Sh. Baljinder Singh Bhatia, Ambala City V. ITO, Ambala

ITA 1254/CHANDI/2011

• Counselvise Citation: 125421514 RSA 2011
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 30-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: ANIL KUMAR BATRA
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: CHANDIGARH BENCH A BEFORE SHRI H.L. KARWA, V.P. AND SHRI MEHAR SINGH, AM ITA NO. 1254/CHD/2011 ASSESSMENT YEAR: 2008-09 BALJINDER SINGH BHATIA V. I.T.O. WARD 3, AMBALA 75, VIKAS VIHAR AM BALA CITY PAN: ABHPB 1995 K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIL KUMAR BATRA RESPONDENT BY: SHRI N.K. SAINI DATE OF HEARING: 14.2.2012 DATE OF PRONOUNCEMENT: 5.03.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE ASSESSEE FOR ASSES SMENT YEAR 2008- 09 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), ROH TAK DATED 17.11.2011 U/S 250(6) OF THE INCOME-TAX ACT (IN SHORT THE ACT). 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1 THE ORDER OF THE LD. CIT(A), IS BAD AGAINST FACT S AND LAW. 2. THE LD. CIT(A), WITHOUT APPRECIATING THE FACT A ND CIRCUMSTANCES OF THE CASE, HAS ERRED IN SUSTAINING THE ADDITION O F RS. 12,02, 860/- APPEARING AS CASH DEPOSITS IN THE BANK ACCOUNT AND IN REJECTING THE PLEA OF THE APPELLANT THAT THE ONLY ADDITION SUSTAI NABLE IS THE NETABLE PEAK OF FUNDS VIZ. RS. 4,86,960/-. THE CONTENTION OF THE APPELLANT BE ACCEPTED. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR DEL ETE ANY OF THE GROUNDS OF APPEAL BEFORE THE SAME IS TAKEN UP FOR F INAL HEARING. 3. IN THE COURSE OF APPELLATE PROCEEDINGS, THE LD ' AR' FOR THE ASSESSEE EXPLAINED THE DEPOSITS BY WAY OF CASH FLOW STATEMEN T AND REFERRED TO VARIOUS PAGES OF PAPER BOOK. THE LD 'DR' FOR THE R EVENUE, ON THE OTHER 2 HAND, CONTENDED THAT AS ON 11.1.2007 THE CASH OF RS . 1.00 LAKH WAS DEPOSITED IN THE CENTURIAN BANK. SIMILARLY, LD 'DR' FOR THE REVENUE POINTED OUT THAT ON 9.8.2007, PAYMENT OF RS. 3 LAKHS HAD BE EN MADE THROUGH CHEQUE AND HENCE, SUCH, CASH WAS NOT AVAILABLE WITH THE ASSESSEE. HE FURTHER ARGUED THAT CASH DEPOSITED, ON 8.8.2007, WA S IMMEDIATELY WITHDRAWN, ON 9.8.2007, AND HENCE SUCH CASH WAS NOT AVAILABLE, FOR THE BENEFIT OF AVAILABLE CASH WITH THE ASSESSEE, WHICH CAN BE SHOWN IN THE CASH FLOW STATEMENT. 4. WE HAVE ALSO PERUSED AND CONSIDERED THE DECISION OF ITAT MUMBAI I BENCH, IN THE CASE OF ITO V. SHRI JAYESH C. SHA H, MUMBAI IN ITA NO. 6057/MUM/2009, AY 2006-07. BRIEFLY STATED THE FACT S OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME AT RS. 90,8 10/-FOR ASSESSMENT YEAR UNDER REFERENCE. IN THE COURSE OF ASSESSMENT PROCE EDINGS, THE AO FOUND THAT THERE WERE CASH TUNE TO RS. 12,02,860/- DURING THE PERIOD UNDER REFERENCE IN THE BANK ACCOUNT OF THE APPELLANT MAIN TAINED WITH WITH CENTURION BANK OF PUNJAB ACCOUNT NO. 12020100001382 0/-. THE DETAILS OF CASH DEPOSITS ARE AS UNDER: DATE AMOUNT (RS.) 19.6.2007 10,000 8.8.2007 3,00,000 1.11.2007 1,38,210 13.11.2007 4,04,750 14.11.2007 2,00,000 11.01.2008 1,00,000 22.02.2008 49,900 TOTAL 12,02,860 4(1) REGARDING THE SOURCES FOR ABOVE DEPOSITS, THE APPELLANT SUBMITTED THAT THEY WERE MADE FROM THE CASH KEPT IN HIS HOUSE AFTER WITHDRAWING THE SAME FROM HIS BANK ACCOUNT WITH SBI, AMBALA CANTT, WHEREIN HE HAD DEPOSITED THE RETIREMENT BENEFITS, ON 31.3.2001. H E FILED A CERTIFICATE 3 ISSUED BY SBI AS PER WHICH THE DEPOSITS IN THE BANK ACCOUNT (ON ACCOUNT OF RETIREMENT BENEFITS ETC.) AS ON 31.3.2001 AMOUN TED TO RS. 19,51,851/-. 4.(2) THE AO REJECTED THE CONTENTIONS OF THE APPELL ANT ON THE FOLLOWING GROUNDS AND MADE ADDITION OF RS. 12,02,860/- AS UNE XPLAINED INVESTMENTS IN THE BANK ACCOUNT. THE AO MADE THE ADDITION ON T HE FOLLOWING GROUNDS:- (I) THE ARGUMENT THAT THE DEPOSITS IN THE BANK ARE FROM THE CASH KEPT AT HOME OUT OF THE RETIREMENT BENEFITS IS NOT ACCEPTABLE AS THE ASSESSEE HAS BEEN MAKING WITHDRAWALS FROM THE SAID BANK ACCOUNT. IF THE APPELLANT HAD CASH AT HOME, THERE IS NO NECE SSITY FOR MAKING SMALL WITHDRAWALS FROM THE BANK ACCOUNT. (II) THE RETIREMENT BENEFITS WERE DEPOSITED IN SBI ON 31.3.2001 AND IT DOES NOT STAND TO ANY REASON THAT THE SAME W ERE WITHDRAWN AND KEPT AT HOME FOR SUCH A LONG PERIOD JUST FOR DE POSITING AGAIN DURING THE FINANCIAL YEAR 2007-08. (III) NO CORRELATION BETWEEN THE WITHDRAWALS FROM S BI AND DEPOSITS IN CENTURIAN BANK COULD BE ESTABLISHED. 5. THE ABOVE ACTION OF THE AO WAS CONTESTED IN GROU ND NO. 2 OF THE CIT(A) APPEAL. BEFORE THE LD. CIT(A), THE LD. AR S UBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT PLEADED THAT APART FROM CASH DEPOSITS THERE WERE CASH WITHDRAWALS ALSO AND IF AN Y ADDITION TOWARDS UNEXPLAINED DEPOSITS WAS TO BE MADE, IT COULD BE TH E PEAK OF THE CREDITS ONLY. THE LD. AR FOR FURNISHED A CASH FLOW STATEME NT OF THE BANK FOR THE PERIOD 2.6.2007 TO 8.2.2008, BY TELESCOPING THE CAS H WITHDRAWALS, WHEREIN THE PEAK CASH DEFICIT (UNEXPLAINED CASH DEPOSITS) C OMES TO RS. 4,86,960/- AS ON 14.11.2007. WHILE WORKING OUT THE PEAK CASH DEPOSITS, IT WAS STATED THAT ENTRY DATED 22.2.2008 OF RS. 49,900/- W AS NOT TAKEN INTO ACCOUNT AS IT IS A TRANSFER ENTRY AND NOT CASH DEPO SITS. THE LD. AR REQUESTED THAT ONLY THE PEAK DEPOSITS OF RS. 4,86,9 60/- MAY BE BROUGHT TO TAX. 4 7. THE LD. CIT(A) CONSIDERED THE ISSUE AND THE SUBM ISSIONS MADE BY THE LD. .AR AND UPHELD THE FINDINGS OF THE AO. 8. ON A CAREFUL PERUSAL AND CONSIDERATION OF THE FA CTS REVEALS THAT THE ASSESSEE-APPELLANT DEPOSITED RS. 19,51,859/-, IN TH E SAVING BANK ACCOUNT, ON 31.3.2001, REPRESENTING RETIREMENT BENE FITS. THE ASSESSEE CONTENDS THAT CASH WAS WITHDRAWN FROM THIS ACCOUNT AND KEPT AT HOME AND THE SAME WAS DEPOSITED, IN THE CENTURIAN BANK, DURI NG FINANCIAL YEAR 2007-08. THIS EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE LD. CIT(A), AS WELL AS THE AO. HOWEVER, HAVING REGARD OF THE FACT SITUATION OF THE CASE, AND THE CASE LAW RELIED UPON BY THE ASSES SEE, WE ARE OF THE OPINION THAT HE ASSESSEE IS ENTITLED TO BENEFIT OF RS. 1.00 LAKH DEPOSITED, IN CASH AS IS EVIDENT FROM THE CASH FLOW STATEMENT. HOWEVER, THE ASSESSEE IS NOT ENTITLED TO TAKE BENEFIT OF CASH DE POSITED OF RS. 3.00 LAKH WHICH WAS IMMEDIATELY WITHDRAWN THROUGH CHEQUE AND HENCE SUCH CASH WAS NOT AVAILABLE WITH THE ASSESSEE, FOR MAKING DEP OSIT IN THE SAID BANK ACCOUNT, AS SHOWN IN THE CASH FLOW STATEMENT. THER EFORE, THE ASSESSEE GETS BENEFIT OF RS. 1.00 LAKH AND THE PEAK CREDIT H AS BEEN INCREASED BY RS. 3.00 LAKHS. THEREFORE, PEAK CREDIT IS WORKED O UT AT RS. 6,86,960/-. IN VIEW OF ABOVE DISCUSSION, THE ADDITION OF RS. 6,86, 960/- IS UPHELD. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED ON 5 .03.2012 SD/- SD/- (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNANT MEMBER CHANDIGARH, THE 5 .03.2012 SURESH COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 5