAIN INSTEAD OF ESTABLISHING THE AVAILAB ILITY OF SAID FUND WITH THE PURCHASER MADE A GENRAL STATEMENT THAT IN THE WRITTEN SUBMISSIONS RS. 60,200/- IS NOT A BIG AMOUNT FOR A PERSON HAVING 8 ACRES AGRICULTURAL LAND. 4.15 THE APPELLANT COULD NOT PRODUCE THE 4 TH PERSON TO WHOM 2 BUFFALOES CLAIMED TO BE SOLD. THE APPELLANT AS SUC H HAS NOT BEEN ABLE TO ESTABLISH HIS CLAIM OF RECEIPT OF RS. 2,11, 550/- FROM SALE OF 8 BUFFALOES. FURTHER ONE NEEDS, INFRASTRUCTURE IN T HE FORM OF LAND, SHEDS/BUILDING AND MONEY ETC. TO KEEP 8 BUFFALOES WHICH WAS BOUND TO BE NOTED BY HIS NEIGHBOURS. THE INSPECTOR DEPUTED BY THE AO TO CONDUCT LOCAL ENQUIRIES, REPORTED THAT TH E APPELLANT HAS NOT DONE ANY BUSINESS OF PURCHASE AND S LE OF BUFFA LOES FOR THE PAST SO MANY YEARS. IT IS ALSO ENDORSED BY THE FAC T THAT THE APPELLANT HAS NOT DECLARED ANY SUCH INCOME IN HIS R ETURN OF INCOME OF LAST YEARS AND ALSO VIDE REPLY DATED 29.6.2009 F ILLED DURING ASSESSMENT PROCEEDINGS, CATEGORICALLY DENIED TO HAV E CARRIED OUT ANY BUSINESS. 4.16 IN VIEW OF THE FACTUAL POSITION DISCUSSED ABOV E, IT IS HELD THAT THE APPELLANT FAILED TO ESTABLISH ITS CLAIM OF GENERATION OF INCOME FROM SALE OF GOLD JEWELLERY, AGRICULTURAL AN D FROM SALE OF BUFFALOES AND HENCE HIS CLAIM IS REJECTED. 8 THE LD. CIT(A) ALSO REJECTED THE CONTENTS THAT AT BEST PEAK DEPOSITS CAN BE ADDED BY OBSERVING AT PARA 5.01 WHI CH IS AS UNDER: 5.1 THE PLEA OF THE APPELLANT IS EXAMINED. AT THE OUTSET THE APPELLANT HAS NOT BEEN ABLE TO BRING ANY EVIDENCE O N RECORD IN SUPPORT OF HIS THEORY THAT HE WANTED TO SETTLE ABRO AD AND FOR GETTING VISA, HE ROTATED SOME AMOUNT TO STRENGTHEN HIS BANK ACCOUNT. FURTHER, IT IS DIFFICULT TO APPRECIATE TH AT HOW WITHDRAWAL AND DEPOSITS OF THE SAME AMOUNT IN BANK COULD STREN GTHEN THE BANK ACCOUNT/STATEMENT OF PERSON. THE APPELLANT HA S ALSO NOT BEEN ABLE TO FURNISH ANY PLAUSIBLE EXPLANATION OF F URTHER WITHDRAWING THE AMOUNT FROM THE BANK IN SPITE OF AV AILABILITY OF THE AMOUNT EARLIER WITHDRAWN. FOR EXAMPLE, HE WITHDREW RS. 25,000/- ON 12.5.2004 AND RS. 96,000/- ON 14.5.2004. THE TO TAL WITHDRAWAL WAS AS SUCH RS. 1,21,000/- AND DEPOSITED RS. 25,000 /- ON DIFFERENT DATES UPTO 25.5.2004 AND AS SUCH AS PER HIS CLAIM, RS. 96,000/- SHOULD BE AVAILABLE WITH HIM BUT HE WITHDREW RS. 17 ,000/- ON 8 2.6.2004. THE ONLY INFERENCE WHICH CAN BE DRAWN IS THAT AMOUNT OF RS. 96,000/- WAS SPENT BY HIM. THE AO HAS DISCU SSED SOME OF THESE INSTANCES IN HIS LETTER DATED 20.8.2009 WHICH HAS BEEN REPRODUCED IN PARA 6 OF HIS ORDER AND ABOVE ALSO. THIS PLEA OF THE APPELLANT IS, THEREFORE, REJECTED BEING DEVOID OF ANY MERITS. IN THIS REGARD REFERENCE IS MADE TO THE DECISION OF TH E MP HIGH COURT IN THE CASE OF JHAMATMAL TAKHATMAL KIRANA MOREVANTS V. CIT, 152 CTR 311 (MP). THE HON'BLE COURT DECIDED THE SIMILAR ISSUE IN THIS CASE AND HELD AS UNDER: THE FACTS REMAINS THAT THE ASSESSEES EXPLANATION WAS FOUND UNTRUE BY ALL THE LOWER AUTHORITIES, THIS SHO WS ONLY THE EXTENT OF ASSESSEES CREDIBILITY AND THE WEAKNESS I N THE EXPLANATION FURNISHED BY IT. COUNSEL OF THE ASSESSE E HAS TRIED TO EXPLAIN THIS WITH REFERENCE TO THE QUESTIO N THAT IT WAS TO BE TAKEN AS A PEAK CREDIT. ONE FAILS TO UND ERSTAND THE THEORY OF PEAK CREDIT BEING USED IN THIS SET OF AFFAIRS WHEN IT IS MORE THAN APPARENT THAT WHY THE ASSESSEE -FIRM DEPOSITED SUM OF RS. 10,000/- ON 20 TH JAN 1977 AND WITHDRAWN IT ON 21 ST JAN 1977, DEPOSITED SUM OF RS. 11,000/- ON 21 ST JAN 1977 AND WITHDRAWN ON 27 TH JAN 1977; DEPOSITED SUM OF RS. 20,000/- ON 11 TH MAR 1977 AND WITHDRAWN ON 16 TH MAR 1977; DEPOSITED SUM OF RS. 5,000/- ON 3 RD MAY 1977 AND WITHDRAWN IT ON 4 TH MAY 1977; AND DEPOSITED A SUM OF RS. 3,000/- ON 9 TH NOV 1977 AND WITHDRAWN THE SAME ON 2 ND NOV 1977. THIS STATEMENT OF CREDITING AND DEBITING ITS ELF SHOWS THAT THERE IS NO QUESTION OF PEAK CREDIT INVOLVED I N THE MATTER. IT IS ONLY A MATTER OF JUGGLERY DEVISED BY THE ASSESSEE TO SOMEHOW EVADE THE INCOME-TAX. THEREFOR E, THE AUTHORITIES BELOW HAVE RIGHTLY APPROACHED THE MATTE R AND THERE IS NO GROUND TO INTERFERE. IT SEEMS BEFORE THE LD. CIT(A) THAT RELIANCE WAS PL ACED ON ASSESSMENT ORDER ONE SHRI LABH SINGH R/O KAITHAL WH EREIN IN SIMILAR CIRCUMSTANCES THEORY OF PEAK CREDIT WAS ACC EPTED BY THE AO, HOWEVER, THE LD. CIT(A) REJECTED THAT BY OB SERVING THAT EVERY CASE IS DIFFERENT. NO BENEFIT WAS GIVEN IN R ESPECT OF OPENING BALANCE OF RS. 80,000/-, OPENING BANK DEPOS ITS OF RS. 69,184/- BECAUSE NO EVIDENCE WAS PRODUCED AGAINST T HE SAME. 9 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE REITER ATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. HE VEHEMENTLY ARGUED THAT THE ASSESSEE IS ONLY A PEON WORKING IN GOVERNMENT OF HARYANA AND WANTED TO GO ABROAD. HE WAS ADVISED BY HIS FRIENDS THAT FOR OBTAINING VISA, HE NEEDS TO SHOW G OOD BANK ACCOUNT AND THEREFORE, THE ASSESSEE CIRCULATED HIS MONEY AND MADE CERTAIN DEPOSITS WHICH WERE ROUTINELY WITHDRAW N AND AGAIN DEPOSITED SO AS TO SHOW THAT THERE WAS SUFFIC IENT BANK TRANSACTIONS. HE REFERRED TO CASH FLOW STATEMENT A T PAGE 48 TO 63 WHICH CLEARLY SHOWS THAT MONEY WITHDRAWN HAS BEE N REDEPOSITED IN HIS BANK ACCOUNT. IN THIS REGARD HE INVITED OUR ATTENTION TO THE WRITTEN SUBMISSIONS MADE BEFORE TH E LD. CIT(A) WHICH HAVE BEEN EXTRACTED AT PAGE 7 OF HIS ORDER IN PARA 3 THROUGH WHICH IT WAS POINTED OUT THAT PEAK DEPOSIT WAS ONLY 9 RS. 4,80,197/- AND AFTER REDUCING THE INTEREST ON B ANK DEPOSITS STANDS AT RS. 4,77,684/-. OUT OF THIS THERE WAS A OPENING BALANCE OF RS. 69,184/- IN HIS BANK ACCOUNT AND THE RE WAS FURTHER OPENING CASH BALANCE OF RS. 80,000/-. REST OF THE MONEY CAME OUT OF SALE OF JEWELLERY RS. 62,653/-, OUT OF AGRICULTURAL INCOME RS. 80,000/- AND OUT OF SALE OF BUFFALOES RS. 2,11,550/-. HE SUBMITTED THAT THE ASSESSEE H AD ALREADY PRODUCED THE SALE BILL REGARDING SALE OF JEWELLERY BEFORE THE AO AND IF THE JEWELER CLOSES HIS SHOP THE ASSESSEE CAN NOT BE HELD IN FAULT. FOR AGRICULTURAL LAND HE SUBMITTED THAT THE ASSESSEES UNCLE SHRI SAT PARKASH WHO DOES NOT HAVE ANY CHILD, HAD PROMISED TO GIVE HIS LAND TO THE ASSESSEE. UNCLE, SHRI SAT PARKASH HAS ULTIMATELY EXECUTED A REGD WILL ALSO ON 2.12.2008. SHRI SAT PARKASH HAD ALSO GIVEN AN AFFI DAVIT TO THIS FACT WHICH WAS FILED BEFORE THE AO. THESE DOCUMENTS HAVE BEEN BRUSHED ASIDE BY STATING THAT SINCE THE WILL H AS BEEN EXECUTED AFTER THE SELECTION OF THE CASE FOR SCRUTI NY , THEREFORE, IT IS MERELY AN AFTER-THOUGHT. BUT NOBODY WOULD EX ECUTE A REGD WILL JUST TO HELP SOMEONE IN TAX MATTERS. HE ALSO SUBMITTED THAT THREE PERSONS OUT OF FOUR PERSONS TO WHOM THE BUFFALOES WERE SOLD, HAVE BEEN PRODUCED BEFORE THE AO AND WHOSE STATEMENTS WERE ALSO RECORDED IN WHICH THESE PARTIES HAVE CLEARLY ADMITTED THE FACT OF PURCHASING THE BU FFALOES BUT THIS SOURCE HAS BEEN REJECTED BY POINTING OUT SMALL DISCREPANCY WHICH ARE NOT RELEVANT. IN ANY CASE THE LOWER AUTH ORITIES HAVE WRONGLY REJECTED THE THEORY OF PEAK CREDIT WHICH HA S BEEN ACCEPTED EVEN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF NARESH KOHLI V CIT, 277 ITR 496. HE ALSO R EFERRED TO THE ASSESSMENT ORDER OF ONE SHRI LABH SINGH R/O KAI THAL WHICH HAS BEEN FILED ON RECORD WHEREIN PEAK INVESTMENT WA S ACCEPTED BY THE DEPARTMENT. 10 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE ST RONGLY RELIED ON THE ORDER OF AO AND THE LD. CIT(A). HE SU BMITTED THAT ONUS WAS ON THE ASSESSEE TO PROVE THE SALE OF JEWEL LERY AND SINCE THE LETTER WRITTEN BY THE AO WAS RETURNED, TH E ASSESSEE SHOULD HAVE PRODUCED THE JEWELER BEFORE THE AO WHIC H WAS NEVER PRODUCED, THEREFORE, THE AO HAS RIGHTLY REJEC TED THE SOURCE OF SALE OF JEWELLERY. SIMILARLY AGRICULTURA L LAND NEVER BELONGED TO THE ASSESSEE AND THE AO AS WELL AS THE LD. CIT(A) 10 HAS RECORDED A DETAILED FINDING AND THEREFORE, NO QUESTION OF ACCEPTING THE AGRICULTURAL INCOME. SIMILARLY LOT OF INCONSISTENCIES WERE FOUND IN THE STATEMENTS OF THE PERSONS WHO HAVE CLAIMED TO PURCHASE THE BUFFALOES AND THER EFORE, THEORY OF SALE OF BUFFALOES HAVE RIGHTLY BEEN REJEC TED. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AND FIND THAT SOURCE OF MONEY OUT OF SALE OF JEWELLERY CANNO T BE ACCEPTED BECAUSE THE ASSESSEE HAS NOT DISCHARGED HI S BURDEN OF PRODUCING THE JEWELER AGAINST WHOM LETTER WRITTE N BY THE AO WAS RETURNED UNDELIVERED. HOWEVER, AS FAR AS OPENI NG CASH AVAILABLE AND AGRICULTURAL INCOME AND SALE OF BUFFA LOES IS CONCERNED, THERE SEEMS TO BE SOME TRUTH IN SUCH SUB MISSIONS. HOWEVER, THERE WERE SOME INCONSISTENCIES AS RECORDE D BY THE AO OR THE LD. CIT(A) SO SOURCE OF FUNDS FROM THESE ITEMS CANNOT BE ACCEPTED AS SUCH. IN OUR OPINION, IN THES E CIRCUMSTANCES IT WILL BE PROPER THAT A LUMP SUM SOU RCE OF RS. 1,50,000/- ARE ACCEPTED. FURTHER THE PERUSAL OF THE CASH FLOW STATEMENT (AT PAGE 48 TO 63) AND BANK STATEMENT (AT PAGE 64 TO 66) CLEARLY SHOW THAT MONEY HAS BEEN WITHDRAWN IN C ASH ON VARIOUS DATES WHICH HAVE BEEN AGAIN DEPOSITED AND T HE PEAK DEPOSIT IS OF RS. 4,80,197/- ON 17.8.2005. THEREFO RE, AT BEST ONLY ADDITION COULD HAVE BEEN MADE FOR PEAK DEPOSIT S. THE HON'BLE PUNJAB & HARYANA HIGH COURT ALSO CONFIRMED THE DECISION OF THE TRIBUNAL IN CASE OF NARESH KOHLI V CIT (SUPRA) IN WHICH ADDITIONS WERE MADE ON THE BASIS OF PEAK INVESTMENT. PEAK CREDIT THEORY IS WELL ACCEPTED THEORY BECAUSE IT IS LOGICAL TO ASSUME THAT CASH WHICH HAS BEEN WITHDRAWN ON EAR LIER DATES, IS CLEARLY AVAILABLE FOR REDEPOSIT. IN THE CASE BEFORE US AS OBSERVED PEAK DEPOSIT IS ONLY RS. 4,80,197/- AND THEREFORE, ADDITION IS POSSIBLE ONLY FOR RS. 4,80,197/-. THIS AMOUNT ALSO INCLUDES INTEREST OF RS. 2513/- WHICH HAS TO BE RED UCED BECAUSE THE ASSESSEE HAS SHOWN THE INCOME. FURTHER THERE IS OPENING BALANCE OF RS. 69,184/- WHICH HAS TO BE RED UCED FROM THE PEAK DEPOSIT. THEREFORE, ADDITION SHOULD BE WO RKED AS UNDER: TOTAL PEAK DEPOSIT RS. 4,80,197/- LESS: OPENING BALANCE: RS. 69184/- INTEREST: RS. 2513/- ESTIMATED SOURCE OF 11 CASH AS OBSERVED ABOVE RS. 150000/- TOTAL RS. 221697/- RS. 2,21,697/- RS. 2,58,500/- THEREFORE, WE SET ASIDE THE ORDER OF LD. CIT(A) AN D CONFIRMED THE ADDITION OF RS. 2,58,500/-. 12 SECOND ISSUE PERTAINS TO CASH CREDIT AMOUNTING T O RS. 50,000/-. 13 AFTER HEARING BOTH THE PARTIES WE FIND THAT THE ASSESSEE HAD TAKEN LOAN OF RS. 50,000/- FROM SHRI PAWAN KUMA R. HOWEVER, THE ASSESSEE FAILED TO PRODUCE HIS PASS BO OK AND IT WAS STATED THAT SHRI PAWAN KUMAR HAS UNFORTUNATELY EXPIRED. BOTH THE PARTIES MADE ARGUMENTS IN RESPECT OF THIS ISSUE BUT SINCE THE CAPACITY OF DONOR TO LEND THE MONEY WAS N OT PROVED, THEREFORE, ADDITION OF RS. 50,000/- IS JUSTIFIED AN D ACCORDINGLY WE CONFIRM THE SAME. 14 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 17.10.2012 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 17.10. 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 12