Shri Pareshbhai Karshanbhai Sorathiya, Ahmedabad V. The Income tax Officer,Ward-8(3), Surat

ITA 1290/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8970 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 07-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Peak credit; Corroborative evidences; Onus to prove; Bogus loan
• Section: 143(3); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE: S H RI RAJPAL YADAV , JUDICIAL MEMBER AND SHR I AMARJIT SINGH , ACCOUNTANT MEMBER SHRI PARESHBHAI KARSHANBHAI SORATHIYA , 195, AMBIKA NAGAR - 2, OPP. AAROGYA KENDRA, KATARGAM ROAD, SURAT PAN: AXBPS 9579C (APPELLANT) VS THE ITO, WARD 8(3), SURAT (RESPONDENT) REVENUE BY : MR. ALOK KUMAR , SR. D . R. ASSESSEE BY: MR. KALPESH DOSHI , A.R. DATE OF HEARING : 07 - 03 - 2 01 7 DATE OF PRONOUNCEMENT : 27 - 03 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUN TANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2009 - 10 , AR IS ES FROM ORDER OF THE CIT(A) - V, SURAT DATED 31 - 01 - 2013 IN APPEAL NO. CAS/V/182/2011 - I T A NO . 1290 / A HD/20 13 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 2 12 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED THE ADDITION OF RS. 46,010/ - ON ACCOUNT OF DEPOSITS MADE IN THE BANK ACCOUNT. 2. THAT, THE LD. CIT(A) HAS WRONGLY CONFIRMED THE ADDITION OF RS. 19,37,590/ - AS UNEXPL AINED DEPOSITS IN THE BANK ACCOUNT. 3. IN THIS CASE , RETURN OF INCOME DECLARING INCOME OF RS. 158,000/ - WAS FILED ON 30 TH MARCH, 2010. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) ON 25 TH AUGUST, 2010. THE ASSES SEE WAS ENGAGED IN THE BUSINESS OF DIAMOND CUTTING, MAJURI WORK AND DIAMOND BROKERAGE. IT WAS NOTICED THAT T HERE WAS A DELAY OF 29 DAYS IN FILING OF THIS APPEAL BY THE ASSESSEE. IN THIS CONNECTION THE ASSESSEE HAS FILED AFFIDAVIT REQUESTING FOR CONDONING THE DELAY IN FILING THE APPEAL BECAUSE OF SERIOUS ILLNESS AND TIME TAKEN IN THE APPOINTMENT OF THE AUTHORIZED REPRESEN T ATIVE . WE CONSIDER THAT THE ABOVE CIRCUMSTANCES OF DELAY IN FILING THE APPEAL APPEARED TO BE BONA FIDE, THEREFORE, WE CONDONE THE DELAY OF 29 DAYS IN FILING THIS APPEAL BY THE ASSESSEE. BOTH THE GROUNDS OF APPEAL ARE INTERCONNECTED AND THESE ARE DECIDED TOGETHER AS UNDER. 4. BRIEF FACTS OF THE CASE ARE THAT D URING THE COURSE OF ASSESSING PROCEEDINGS, THE ASSESSING OFFICER NOTICED AS PER AIR INFORMATION THAT ASSESSEE HAD DEPOSITED CASH OF RS. 17, 42,300 / - IN THE SAVING I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 3 BANK ACCOUNT MAINTAINED WITH ICICI BANK. DURING THE COURSE OF ASSESSING PROCEEDINGS AT THE INITIAL STAGE THE ASSESSEE HA D DENIED TO HAVE BANK ACCOUNT WITH ICICI BA NK. THE ASSESSEE STATED HE WAS HAVING TWO BANK ACCOUNTS WITH S ARASWAT CO - OPE RATIVE BANK . ON FURTHER QUESTIONING ABOUT ANY OTHER BANK ACCOUNT , HE REVEALED THAT HE WAS HAVING ACCOUNT NO. 624401 086077 WITH ICICI BANK WHICH WAS MAINTAINED TILL 31 ST MARCH, 2008. HE AGAIN EXPLAINED THAT FROM THE PERIOD 01 - 04 - 2008 TRANSACTION S IN THE SAID BANK A/C WAS MADE FOR THE PURPOSE OF AYUSHI INVESTMENT (AOP) IN WHICH HE WAS ONE OF THE MEMBER. ON BEING SPECIFICALLY QUESTIONING ABOUT THE CASH DEPOSIT OF RS. 17 , 42 , 300 / - IN THE ICICI BANK A/C AND AFTER PERSUASION BY THE ASSESSING