The ITO, Ward-14(1), Ahmedabad V. Shri Ashwin M.Shah, Ahmedabad

ITA 1246/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6925 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 27-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: GAURAV NAHATA
• Keywords: Peak credit

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.1246/AHD/2011 ( / ASSESSMENT YEAR : 2008-09) THE INCOME TAX OFFICER WARD-14(1) AHMEDABAD / VS. SHRI ASHWIN M.JAIN AG/14, RUSHIKA APARTMENT NR.SUJATA FLATS SHAHIBAUG, AHMEDABAD ' ./ ./ PAN/GIR NO. : AFYPJ 2406 E ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '%( / APPELLANT BY : SHRI V.K. SINGH, SR.DR &''%)( / RESPONDENT BY : SHRI GAURAV NAHATA, AR *) / DATE OF HEARING 28/11/2014 +,-.) / DATE OF PRONOUNCEMENT 19/12/2014 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XXI, AHMEDAB AD (CIT(A) IN SHORT) DATED 11/02/2011 PERTAINING TO ASSESSMEN T YEAR (AY) 2008-09. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE AMOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT WITH B ANK OF INDIA OF RS.13,58,300/- AND CASH DEPOSITED IN BANK ACCOUNT W ITH PROGRESSIVE MERCANTILE CO-OPERATIVE BANK LTD. OF RS.1,74,000/-. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.3,165,382/- ON ACCOUNT OF MARGIN MONEY PAID F OR SHARE TRANSACTIONS ENTERED IN TO BY THE ASSESSEE. ITA NO.1246/AHD /2011 ITO VS. SHRI ASHWIN M.JAIN ASST.YEAR 2008-2009 - 2 - 3. THE LD.CIT(A) HAS FAILED TO TAKE INTO CONSIDERATION THE GROUNDS AND LEGAL POSITION AS DISCUSSED BY THE AO IN THE ASSESS MENT ORDER DATED 13/12/2010. 4. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNE D CIT(A) MAY BE CANCELLED AND THAT THE ORDER OF THE ASSESSING OFFIC ER BE RESTORED. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 13/12/2010, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION OF RS.13,58,300/- ON ACCOUNT OF UNEXPLAINE D DEPOSITS IN BANK ACCOUNT WITH BANK OF INDIA. THE AO ALSO MADE ADD ITION OF RS.1,74,000/- ON ACCOUNT OF CASH DEPOSITS IN BANK ACCOUNT WITH PROGRESSIVE MERCANTILE CO-OPERATIVE BANK LTD. AND R S.3,16,382/- ON ACCOUNT OF INVESTMENT IN RESPECT OF UNEXPLAINED MAR GIN MONEY. 3. FIRST GROUND OF THE APPEAL IS AGAINST DELETION O F ADDITION MADE ON ACCOUNT OF CASH DEPOSITS IN BANK ACCOUNT WITH BANK OF INDIA AMOUNTING TO RS.13,58,300/- AND CASH DEPOSITS IN BANK ACCOUNT WITH PROGRESSIVE MERCANTILE CO-OPERATIVE BANK LTD. AMOUNTING TO RS.1 ,74,000/-. THE LD.SR.DR V.K.SINGH VEHEMENTLY ARGUED THAT THE LD.CI T(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIONS. HE SUPPORTED THE ORDER OF THE AO. 3.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE AO ON THE BASI S OF WHIMS AND FANCIES TREATED THE BANK DEPOSITS AS UNEXPLAINED. HE SUBMITTED THAT THE BANK DEPOSITS WERE MADE OUT OF CASH IN HAND. THE RE VENUE HAS NOT GIVEN ANY MATERIAL TO SUGGEST THAT THE FUND WAS NOT AVAIL ABLE WITH THE ASSESSEE ITA NO.1246/AHD /2011 ITO VS. SHRI ASHWIN M.JAIN ASST.YEAR 2008-2009 - 3 - FOR DEPOSITING INTO THE BANK ACCOUNT. THE LD.COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE REVENUE AND THE QUESTION WITH R EGARD TO WITHDRAWAL AND DEPOSIT ENTRIES MADE