Shri Manish Babubhai Javia, Surat V. The Income Tax Officer, Ward 3(2), Surat

ITA 1435/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9081 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 15-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMIR VAKIL
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained cash credit; Peak credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO.1435/AHD/2013 (ASSESSMENT YEAR:2008-09) SHRI MANISH BABUBHAI JAVIA, PLOT NO.8, ANKUR NAGAR SOCIETY, BEHIND RAVINDRA PARK SOCIETY, ADAJAN ROAD, SURAT-395009 APPELLANT VS. THE INCOME-TAX OFFICER, WARD-3(2), SURAT RES PONDENT PAN: AEJPJ3376D /BY ASSESSEE : SHRI M. K. PATEL, A.R. /BY REVENUE : SHRI SAMIR VAKIL, SR. D.R. /DATE OF HEARING : 23.02.2017 /DATE OF PRONOUNCEMENT : 27.02.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 ARISES AGAINST THE CIT(A)-IV, SURATS ORDER DATED 28.03.2013 PASSED IN APPEAL NO. CAS- IV/II/189/10-11, UPHOLDING ASSESSING OFFICERS ACTI ON MAKING ADDITION OF RS.10,97,920/- ON ACCOUNT OF UNEXPLAINED CASH CREDI TS/DEPOSITS MADE IN BANK ACCOUNT, IN PROCEEDINGS U/S. 143(3) OF THE INCOME T AX ACT, 1961; IN SHORT THE ACT. ITA NO. 1435/AHD/2013 (SHRI MANISH B. JAVIA VS. ITO ) A.Y. 2008-09 - 2 - 2. RELEVANT FACTS INVOLVED ARE IN A NARROW COMPASS. THERE IS NO DISPUTE THAT THE ASSESSEE HAD DEPOSITED THE SUM IN QUESTION OF RS.10,97,920/- IN ITS BANK ACCOUNT MAINTAINED WITH SUTEX CO-OPERATIVE BAN K LTD.. THIS ASSESSEE IS STATED TO BE ENGAGED IN DIAMOND BROKERAGE BUSINE SS. HE APPEARS TO HAVE FAILED IN FILING COGENT EVIDENCE EXPLAINING SOURCE OF THE ABOVESTATED CASH DEPOSITS IN THE COURSE OF SCRUTINY. THE ASSESSING OFFICER THUS INVOKED SECTION 68 OF THE ACT TO ADD THE ABOVE STATED DEPOS ITS AS UNEXPLAINED CREDITS IN THE ACCOUNT. 3. THE CIT(A) CONFIRMS THE ABOVESTATED ADDITION AS FOLLOWS: 4. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND TH E SUBMISSIONS OF THE APPELLANT. THE APPELLANT HAS ADMITTED THAT THE BANK ACCOUNT WITH SUTEX CO.OP. BANK LTD IS HIS UNDISCLOSED BANK ACCOUNT. TH E APPELLANT HAS NOT GIVEN ANY DOCUMENTARY EVIDENCE FROM WHICH IT CAN BE INFERRED THAT THE TRANSACTIONS IN THE BANK ACCOUNT PERTAINED TO HIS B ROKERAGE BUSINESS. THE APPELLANT'S CONTENTION THAT HE WAS COLLECTING THE P AYMENTS FROM THE BUYERS AND TRANSFERRING THE SAME TO THE SELLER CANNOT BE A CCEPTED AS IN A BROKERAGE BUSINESS WHAT THE BROKER GETS IS ONLY THE BROKERAGE ; THE SALE AND PURCHASE TRANSACTIONS ARE NEVER ROUTED THROUGH HIM. IF THE A PPELLANT WAS CARRYING ON A GENUINE BROKERAGE BUSINESS HE WOULD HAVE SUBMITTE D THE NAMES., ADDRESS, PAN OF THE PARTIES WITH WHOM HE WAS DOING SUCH TRAN SACTIONS. MORE IMPORTANTLY, NO CONFIRMATIONS HAVE BEEN FILED FROM THESE PARTIES THAT THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT WAS OUT OF THE FUNDS GIVEN BY THEM TO THE APPELLANT FOR THE PURPOSE OF BROKERAGE BUSINESS. ALL THESE CONFIRM THAT THE APPELLANT HAS FABRICATED THIS STOR Y TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN HIS BANK ACCOUNT. 4.2 THE APPELLANT HAS ALSO NOT GIVEN ANY DOCUMENTAR Y EVIDENCE REGARDING SOURCE OF CREDIT ENTRIES APPEARING IN THE UNDISCLOS ED BANK ACCOUNT. FROM THE BANK ACCOUNT, IT IS SEEN THAT OUT OF THE TOTAL DEPOSITS RS.10,97,920/-, ONLY ITA NO. 1435/AHD/2013 (SHRI MANISH B. JAVIA VS. ITO ) A.Y. 2008-09 - 3 - AN AMOUNT OF RS.32,381/- HAS BEEN DEPOSITED BY CHEQ UES ON VARIOUS DATES AND THAT ALSO IN VERY SMALL DENOMINATIONS. THE BALA NCE DEPOSITS OF RS.10,65,539/- ARE ALL BY CASH FOR WHICH NO DETAILS HAVE BEEN FURNISHED. SIMILARLY ALL THE DEBITS ARE BY CLEARING. FURTHER, DETAILS OF THE PARTIES FROM WHOM CHEQUES/CASH HAVE BEEN RECEIVED AND TO WHOM CH EQUES/CASH HAVE BEEN ISSUED HAVE NOT BEEN FURNISHED. FROM THE BANK ACCOUNT OF THE APPELLANT IT IS SEEN THAT THE CASH HAS BEEN DEPOSITED AT REGU LAR INTERVALS AND IMMEDIATELY THEREAFTER CHEQUES HAVE BEEN ISSUED TO ONE 'K.R'. THE APPELLANT HAS NOT GIVEN THE NAME, ADDRESS, PAN AND CONFIRMATION FROM 'K.R' REGARDING THE CHEQUES ISSUED TO HIM. SIMILARL Y NO DETAILS HAVE BEEN FURNISHED IN RESPECT OF OTHER PARTIES TO WHOM CHEQU ES HAVE BEEN ISSUED SUBSEQUENT TO DEPOSITS BY CASH. AS THE APPELLANT HA S NOT GIVEN THE DETAILS OF WITHDRAWALS BY CHEQUE, THE SOURCE OF DEPOSITS BY CA SH IN THE BANK ACCOUNT CANNOT BE HELD TO BE OUT OF THOSE WITHDRAWALS, I.E. NO CREDIT CAN BE ALLOWED TO THE APPELLANT FOR ROTATION OF ANY AMOUNT WITHDRA WN FROM THIS BANK ACCOUNT ESPECIALLY WHEN THE DEPOSITS ARE BY CASH AN D SUBSEQUENT WITHDRAWALS ARE BY CHEQUE. IN ABSENCE OF ANY DOCUME NTARY EVIDENCE REGARDING THE DEBIT & CREDIT ENTRIES APPEARING IN T HE BANK ACCOUNT, THE APPELLANT'S CONTENTION THAT ONLY THE PEAK CREDIT AP PEARING IN THE BANK ACCOUNT SHOULD BE TAKEN IS NOT ACCEPTABLE. CONSIDER ING THE FACTS OF THE APPELLANT'S CASE, THE BENEFIT OF PEAK CREDIT IS NOT ADMISSIBLE. 4. WE HAVE HEARD BOTH THE LEARNED REPRESENTATIVES R EITERATING THEIR RESPECTIVE STANDS. CASE FILE PERUSED. SHRI PATEL IS VERY VERY FAIR AT THE OUTSET ITSELF IN SUBMITTING THAT THE ASSESSEE DOES NOT POS SESS ANY COGENT EVIDENCE IN ORDER TO PROVE SOURCE OF THE ABOVESTATED CREDITS FO RMING SUBJECT MATTER OF THE IMPUGNED ADDITION. HIS ONLY SUBMISSION IS THAT BOT H THE LOWER AUTHORITIES HAVE NOT EXAMINED ASSESSEES DEPOSITS FROM PEAK BAL ANCE ASPECT. LEARNED DEPARTMENTAL REPRESENTATIVE IS EQUALLY FAIR IN NOT DISPUTING THIS PLEA. BOTH PARTIES THEREAFTER SUBMIT THAT THIS PEAK BALANCE AD DITION ISSUE CAN BE REMITTED TO THE ASSESSING OFFICER FOR ADJUDICATION AFRESH AS PER LAW. WE ACCEPT THIS ITA NO. 1435/AHD/2013 (SHRI MANISH B. JAVIA VS. ITO ) A.Y. 2008-09 - 4 - FAIR APPROACH AND DIRECT THE ASSESSING OFFICER TO E XAMINE THIS PEAK BALANCE ASPECT OF THE IMPUGNED DEPOSITS AS PER LAW AFTER AF FORDING ADEQUATE OPPORTUNITY TO DECIDE THE ISSUE AFRESH. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED FOR STA TISTICAL PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 27 TH DAY OF FEBRUARY, 2017.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 27/02/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0