OFFICER, HE ULTIMATELY PROVIDED COPY OF STATEMENT OF SAVING BANK A/C. NO. 058401500739 MAINTAINED IN HIS NAME WITH ICICI BANK. HE FURTHER EXPLAINED THAT THIS BANK A/C. PERTAINED TO AYUSH I IN VESTMENTS (AOP) WHERE HE WAS ALSO ONE OF THE MEMBER AND IT OPENED IN HIS NAME AS THERE WAS NO BANK ACCOUNT IN THE NAME OF AOP. HE HAD ALSO SUBMITTED DEED OF THE AOP . THE ASSESSEE HAS CLAIMED THAT TWO MEMBERS OF THE AOP, SHRI SANDIPBHAI H. DOBARIYA BR OUGHT CAPITAL OF RS.4,10,000 AND SHRI VIRJIBHAI C. GAJERA B R OUGHT CAPITAL OF RS. 8,54,000/ - L FOR THE BUSINESS. THE ASSESSING OFFICER HAS EXAMINED BOTH THE PERSONS BUT THEY F AILED TO PROVE WITH SUPPORTING EVIDENCES THEIR CLAIM OF SOURCE OF ABOVE STATED CASH DEPOSIT FROM THE EARNING OF AGRICULTURE INCOME. REGARDING OTHER DEPOSIT FOUND IN THE TWO BANK A/CS OF ICICI, THE ASSESSEE EXPLAINED THAT MOSTLY THESE ARE IN TER ACCOUNT TRANSFER ONLY. REGARDING THE FOLLOWING DEPOSITS FOUND IN THE A/C NO. 6244 01086077 WITH ICICI BANK T HE ASSESSEE I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 4 STATED THAT THESE DEPOSITS WERE IN THE NATURE OF LOAN RECEIVED FROM THE FOLLOWING PERSONS: - SL. NO . DATE AMOUNT (RS.) NAME OF THE PERSON 1 18.08.2008 1010 SHRI S. DONGA 2 11.12.2008 15,000 SHRI AMRUT KOTHIA 3 13.0 2.2009 15,000 SHRI AMRUT KOTHIA 4 31.03.2009 5,000 SHRI AMRUT KOTHIA TOTAL 36010/ - IN ADDITIONS TO THE ABOVE DEPOSIT THE ASSESSEE ALSO COULD NOT PROVIDE ANY PROPER EXPLANATION REGARDING ONE MORE DEPOSIT OF RS. 10,000/ - MADE TO THE THIS BANK A/C 04 - 10 - 2008, THEREFORE, THE ASSESSING OFFICER HAS ADDED RS. 46 ,0 10/ - BEING UNEXPLAINED DEPOSIT IN THE BANK A/C WITH ICICI BANK. 5. R EGARDING CASH DEPOSIT OF RS. 1 , 95 , 290/ - IN THE BANK A/C 624401086077 AND CASH DEPOSIT OF R S. 17 , 42 ,3 00/ - IN THE BANK A/C NO. 058401500739 WITH ICICI BANK THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT TWO OTHER MEMBERS OF THE AOP, SHRI SANDIPBHAI H. DOBARIYA BROUGHT CAPITAL OF RS.4,10,000 AND SHRI VIRJIBHAI C. GAJERA B R OUGHT CAPITAL OF RS. 8,54,000/ - RESPECTIVELY. OUT OF THE TOTAL CASH DEPOSIT OF RS. 19 , 37 , 590/ - HE HAS EXPLAINED THAT CASH DEPOSIT OF RS.12,64000/ - HAS COME FROM THE TWO MEMBER S OF A OP AYUSHI INVES TMENT. THE ASSESSING OFFICER EXAMINED THESE TWO PERSONS REGARDING THEIR CLAIM OF GENERAT ING INCOME FROM I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 5 AGRICULTURAL ACTIVITIES AND FOUND THAT EXCEPT COPIES OF 7/12 OF AGRICULTURAL LAND , THEY HAVE NOT PRODUCED ANY OTHER EVIDENCE LIKE NATURE OF AGRICULTURAL LAND, EVIDENCES OF AGRICULTURAL INCOME GENERATED FROM AGRICULTURAL ACTIVITIES , COPY OF BILLS OF SALE FOR AGRICULTURE PRODUCTS ETC. THEREFORE , THE ASSESSING OFFICER HELD THAT ASSESSEE COULD NOT PROVE AND EXPLAIN ED THE CASH CREDIT OF RS. 19 ,37, 590/ - IN THE ICICI BANK A/C WHICH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT. 6. AGGRIEVED AGAINST THE IMPUGNED ORDER OF THE ASSESSING OFFICER THE ASSESSEE PREFERRED APPEAL BEFORE LD. C IT(A) .THE LD. CIT(A) HAD SUSTAINED THE ADDITION BY OBSERVING AS UNDER: - 6.1 I HAVE CONSIDERED THE ASSESSMENT ORDER AS WELL AS THE SUBMISSIONS OF THE APPELLANT. THE GROUNDS OF APPEAL - GROUND NO. 1 PERTAINS TO THE ADDITION OF RS.46,010/ - BEING THE AMOUNT OF UNEXPLAINED DEPOSIT IN BANK ACCOUNT. IN THE REPLY FILED ON 10/12/2012, THE APPELLANT SUBMITTED ON PAGE 2 OF HIS PAPER BOOK THAT HE IS NOT ABLE TO GIVE PROPER EVIDENCE REGARDING THE DEPOSITS OF RS.46,010/ - EVEN DURING THE APPELLATE PROCEEDINGS. SINCE THE APPELLANT HIMSELF HAS ADMITTED THAT HE IS NOT HAVING EVIDENCE TO PROVE THE SOURCE OF THE DEPOSITS OF RS.46,010/ - , THE ADDITION MADE BY THE AO IS UPHELD AND THE GROUNDS OF APPEAL IS DISMISSED.(CONFIRMED - RS.46,010/ - ) 6.2 THE GROUNDS OF APPEAL - GROUND NO. 2 PERTAINS TO THE ADDITION OF RS.19, 37,590/ - BEING THE AMOUNT OF UNEXPLAINED CASH CREDIT. THE CASH OF RS.I,95,290/ WAS DEPOSITED IN ACCOUNT LMO.624401086077 AND RS.17,42,300 IN A/C NO.058401500739 OF ICICI BANK TOTALING RS.19,37,590/ - . THE APPELLANT CONTE NDED THAT AN AOP WAS FORMED WITH TWO OTHER PERSON NAMELY SHRI SANDEEP H DOBARIYA AND SHRI VIRJIBHAI C GAJERA WHO HAD GOT THE CAPITAL OF RS.12,64,000/ - FROM THE AGRICULTURAL ACTIVITIES. IN SUPPORT OF HIS CONTENTION THE AFFIDAVIT OF THESE TWO PERSONS WERE AL SO FILED ALONG WITH THE PROOF OF AGRICULTURAL LAND HOLDINGS. ON THE PERUSAL OF THE DETAILS FILED, IT IS FOUND THAT THE I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 6 APPELLANT CLAIMED THAT THE ABOVE TWO PERSONS ARE HAVING INCOME FROM AGRICULTURE LAND. THE COPY OF THE AGRICULTURE LAND HOLDING WAS ALSO S UBMITTED WHICH IS JOINTLY IN THE NAME OF FAMILY MEMBERS. BUT THE APPELLANT WAS NOT ABLE TO PRODUCE ANY DETAILS OR EVIDENCE TO SHOW THAT THESE PERSONS CLAIMING TO HAVE AGRICULTURE INCOME HAVE THE CAPACITY TO MAKE SUCH HUGE CASH CONTRIBUTIONS. > NO DETAIL S OF PURCHASE O F, SEADS, FERTILIZER, PESTICIDES, ETC REQUIRED FO R GROWING OF AGRICULTURE PRODUCE IN FORM OF PURCHASE BILL/ CASH MEMO ETC. > NO EVIDENCE OF SALE OF AGRICULTURE PRODUCE SUCH AS KRISHI MANDI RECEIPT, BILLS/ VOUCHERS SHOWING DETAILS OF AGR ICULTURE PRODUCE SOLD. > THE PERSONS ARE NOT HAVING ANY OTHER SOURCE OF INCOME AS NO TAX RETURNS HAVE BEEN FILED WHERE THE INCOME FROM AGRICULTURE HAS ALSO BEEN SHOWN > NO BANK ACCOUNT STATEMENT WAS PRODUCED SHOWING INCOME ARISING FROM AGRICU LTURAL ACTIVITIES BEING DEPOSITED ON REGULAR BASIS. > NO PAN OF AOP HAS BEEN TAKEN > NO RETURN OF INCOME OF AOP HAS BEEN FILED. > NO BOOKS OF ACCOUN TS OF AOP HAS BEEN PRODUCED 6 .2.1 MERE FLING OF PAPERS SHOWING AGRICULTURE LAND HOLDING THAT TOO IN SEVERAL NAMES DOES NOT PROVE THAT THE CAPACITY TO MAKE HUGE CASH DEPOSITS OF THESE TWO PERSONS. THESE TWO PERSON WERE ALSO NOT ABLE TO PRODUCE ANY EVIDENCE TO SHOW THE AVAILABILITY OF SUCH HUGE AMOUNT OF CASH AVAILABLE WITH THEM FOR MAKING CASH DEPOSITS . THE CONDUCT OF SHRI VIRIJBAHI C SHAH, OF DENIAL OF ANY KNOWLEDGE REGARDING AOP, IN THE STATEMENT ON OATH RECORDED U/S 131 OF IT ACT SHOWS THAT THE TRANSACTIONS ARE NOT GENUINE AND IT IS A MAKE BELIEVE STORY. ANOTHER FACT WHICH PROVES THAT THE WHOLE SUBMI SSION IS AN AFTERTHOUGHT, IS THE CLAUSE 3 OF THE DEED OF AOP OF AYUSHI INVESTMENT DATED 31.03.2008, WHEREIN IT IS MENTIONED THAT BANK ACCOUNT NO.058401500739 IN ICICI BANK IN NAME OF APPELLANT WILL BE USED FOR BUSINESS BY AOP. INTERESTINGLY, THE BANK ACCOU NT OPENING FORM SHOWS THAT THE SAID BANK ACCOU NT IN ICICI BANK WAS OPENED ON 12. 05.2008 I.E 44 DAYS AFTER THE SIGNING OF THE AOB DEED WHICH SHOWS THAT AOP DEED WAS ANTE - DATED/BACK DATED TO SHOW THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNTS. 6.2.2 THE A FFIDAVITS HAVE BEEN FILED BY THE APPELLANT IN SUPPORT OF THE CASH DEPOSITS. BUT MERE FILING OF AFFIDAVITS DOES NOT PROVE THAT THE I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 7 SUBMISSIONS MADE BY THE PERSON SWEARING THE AFFIDAVIT IS TRUE AND CORRECT. IT IS A SETTLED LAW THAT AFFIDAVIT NEED NOT ALWAYS BE ACCEPTED AS CORRECT. IT IS NEITHER A RULE OF PRUDENCE NOR RULE OF LAW THAT THE STATEMENTS MADE IN AN AFFIDAVIT WHICH REMAINS UNCONTROVERTED MUST INVARIABLY BE ACCEPTED AS TRUE AND RELIABLE. ORDINARILY IN ABSENCE OF DENIAL, THE STATEMENTS MAY BE ACCEPTED AS TRUE BUT IF THERE ARE CIRCUMSTANCES WHICH SUGGESTS THAT STATEMENTS ON AFFIDAVIT SHOULD NOT BE ACCEPTED AS TRUE, THE ABSENCE OF DENIAL BY THE OTHER SIDE, WOULD NOT BY ITSELF BE SUFFICIENT TO CLOTHE THE STATEMENTS ON AFFIDAVIT WITH TRUTHFULNESS AND RELIA BILITY. 6.2.3 IN THE CASE OF SILK MUSEUM V/S CIT 257 ITR 22 (GUJ) THAT AFFIDAVIT IS A PIECE OF EVIDENCE WHICH ALONG WITH OTHER MATERIAL ON RECORD HAS TO BE TAKEN INTO CONSIDERATION BEFORE ARRIVING AT A FINDING. A STATEMENT OF THE DEPONENT CAN BE HELD TO B E UNRELIABLE EITHER ON THE BASIS OF CROSS EXAMINATION OF THE DEPONENT OR BY REFERENCE TO OTHER MATERIAL ON RECORD. SIMILAR VIEW HAS BEEN TAKEN IN THE CASE OF GUNWANTIBAI RATILAL V/S CIT 146 ITR 140 (MP). 6.2.4 IN THE CASE OF SUNDER INDUSTRIES V/S GENERAL ENGINEERING WORKS AIR 1982DEI220, PP223, THE HON. COURT HELD THAT 'AFFIDAVITS ARE EITHER AFFIRMED AS TRUE TO KNOWLEDGE OR FROM I NFORMATION RECEIVED PROVIDED THE SOURCE OF INFORMATION IS DIS CLOSED OR AS TO WHAT THE DEPONENT BELIEVES TO BE TRUE PROVIDED THE GROUNDS FOR SUCH BELIEF ARE SATED. IF AN AFFIDAVIT LACKS SUCH VERIFICATION, IT IS OF NO USE'. SIMILAR 'VIEWS HAVE BEEN EXPRESSED IN CASE OF AKK NAMBIAR V/S UOI AIR 1970 SC652 AND BARIUM CHEMICALS LTD V/S CLB AIR 1967 SC 295 . 6.2. 5 IN THE CASE OF BIOWELL AUTO P LTD V/S ACIT (P&H) 11 DTR 91 THE HON. COURT HELD THAT 'ASSESSEE FILED AFFIDAVIT OF CREDIT ORS M WHICH THEY CONFORMED THE L OAN TRANSACTIONS BUT DID NOT DISCLOSE THEIR SOURCE OF INCOME. SINCE THE CREDITWORTHINESS AND GENUINENESS OF TRANSACTION NOT ESTA BLISHED, ADDITION U/S 68 JUSTIFIED . 6 .2.6 THE APPELLANT HAS ALSO CONTENDED THAT THE TOTAL CASH DEPO SITED IS ONLY OF RS. 13,10,010/ - ON THE BASIS OF PEAK CREDIT TAKEN. BUT THE APPELLANT HAS NOT PROVIDED ANY SUPPORTING DOCUMENT TO DEMONSTRATE THE CLAIM OF PEAK CREDIT EXCEPT FOR A PRINT OUT OF CASH BOOK AND BANK BOOK. MERE FILING OF CASH BOOK AND BANK BOOK DOES NOT DISCHARGE THE BURDEN OF PROOF VIS - A - VIS PEAK CREDIT. THE APPELLANT'S CLAIM OF APPLYING PEAK CREDIT IS WITHOUT ANY MATERIAL OR BASIS. AN, ANALYSIS OF I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 8 THE PEAK CREDIT CONCEPT WILL CLARIFY THAT THE APPELLANT'S CLAIM IS NOT VALID. THE CONCEPT OF PEAK, CREDIT HOLDS THAT SOMETIMES, AN ASSESSEE MAY CONDUCT HIS UNACCOUNTED TRANSACTIONS THROUGH ONE OR MORE BANK ACCOUNTS OR MAY RECORD SUCH TRANSACTIONS IN A VAGUE MANNER IN ONE OR MORE BOOKS. THE DEPOSITS IN SU CH BANK ACCOUNTS MA Y REFLECT. UNACCOUNTED SALES. ; UNACCOUNTED CASH INTRODUCED. : UNACCOUNTED LOAN RECEIVED FROM OTHER. UNACCOUNTED LOANS RETURNED BY OTHERS. UNACCOUNTED SALE PROCEEDS OF INVESTMENTS SUCH AS SHARES, PROPERTIES. 6.2.7 DETAILS MAY NOT BE AVAILABLE TO SEGREGATE THE DEPOSITS INTO THE ABOVE HEADS AND QUANTITY THE TOTAL AMOUNT UNDER EACH OF THE ABOVE H EADS. ESTIMATING THE PROFIT AS A PERCENTAGE OF THE TOTAL OF THE DEPOSITS WOULD BE INCORRECT. IN SUCH CASES, WORKING OUT THE PEAK CREDITS (RECEIPTS) OR THE DEBITS (PAYMENT) MAY GIVE AN INDICATION OF THE TOTAL UNACCOUNTED MONEY IN THE POSSESSION OF THE ASSESSEE WHICH MAY BE ASSESSED AS HIS INCOME. 6 .2.8 BUT THE PEAK CREDIT STATEMENTS CAN BE PREPARED ONLY IF RECORDS FOR THE RECEIPT AND PAYMENT OF MONEY FOR THE ENTIRE ACCOUNTING PERIOD ARE KEPT. THE R ECORD NEED NOT BE REGULAR BOOKS OF ACCOUNT MAINTAINED UNDER DOUBLE ENTRY SYSTEM. EVEN A ROUGH ACCOUNT WHERE DATES OF RECEIPT AND PAYMENT OF MONEY ARE RECORDED WOULD SUFFICE. F OR E XA M PLE: WHERE AN ASSESSEE MAINTAINED UNDISCLOS ED BANK ACCOUNTS, FROM THE BANK ACCOUNT STATE MENTS, PEAK CREDIT OR THE PEAK OF THE A MOUNTS D EPOSITED CAN WORKED OUT. BUT IF THE RECORDS ARE INCOMPLETE OR IF THE RECORDS AVAILABLE ONLY SHOW TOTAL AMOUNT RECEIVED ON A PARTICULAR DATE, A PEAK CREDIT STATEMENT CANNOT BE PREPARED. 6. 2.9 IN THE INSTANT CASE, THE APPELLANT DOES NOT MAINTAIN AN Y BOOKS OF ACCOUNTS REGULAR OR ROUGH ON THE BASIS OF WHICH THE PEAK CREDIT CAN BE WORKED OUT. HENCE THIS CONTENTION OF THE APPELLANT FALLS FLAT ON MERITS AND FACTS AS HE IS UNABLE TO DEMONSTRATE THE SOURCE AND UTILIZATION OF THE CASH DEPOSITS AND WITHDRAWA LS IN THE BANK ACCOUNTS AS DISCUSSED ABOVE. 6.2.10. THE COMPLETE CONTENTION OF APPELLANT HAS BE EN EXAMINED. IT IS A MATTER OF FACT THAT THIS SECRET BANK A/C WOULD NOT HAV E COME TO I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 9 THE KNOWLEDGE OF THE TAX DEPARTMENT SAVE THE USE OF TECHNOLOGY AND COLLECTI ON OF INFORMATION BY THE INCOME TAX DEPARTMENT REGARDING HIGH VALUE TRANSACTIONS THROUGH BANK ING AND FINANCIAL INSTITUTIONS. THE APPELLANT'S SUBMISSION THAT THE DEPOSITS IN THE BANK A/C'S WERE MADE OUT OF SALE PROCEEDS OF AGRICULTURE LAND AND NO ACCOUNTS W ERE MAINTAINED IS NOT SUPPORTED BY ANY PROOF OR DOCUMENTARY EVIDENCE. THE BURDEN OF PROOF LIES ON THE APPELLANT TO SUPPORT HIS CONTENTION THAT THE EXPLANATION REGARDING SOURCE OF DEPOSITS. THE PRIMARY ONUS IS ON THE APPELLANT TO PROVE THE SOURCE OF CASH DE POSITS SUPPORTED WITH EVIDENCES. MERE FILING OF AFFIDAVITS DOES NOT HELP THE CASE OF THE APPELLANT. 6. 1.11. THE EXPRESSION 'BURDEN OF PROOF REALLY MEANS TWO DIFFERENT THINGS. IT MEANS SOMETIMES THAT A PARTY IS REQUIRED TO PROVE AN ALLEGATION BEFORE JUDGME NT CAN B E GIVEN IN HIS FAVOUR. IT ALSO MEANS THAT ON A CONTESTED ISSUE, ONE OF THE TWO CONTENDING PARTIES HAS TO INTRODUCE EVIDENCE. IN THE FIRST SENSE, IF THE BURDEN IS NOT DISCHARGED, THE PARTY MUST EVENTUALLY FAIL. IN THE SECOND CASE, WHERE THE PARTIES HAVE JOINED ISSUE AND HAVE LED EVIDENCE AND THE CONFLICTING EVIDENCE CAN BE WEIGHED TO DETERMINE WHICH WAY TO ISSUE CAN BE DECIDED, THE QUESTION OF BURDEN OF PROOF BECOMES AN ABSTRACT QUESTION AND IS THEREFORE ACADEMIC. SECTION 101 TO 114 OF INDIAN EVIDENC E ACT, 1872 DEALS WITH BUR DEN OF PROOF. SECTION 102 OF THE EVIDENCE ACT PRO VIDES THAT THE BURDEN OF PROOF L IES ON THAT PARTY WHO WOULD FAIL IF NO EVIDENCE AT ALL WERE GIVEN ON EITHER SIDE. THUS IF AN ASSESSEE CLAIMS THAT MONEY OR BULLION FOUND IN HIS POS SESSION AT THE TIM E OF THE SEA RCH OR SURVEY DOES NOT BELONG TO HIM BUT SOMEONE ELSE THE ONUS IS ON HIM TO ESTABLISH IT BECAUSE THE ORDINARY PRESUMPTION IS THAT HE IS TH E OWNER AS THE MONEY ETC. WAS FOUND IN HIS POSSESSION. SIMILARLY, IN ALL CASES WHERE A PARTICULAR RECEIPT IS SOUGHT TO BE TAXED AS INCOME, THE INITIAL ONUS IS ON THE ASSESSING OFFICER TO PROVE THAT IT IS TAXABLE. WHERE, HOWEVER, THE ASSESSEE CLAIMS EXEMPTION, THE BURDEN IS ON THE ASSESSEE TO PROVE IT TO BE EXEMPT. SAME IS THE POSITION IN CAS E OF ALLOWANCES, DEDUCTIONS, OR CLAIMS OF LOSS, ETC. SIMILARLY, WHERE THERE IS A STATUTORY REBUTTABLE PRESUMPTION AGAINST THE ASSESSEE, AS IN CASE OF CASH CREDITS ETC., U/S 68 OR UNEXPLAINED INVESTMENT U/S 69, THE INITIAL BURDEN OF PROOF IS ON THE ASSESSEE TO SHOW THAT THE CASH CREDIT IS GENUINE OR THE INVESTMENT IS N OT UNEXPLAINED. THE AO SHOULD, THEREFORE ALWAYS EXAMINE AS TO WHO HAS TO DISCHARGE THE BURDEN OF PROOF. IT MAY ALSO BE NOTED THAT IN THE COURSE OF ASSESSMENT, THE BURDEN OF PROOF MAY SHIFT FROM ONE TO THE OTHER. FOR INSTANCE, IF THE I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 10 ASSESSEE DISCHARGES HIS INITIAL BURDEN OF PROOF, THE ONUS SHIFTS TO THE ASSESSING OFFICER WHO MUST BRIN G OUT FACTS TO REFUTE ASSESSEE'S VERSION. 6.2.12. THE PROCEEDINGS UNDER THE INCOME TAX ACT ARE CIVIL PROCEEDINGS . THE DEGREE OF PROOF REQUIRED IN ASSESSMENT PROCEEDINGS IS BASE ON THE PRINCIPLES OF PREPONDERANCE OF PROBABILITY, UNLIKE IN CRIMINAL PROCEEDINGS WHERE PROOF BEYOND REASONABLE DOUBT IS INSISTED UPON. IT IS OPEN TO THE ASSESSING OFFICER TO PROBABILISE HIS STAND AND SHOW ITS PREPONDERANCE WHERE CONCLUSIVE PROOF IS NOT FORTHCOMING. THE OBSERVATIONS OF THE SUPREME COURT IN STATE OF WEST BENGAL V. MIR MOHAMMAD OMAR AND OTHERS JT 2000(9) SC 467 MADE IN THE CONTEXT OF A CRIMINAL CA SE ARE RELEVANT FOR OUR PURPOSE. 'THE PRISTINE RULE THAT THE BURDEN OF PROOF IN ON THE PROSECUTION TO PROVE THE GUILT OF THE ACCUSED SHOULD NOT BE TAKEN AS A FOSSILIZED DOCTRINE AS THOUGH IT ADMITS OF NO PROCESS OF INTELLIGENT REASONING. THE DOCTRINE OF PRESUMPTION IS NOT ALIEN TO THE A BOVE RULE, NOR WOULD IT IMPAIR THE TEMPER OF THE RULE. ON THE OTHER HAND, IF THE TRADITIONAL RULE RELATING TO BURDEN OF PROOF OF THE PROSECUTION IS ALLOWED TO BE WRAPPED IN PEDANTIC COVERAGE THE OFFENDERS OF SERIOUS OFFENCES WOULD BE THE MAJOR BENEFICIARIE S AND THE SOCIETY WOULD BE THE CASUALTY . 6.3 THE PROCEEDINGS UNDER THE INCOME TAX ACT ARE CIVIL PROCEEDINGS. THE DEGREE OF - PROOF REQUIRED IN ASSESSMENT PROCEEDINGS IS BASED' ON THE PRINCIPLES OF : PREPONDERANCE OF PROBABILITY, UNLIKE IN CRIMINAL PROCEEDI NGS WHERE PROOF .BEYOND REASONABLE DOUBT IS INSISTED UPON. IT IS OPEN TO THE ASSESSING OFFICER TO PROBABILISE HIS STAND AND SHOW ITS PREPONDERANCE WHERE CONCLUSI VE PROOF IS NOT FORTHCOMING. 6.3.1 THIS RAISES THE QUESTION WHETHER THE APPARENT CAN BE CONSI DERED AS REAL. AS LAID DOWN BY APEX COURT IN THE CASE CIT V. DURGA PRASAD MORE [1971] 82 ITR 540, APPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOW N THAT THERE ARE REASONS TO BELIEVE THAT THE APPELLANT IS NOT THE REAL AND THAT THE TAXING AUTHORITIES ARE EN TITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY AND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILITIES 6.3.2 THE HON SUPREME COURT HELD THAT IT IS TRUE THAT AN APPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE REASONS I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 11 TO BELIEVE THAT THE APPARENT IS NOT THE REAL PARTY WHO RELIES ON A RECITAL IN A DEED HAS TO ESTABLISH THE TRUTH OF THOSE RECITALS, OTHERWISE IT WILL BE VERY EASY TO MAKE SELF - SERVING STATEMENTS IN DOCUMENTS EITHER EXECUT ED OR TAKEN BY A PARTY AND RELY ON THOSE RECITALS. IF ALL THAT AN ASSESSEE WHO WANTS TO EVADE TAX IS TO HAVE SOME RECITALS MADE IN A DOCUMENT EITHER EXECUTED BY HIM OR EXECUTED IN HIS FAVOUR THEN THE DOOR WILL BE LEFT WIDE OPEN TO EVADE TAX. A LITTLE PROBI NG WAS SUFFICIENT IN THE PRESENT CASE TO SHOW THAT THE APPARENT WAS NOT THE REAL. THE TAXING AUTHORITIES WERE NOT REQUIRED - TO PUT ON BLINKERS WHILE LOOKING AT THE DOCUMENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS. 'CIT V. DURGA PRASAD MORE [1971] 82 ITR 540, AT PP. 545, 547 (SC) . 6.4 ON THE BASIS OF THE FACTS AND CIRCUMSTANCES, IT IS EVIDENT THAT THE APPELLANT HAS FAILED TO DISCHARGE THE BURDEN OF PR OOF REGARDING THE CASH DEPOSITS IN THE BANK ACCOUNT. IN ABSENCE OF ANY EVIDENCE AND FAILURE TO PRODUCE ANY EVIDENCE TO SUBSTANTIATE HIS CLAIM, THE ADDITION OF RS. 19,37,590/ - U/S 69 OF THE IT, ACT IS CONFIRMED AND THE GROUND OF APPEAL IS DISMISSED. (ADD ITI O N CONFIRMED RS RS. 19,37,590/ - ) 7 . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LEARNED COUNSEL CONTENDED THAT LD. CIT(A) HA D ERRED IN SUSTAINING THE ADDITION WHICH WAS DULY EXPLAINED BY THE ASSESSEE . HE ALSO FURNISH ED PAPER BOOK CONTAIN ING DETAILS LIKE WRITTEN STATEMENT, COPY OF SUBMISSION MADE BEFORE ASSESSING OFFICER, COPY OF AOP DEED, COPY OF STATEMENT RECORDED OF SANDEEP H. DOBARIYA, SHRI VIR JIB HAI C. GAJERA, COPY OF BANK STATEMENT ETC. HE ALSO CONTENDED THAT BENEFIT OF PEAK BALANC E SHOULD ALSO BE GIVEN AND STATED THAT PEAK BALANCE WAS RS.12,64000/. ON OTHER HAND, LD. D.R. VEHEMENTLY CONTENDED THAT THE ASSESSEE FAILED T O EXPLAIN THE GENUINENESS OF THE CASH DEPOSIT DETECTED IN THE UNACCOUNTED BANK A/C OF THE ASSESSEE. I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 12 THEREFORE, HE STATED THAT THE LD. CIT(A) HAS RIGHTLY SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 8 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDER OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD THROUGH THE ASSISTANCE OF THE REPRESENTATIVES. WE HAVE NOTICED THAT THROUGH AIR INFORMATION THE ASSESSING OFFICER DETECTED DEPOSITING OF CASH OF RS. 17,42,300/ - IN THE SAVING BANK A/C. NO. 058401500739 MAINTAINED WITH THE ICICI BANK IN THE NAME OF THE ASSESSEE. ON QUESTIONING BY THE ASSESSING OFFICER THE ASSESSEE HAD ALSO REVEALED THAT HE WAS ALSO HAVING ANOTHER ACCOUNT NO. 624401086077 WITH ICICI BANK . REGARDING THE DEPOSITS OF RS.46010/ FOUND IN THE A/C NO. 624401086077 WITH ICICI BANK THE ASSESSEE FAILED TO SUBSTANTIATE HIS CLAIM THAT THESE WERE THE LOAN AMOUNT RECEIVED AS NO SUPPORTING CONCRETE EVIDENCES WERE FURNISHED. WE HAVE NOTICED THAT THE TOTAL CASH DEPOSIT OF RS. 19,37,590/ - WAS CONSISTED OF RS. 1,95,290/ - IN THE BANK A/C 624 401086077 AND RS. 17,42,300/ - IN THE BANK A/C NO. 058401500739 WITH ICICI RESPECTIVELY. OUT OF THESE CASH DEPOSIT, T HE ASSESSEE HAS T RIED TO EX PLAIN THE CASH DEPOSIT OF RS.12,64000/ - BY CLAIMING THAT HE ALONG WITH OTHER MEMBERS HAVE CREATED AN AOP CALL ED AYUSHI INVESTMENT AND TWO OF THE MEMBERS OF THIS AOP, SHRI SANDIPBHAI H. DOBARIYA AND SHRI VIRJIBHAI C. GAJERA HAVE BROUGHT CAPITAL OF RS.4,10,000 AND RS. 8,54,000/ - RESPECTIVELY. IN THIS CONNECTION WE HAVE NOTICED THAT SHRI SANDIP H. DOBARIYA AN D SHRI VIRJIBHAI C. GAJERA HAVE PRODUCED ONLY THE COPIES OF 7/12 OF I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 13 AGRICULTURAL LAND BEFORE THE ASSESSING OFFICER AND FAILED TO FURNISH ANY CONCRETE EVIDENCES OF EARNING AGRICULTURAL INCOME AND ALSO FAILED TO PROVE THAT CASH WAS DEPOSITED BY THEM IN THE ABO VE MENTIONED BANK ACCOUNT OF THE ASSESSEE. WE HAVE ALSO PERUSED THE COPIES OF STATEMENT RECORDED U/S 131 OF THESE TWO PERSONS IN WHICH THEY HAVE REVEALED THEIR IGNORANCE ABOUT NATURE OF BUSINESS OF THE AOP AND PURPOSE FOR WHICH THE CASH WAS GIVE N BY THEM TO THE ASSESSEE . 8.1 WE HAVE ALSO PERUSED THE COPY OF DEED OF THE AOP AVAILABLE IN THE PAPER BOOK AND NOTICED THAT THE AGREEMENT OF AOP W AS MADE ON THE HUNDRED RUPEES NON - JUDICIAL ST A M P PAPER AND NOWHERE DATE OF STAMP PAPER WAS INDICATED, THE SIGNING P ARTIES ALSO HA D NOWHERE MENTIONED THE DATE OF SIGNATURES ON THIS DEED . WE HAVE FURTHER NOTICED THAT IN THE COPY OF THE AOP DEED IT WAS MENTIONED THAT IT WAS CRATERED ON 31ST OF MARCH 2008 AND AT SERIAL NUMBER 3 OF THIS DEED IT WAS STAT ED THAT BANK ACCOU NT NUMBER 058015739 IN THE ICICI BANK WILL BE USED FOR ITS BUSINESS PURPOSES. IN THIS CONNECTION WE HAVE GONE THROUGH THE COPY OF BANK STATEMENT FILED IN THE PAPER BOOK SUBMITTED BY THE ASSESSEE AND NOTICED THAT BANK ACCOUNT NUMBER 058015739 WITH THE ICICI BANK WAS OPENED ON 12TH OF MAY 2008 WHEREAS THE DATE OF CREATION OF THE TRUST DEED WAS STATED TO BE 31.03.2008 . THESE FACTS INDICATE THAT THE CREATION OF THE TRUST DEED AS AOP WAS THE AFTERTHOUGHT STEPS TAKEN BY THE ASSESSEE . WE FURTHER FIND THAT THE ASSESSEE FAILED TO EST AB LISH THE GENUINENESS OF HIS CLAIM ABOUT DEPOSITING OF CASH IN THE BANK ACCOUNT THROUGH THE I.T.A NO. 1290 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SHRI PARESHBHAI KARSHANBHAI SORATHIYA VS. ITO 14 ABOVE STATED TWO PERSONS. WE HAVE ALSO CONSIDERED THE CONTENTION OF THE LD. COUNSEL THAT BENEFIT OF PEAK BALANCE TO BE PROVIDED TO T HE ASSESSEE. IN T HIS CONNECTION WE OBSERVED THAT THE PEAK CREDIT THEORY IS BASED ON RECYCLING OF FUNDS IMPLYING SYSTEMATIC ACTIVITY. IN THE CASE OF THE ASSESSEE , NEITHER OF THE DEPOSITS NOR THEIR UTILISATION STANDS EXPLAINED , THEREFORE, WE CONSIDERED THAT THIS CONTENTION OF THE ASSESSEE IS NOT MAINTAINABLE . I N VIEW OF THE ABOVE FACTS AND FINDING WE DISINCLINED TO INTERFERE IN THE FINDINGS OF THE LEARNED CIT APPEAL. 9. IN THE RESULT , THE APPEAL OF THE ASSESSEE IS DISMISSED . ORDER PR ONOUNCED IN THE OPEN C OURT ON 27 - 03 - 201 7 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 2 7 /03/2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,