INTO THE BANK ACCOUNT, THE ASSESSEE HAS EVERY RIGHT TO OPERATE ITS BANK ACCOUNTS AS PER HIS CONVE NIENCE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT IN PARA-3.2 OF HIS ORDER BY OBSERVING AS UNDER:- 3.2. I HAVE CONSIDERED THE FACTS, SUBMISSIONS MADE BY THE APPELLANT SO ALSO ASSESSMENT ORDER. I FIND THAT THE APPELLAN T HAD DEPOSITED CASH IN THE BANK ACCOUNTS SO ALSO WITHDRAWN CASH FROM TH E SAME BANK ACCOUNTS. IT IS THE CONTENTIONS OF THE APPELLANT THAT THE CASH WITHDRAWN SO ALSO AVAILABLE CASH BALANCE WERE USED FOR DEPOSI TING CASH IN THE BANK ACCOUNT. THE A.O. HAS NOT BROUGHT ON RECORD A NY CORROBORATIVE EVIDENCE TO REBUT THE CONTENTION OF THE APPELLANT. THE ADDITION MADE INCLUDES RS.4,90,000/- BEING CASH DEPOSITS AND WITH DRAWN ON 12/09/2007, IS UNWARRANTED AS THE BANK ITSELF HAS S TATED THE SAME AS WRONG ENTRY ON ITS PART WHICH WAS RECTIFIED ON THE SAME DATE. THEREFORE, SUCH ENTRY CANNOT BE PART OF CASH DEPOSI TS. THE A.O. HAS EVEN NOT CONSIDERED PEAK CREDIT THEORY ON THE GROUN D OF ALLEGED UNACCOUNTED SHARE TRANSACTIONS. HOWEVER, THE A.O. HAS NOT BE ABLE TO SHOW ANY SUCH EVEN SINGLE EVIDENCE, THEREFORE AT MO ST PEAK CREDIT COULD BE APPLIED WHEN THE BANK ACCOUNTS ARE NOT ACCOUNTED BUT AS THE APPELLANT HAD KEPT AND MAINTAINED REGULAR BOOKS OF ACCOUNT, PEAK CREDIT THEORY CANNOT BE APPLIED. THE APPELLANT HAD PLACED ON RECORD COPY OF BALANCE SHEET, BANK STATEMENTS, BANK BOOKS, DETAILS OF SHARES HELD AS AT YEAR END SO ALSO DEMAT HOLDING STATEMENT IN SUPPORT OF HE WAS KEEPING REGULAR BOOKS OF ACCOUNT. COPY OF CASH FLOW AS PREPARED FROM CASH BOOK AND AS SUBMITTED TO A.O., IS ALSO FU RNISHED. I AM THEREFORE INCLINED TO AGREE WITH THE APPELLANT THAT IN ABSENCE OF ANY ADVERSE MATERIAL ON RECORD, NO ADDITION CAN BE MADE ON ESTIMATES, ACCORDINGLY THE ADDITION MADE OF RS.1358300/- BEING CASH DEPOSITED IN BANK OF INDIA AND RS.174000/- BEING CASH DEPOSITED IN PROGRESSIVE MERCANTILE CO-OP. BANK ARE HEREBY DIRECTED TO BE DE LETED. THE APPELLANT GET RELIEF OF RS.1532300/- IN THIS REGARD . ITA NO.1246/AHD /2011 ITO VS. SHRI ASHWIN M.JAIN ASST.YEAR 2008-2009 - 4 - 4.1. FROM THE ABOVE OBSERVATION OF THE LD.CIT(A), I T IS EVIDENT THAT HE HAS GIVEN A CATEGORICAL FINDING THAT THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO REBUT THE CONTENTION OF THE ASSESSEE T HAT THE CASH WITHDRAWN AND ALSO AVAILABLE CASH BALANCE WERE USED FOR DEPOS ITING IN THE BANK ACCOUNT. IT IS ALSO OBSERVED BY THE LD.CIT(A) THAT THE ADDITION INCLUDES RS.4,90,000/- BEING CASH DEPOSITS AND WITHDRAWN ON 12/09/2007 IS UNWARRANTED AS THE BANK ITSELF HAS STATED THE SAME AS WRONG ENTRY ON ITS PART WHICH WAS RECTIFIED ON THE SAME DATE. THESE F ACTS ARE NOT CONTROVERTED BY THE REVENUE BY PLACING ANY MATERIAL ON RECORD, THEREFORE WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE, SAME IS HEREBY UPHELD. THUS, THIS GROUND OF REVENU ES APPEAL IS REJECTED. 5. APROPOS TO GROUND NO.2, THE LD.SR.DR SHRI V.K .SINGH VEHEMENTLY ARGUED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DELE TING THE ADDITION AND STRONGLY SUPPORTED THE ORDER OF THE AO. 5.1. ON THE CONTRARY, THE LD.COUNSEL FOR THE ASSESS EE SUPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT DURING THE APPE LLATE PROCEEDINGS, LD.CIT(A) HAS VERIFIED EACH AND EVERY ENTRY AND HAS GIVEN A FINDING ON FACT WHICH IS NOT REBUTTED BY THE REVENUE BY PLACIN G ANY CONTRARY MATERIAL ON RECORD. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.1246/AHD /2011 ITO VS. SHRI ASHWIN M.JAIN ASST.YEAR 2008-2009 - 5 - WE FIND THAT THE LD.CIT(A) HAS DECIDED THIS ISSUE I N PARA-4.2 OF HIS ORDER BY OBSERVING AS UNDER:- 4.2. I HAVE CONSIDERED THE FACTS, ASSESSMENT ORD ER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT IN THIS REGARD. I FIND THAT THE APPELLANT HAD PLACED ON RECORD OF THE A.O. COPY OF ACCOUNT OF THE PARTIES FROM AMOUNT WERE ACCEPTED ALONGWITH PAN AND CONFIRMATION. THE A.O. HAS MERELY COMPARED CHEQUE DATES OF THE LO AN ACCEPTED WITH THE CHEQUE GIVEN OF MARGIN MONEY, WHICH IS NOT CORR ECT. THE APPELLANT HAS PLACED ON RECORD COPY OF BANK STATEMENT/PASSBOO K WHICH SHOW THE AMOUNT WERE CREDITED FIRST AND THEREAFTER CHEQUE OF RS.536362/- WAS CLEARED. THEREFORE, ALL MONEY ACCEPTED WERE PART O F THE MARGIN MONEY PAID. THE APPELLANT HAS GIVEN DETAILED SUBMISSION FOR EACH ADDITION ALONGWITH COPY OF BANK STATEMENT / CASH FLOW, ETC. THE A.O. HAS NOT MADE INQUIRY ABOUT THESE UNSECURED LOANS AND THEREF ORE GENUINENESS CANNOT BE DOUBTED IN THE LIGHT OF COMPLETE DETAILS AND CONFIRMATIONS SUBMITTED BY THE APPELLANT. THE APPELLANT COULD NO T FURNISHED ONE CONFIRMATION AS THE DEPOSITOR WAS OUT OF INDIA, AND THE FACT WAS STATED TO THE A.O. ALSO. MOREOVER, COPY OF CONFIRMATIONS OF ALL DEPOSITORS AS WELL AS PAN CARD COPY HAVE BEEN SUBMITTED BY THE AP PELLANT. FURTHER, THE APPELLANT IS NOT SUPPOSED TO SHOW SOURCE OF SOU RCE. THE DECISION RELIED UPON BY THE APPELLANT ALSO SUPPORTS HIS CASE . CONSIDERING ALL THESE FACTS AND IN THE LIGHT OF LEGAL DECISIONS, TH E ADDITION MADE BY THE A.O. OF RS.316382/- IS DIRECTED TO BE DELETED. THE APPELLANT GETS RELIEF OF RS.316382/-. 6.1. THE ABOVE FINDING OF THE LD.CIT(A) HAS NOT BEE N CONTROVERTED BY THE REVENUE BY PLACING ANY MATERIAL ON RECORD. IT IS CATEGORICALLY RECORDED BY THE LD.CIT(A) THAT THE ASSESSEE HAS GIV EN DETAILED SUBMISSION FOR EACH ADDITION ALONG WITH COPY OF BANK STATEMENT , CASH FLOW STATEMENT, ETC. BEFORE THIS TRIBUNAL ALSO, THE ASSESSEE HAS P LACED THE EVIDENCES WHICH WERE PLACED BEFORE THE LD.CIT(A). SINCE THE REVENUE HAS NOT CONTROVERTED THE SAME BY PLACING ANY CONTRARY MATER IAL ON RECORD, THEREFORE WE DO NOT SEE ANY REASON TO INTERFERE WIT H THE ORDER OF THE ITA NO.1246/AHD /2011 ITO VS. SHRI ASHWIN M.JAIN ASST.YEAR 2008-2009 - 6 - LD.CIT(A), SAME IS HEREBY UPHELD. THUS, THIS GROUN D OF REVENUES APPEAL IS REJECTED. 7. GROUND NOS.3 & 4 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. 8. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 19 TH OF DECEMBER, 2014 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 19/12/2014 2..,.../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-XXI, AHMEDABAD 5. 78& 45 , 45. , 3 / DR, ITAT, AHMEDABAD 6. 8:;<* / GUARD FILE. / BY ORDER, '7 & //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD