Ankur Nohria, Rajpura V. ITO, Rajpura

ITA 15/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90227 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Business income; Depreciation; Peak credit
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 15/CHD/2015 (ASSESSMENT YEAR : 2009-10) ANKUR NOHRIA, VS. THE INCOME TAX OFFICER, PROP.DIAMOND INCORPORATE, WARD RAJPURA (PUNJAB) RAJPURA (PUNJAB). PAN: ADVPN1112A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHOK GOYAL RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 30.06.2015 DATE OF PRONOUNCEMENT : 02.07.2015 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), PATIALA DATED 28.11.2014 FOR ASSESSMENT YEAR 2009-10. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BE LOW AND THE MATERIAL AVAILABLE ON RECORD. 2 3. ON GROUND NO.1 AND 2, THE ASSESSEE CHALLENGED T HE ADDITION OF RS.17,64,900/- UNDER SECTION 69A OF THE ACT ON A CCOUNT OF CASH DEPOSITS IN THE BANK ACCOUNT. 4. BRIEFLY, THE FACTS ARE THAT THE ASSESSEE HAD MA DE DEPOSITS OF RS.15,30,400/- IN HIS SB ACCOUNT WITH K OTAL MOHINDRA BANK AND MADE DEPOSITS OF RS.2,34,500/- IN HIS SB ACCOUNT WITH ORIENTAL BANK OF COMMERCE, RAJPURA. THE DEPOSITS IN THESE ACCOUNTS HAVE NOT BEEN DISCLOSED AS CONTENDED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER FURTHER MENTIONED THAT EACH DEPOSIT IS IN AN AMOUNT LESS THAN RS.50,000/-. THE AMOUNT DEPOSITED IN CASH HAS BEEN WITHDRAWN IMMEDIATELY THEREAFTER ON THE SAME DAY OR THE NEXT DAY. IT WAS ALSO NOTED THAT THESE CASH AMOUNTS AR E DEPOSITED AT RAJPURA BUT THE SAME AMOUNTS HAVE BEEN WITHDRAWN AT DELHI. THE ASSESSEE SUBMITTED BEFORE THE ASSESSIN G OFFICER THAT THE BANK ACCOUNT IS IN THE JOINT NAME OF ASSES SEE AND HIS BROTHER SHRI DINESH NOHRIA, WHO RESIDES AT DELHI. THE ACCOUNT WAS OPERATED BY HIM FOR THE PURPOSE OF OBTA INING UNSECURED LOAN FROM THE BANK. THE AMOUNTS WERE DEPOSITED IN THE BANK AND FURTHER TRANSACTIONS WERE MADE IN T HE ACCOUNT AGAIN AND AGAIN IN THE SAME BANK BY DEPOSIT ING AND WITHDRAWING THE AMOUNT. THE EXPLANATION OF THE A SSESSEE WAS NOT ACCEPTED AND ADDITION OF RS.17,64,900/- WAS MADE. THE ASSESSEE MADE MORE OR LESS SIMILAR SUBMISSION B EFORE THE LEARNED CIT (APPEALS). HOWEVER, THE LEARNED CIT ( APPEALS) NOTED THAT THE FACTS ARE SAME AS HAVE BEEN CONSIDER ED IN 3 ASSESSMENT YEAR 2008-09 IN THE CASE OF THE ASSESSEE AND SIMILAR ADDITION HAS BEEN MAINTAINED. THE LEARNED CIT (APPEALS) ACCORDINGLY, DISMISSED THE APPEAL OF THE ASSESSEE BY FOLLOWING HIS ORDER FOR ASSESSMENT YEAR 2008-09. 5. AFTER HEARING THE SUBMISSIONS OF BOTH THE PARTI ES, WE ARE OF THE VIEW THAT THE ISSUE IS SAME AS WAS CO NSIDERED BY THE AUTHORITIES BELOW IN PRECEDING ASSESSMENT YEAR 2008-09. THE LEARNED CIT (APPEALS) ALSO NOTED THAT THE FACTS ARE SAME AS WERE CONSIDERED IN ASSESSMENT YEAR 2008-09 AND A DDITION WAS MAINTAINED BY HIM IN 2008-09 ALSO. THE ASSESS EE PREFERRED APPEAL AGAINST THE ORDER OF THE LEARNED C IT (APPEALS) FOR ASSESSMENT YEAR 2008-09 BEFORE THE TRIBUNAL IN ITA NO.219/CHD/2014 AND THE APPEAL OF THE ASSESSEE HAS BEEN ALLOWED PARTLY VIDE ORDER DATED 10.2.2015. THE FI NDINGS OF THE TRIBUNAL IN PARA 8 OF THIS ORDER ARE REPRODUCED AS UNDER : 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOT IN DISPUTE THAT THE TOTAL SALES OF THE ASSESSEE WERE OF RS.39,00,875/-. THE ASSESSEE IS THE TRADE R OF BALL BEARINGS AND MACHINERY PARTS AND EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE RETURN OF INC OME WAS FILED UNDER SPECIAL PROVISIONS CONTAINED UNDER SECTION 44AF OF THE ACT. THEREFORE, THE ASSESSEE IS NOT REQUIRED TO MAINTAIN THE BOOKS OF ACCOUNT. EV EN THEN ACCORDING TO THE SUBMISSION OF THE ASSESSEE, T HE ASSESSEE MAINTAINED ONLY CASH BOOK AND LEDGER. THE PRINTOUT OF COMPUTERIZED CASH BOOK AND LEDGER WERE ALSO PRODUCED BEFORE THE ASSESSING OFFICER. IT WA S ALSO EXPLAINED THAT THE BANK ACCOUNT OF KOTAK MAHINDRA BANK, RAJPURA HAS BEEN SHOWN IN THE BOOKS OF ACCOUNT BUT DUE TO MISTAKE THE BALANCE WAS TRANSFERRED TO EXPENSES ACCOUNT INSTEAD OF THE 4 BALANCE BEING TAKEN TO BALANCE SHEET. THE ASSESSING OFFICER ALSO NOTED THE FACT THAT THE AMOU NT DEPOSITED IN CASH IN THIS BANK ACCOUNT HAS SMALL DEPOSITS AS WELL AS WITHDRAWAL OF THE CASH IMMEDIATELY EITHER ON THE SAME DAY OR THE NEXT DAY OF THE DEPOSITS. THE ASSESSING OFFICER ALSO NOTED THAT ALL THE ENTRIES APPEARING IN THE BANK STATEMEN T HAVE BEEN PUT BY THE ASSESSEE IN CASH BOOK ALSO, THOUGH THE ASSESSING OFFICER DISBELIEVED THE ENTRIE S CONTAINED IN THE CASH BOOK AND CONSIDERED IT TO BE AN AFTER THOUGHT. IN THIS BACKGROUND, IT IS CLEAR THA T THE ASSESSEE IS A RETAILER AND FILED RETURN OF INCOME W ITH THE AID OF SECTION 44AF OF THE ACT. THEREFORE, THE ASSESSEE NEED NOT TO MAINTAIN ANY REGULAR BOOKS OF ACCOUNT. IT IS A FACT THAT IN THE ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE MADE VARIOUS CASH DEPOSITS IN THE BANK ACCOUNT MAINTAINED WITH KOTAK MAHINDRA BANK, RAJPURA BUT THE DETAILS OF THE SAME SHOWS THAT THESE WERE SMALL DEPOSITS IN THIS BANK ACCOUNT. SAME AMOUNT AS DEPOSITED IN CASH IN THIS BANK ACCOUNT HAS BEEN WITHDRAWN IMMEDIATELY EITHER ON THE SAME DAY OR THE NEXT DAY. THE ASSESSEE HAS FAILED TO RECONCILE WHETHER THE SAME DEPOSITS WERE FROM THE SALE PROCEEDS OF THE ASSESSEE. IT IS ALSO FACT THAT INITIALLY THE ASSESSEE DID NOT DISCLOSE T HE BANK ACCOUNT MAINTAINED WITH KOTAK MAHINDRA BANK, RAJPURA TO THE REVENUE AUTHORITIES AND THE ASSESSIN G OFFICER ALSO CALLED FOR THE INFORMATION FROM THE CONCERNED BANK AS WELL AS INFORMATION WAS RECEIVED FROM AIR THAT THERE ARE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE WITH KOTAK MAHINDRA BANK, RAJPURA. THEREFORE, THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE SURINDER PAL ANAND (SUPRA) WOULD NOT SUPPORT THE CASE OF THE ASSESSEE BECAUSE THE ASSESSEE HAS NOT PROVED NEXUS OF THE CASH DEPOSITED IN THE BANK WITH THE GROSS DEPOSITS. HOWEVER, CONSIDERING THE FACT THAT THE 5 ASSESSEE MADE SMALL DEPOSITS IN THE BANK ACCOUNT WITH KOTAK MAHINDRA BANK, RAJPURA ON VARIOUS DATES AND AFTER DEPOSITING THE CASH TO THIS ACCOUNT, THE ASSESSEE ALSO WITHDRAWN THE SAME AMOUNT EITHER ON THE SAME DAY OR ON THE NEXT DAY, WOULD DISCLOSE THA T THE ASSESSEE WAS HAVING AVAILABILITY OF THE CASH FO R FURTHER DEPOSIT IN THE SAME BANK ACCOUNT MAINTAINED WITH KOTAK MAHINDRA BANK, RAJPURA. THE A.O. HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE T HAT THE ASSESSEE HAS SPENT THE AMOUNT WITHDRAWN SOMEWHERE ELSE. THE THEORY OF PEAK CREDIT IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE BECAUSE THE ASSESSEE NEVER ACCEPTED IT TO BE UNEXPLAINED MONEY. THEREFORE, IN THE ABSENCE OF COMPLETE DETAILS AND CONSIDERING THE FACT THAT THE AMOUNT OF CASH WAS ROTATING IN THE BANK ACCOUNT OF THE ASSESSEE WITH KOTAK MAHINDRA BANK, RAJPURA BY MAKING CASH DEPOSITS AND IMMEDIATELY WITHDRAWING THE SAME WOULD SHOW THAT THE ENTIRE CASH DEPOSITS IN THE BAN K ACCOUNT MAY NOT BE UNEXPLAINED AMOUNT OF THE ASSESSEE. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, IT WOULD BE REASONABLE AND PROPER TO GIVE SOME SUBSTANTIAL BENEFIT TO THE ASSESSEE FOR THE PURPOSE OF DELETING PART OF ADDITI ON ON THIS ISSUE. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT ENDS OF JUSTICE WOULD MEET IF THE ADDITION OF RS.10 LACS IS DELETED. THE ADDITION M AY BE RESTRICTED TO RS.7,35,200/- ONLY. WE ACCORDING LY, MODIFY THE ORDERS OF THE AUTHORITIES BELOW AND DELE TE THE ADDITION OF RS.10 LACS, THE ADDITION WOULD NOW BE RESTRICTED TO RS.7,35,000/-. THE GROUND NOS. 1 AN D 2 OF THE APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED . 6. FOLLOWING THE ORDER OF THE TRIBUNAL FOR ASSESSM ENT YEAR 2008-09 DATED 10.2.2015 (SUPRA), WE ARE OF THE VIEW THAT 6 THE ENDS OF JUSTICE WOULD MEET IF THE ADDITION OF R S.10 LACS IS DELETED. THE ADDITION MAY BE RESTRICTED TO RS.7,6 4,900/- ONLY. WE ACCORDINGLY, MODIFY THE ORDERS OF THE AU THORITIES BELOW AND DELETE THE ADDITION OF RS.10 LACS AND ADD ITION WOULD NOW BE RESTRICTED TO RS.7,64,900/-. THE GRO UND NOS.1 AND 2 OF THE APPEAL OF THE ASSESSEE ARE ACCORDINGLY , PARTLY ALLOWED. 7. ON GROUND NO.3, THE ASSESSEE CHALLENGED THE ADDITION OF RS.32,064/- ON ACCOUNT OF DISALLOWANCE OF 1/5 TH EXPENSES FOR PERSONAL USE. THE ASSESSING OFFICER NOTED SEVERAL EXPENSES; LIKE CAR EXPENSES, CAR INSURANCE, CAR DEPRECIATION, INTEREST ON CAR LOAN AND INTERNET/TEL EPHONE EXPENSES AND OUT OF TOTAL CLAIM OF RS.1,60,320/-, T HE ASSESSING OFFICER DISALLOWED RS.32,064/- ON ACCOUNT OF PERSONAL USE OF THESE FACILITIES. 8. THE LEARNED CIT (APPEALS) DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 9. AFTER HEARING RIVAL SUBMISSIONS AND CONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE I.E. TRADING OF BALL BEARINGS, ETC. AND RETURN OF INCOME FILED AT RS.1,8 4,520/-, WE ARE OF THE VIEW THAT THE ADDITION IS ON EXCESSIVE S IDE. WE ACCORDINGLY, MODIFY THE ORDERS OF THE AUTHORITIES B ELOW AND RESTRICT THE ADDITION TO RS.10% IN ALL AS AGAINST T HE ADDITION MADE BY THE ASSESSING OFFICER OF RS.32,064/-. THE ASSESSING OFFICER IS DIRECTED TO MAINTAIN THE ADDITION OF 7 RS.10% ONLY ON THIS ISSUE. THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 10. ON GROUND NO.4, THE ASSESSEE CHALLENGED THE ADDITION OF RS.7000/- ON ACCOUNT OF UNVOUCHED TEA E XPENSES, MISCELLANEOUS EXPENSES, ETC. THE ASSESSING OFFICE R NOTED THAT THE ASSESSEE COULD NOT PRODUCE SOME OF THE VOU CHERS OF PETTY EXPENSES AND AFTER DISCUSSION WITH THE LEARNE D COUNSEL FOR THE ASSESSEE ADDITION OF RS.7000/- WAS MADE ON ACCOUNT OF UNVOUCHED EXPENSES. IT, THEREFORE, APPEARS TH AT THE ASSESSEES COUNSEL HAD AGREED FOR ADDITION OF RS.70 00/- OUT OF MISCELLANEOUS EXPENSES ON ACCOUNT OF UNVOUCHED E XPENSES. NO FURTHER VOUCHERS HAVE BEEN PRODUCED BEFORE THE A SSESSING OFFICER. THEREFORE, CONSIDERING THE TOTALITY OF T HE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW FOR MAINTA INING THE ADDITION. THIS GROUND OF APPEAL OF THE ASSESSEE I S ACCORDINGLY, DISMISSED. 11. ON GROUND NO.5, THE ASSESSEE CHALLENGED CHARGI NG OF INTEREST UNDER SECTION 234B OF THE ACT, WHICH IS MA NDATORY AND COMPENSATORY IN NATURE. THIS GROUND OF APPEAL OF THE ASSESSEE IS, THEREFORE, DISMISSED. 12. ON GROUND NO.6, THE ASSESSEE CHALLENGED INITIA TION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. IT IS A SEPARATE PROCEEDING AND NO APPEAL LIES AGAINST INITIATION 8 OF PENALTY PROCEEDINGS. THIS GROUND OF APPEAL OF THE ASSESSEE IS, THEREFORE, PRE-MATURE AND ACCORDINGLY, IS DISMI SSED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 ND DAY OF JULY, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 ND JULY, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH