Joydeb Mistry, Kolkata V. ITO, WD-26(3), KOLKATA, Kolkata

ITA 1512/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0730 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 22-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: MIHIR BANDYOPADHYAY
• Keywords: Peak credit; Source of fund
• Section: 69; 148; 144

Judgement Text

1 ITA NOS.1512&1513/KOL/2015 JOYDEB MISTRY A.Y.2008-0 9 & 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & DR.ARJUN LAL SAINI, AM ] ITA NOS.1512 & 1513/KOL/2015 ASSESSMENT YEARS : 2008-09 & 2009-10 JOYDEB MISTRY -VERSUS- I.T.O., WARD-26(3) KOLKATA KOLKATA (PAN:AKKPM 7238 F) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI MIHIR BANDYOPADHYAY, AR FOR THE RESPONDENT: SHRI S.DASGUPTA, ADDL. CIT(DR) DATE OF HEARING : 06.12.2017. DATE OF PRONOUNCEMENT : 13.12.2017. ORDER PER N.V.VASUDEVAN, JM: THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST TW O ORDERS DATED 30.01.2013 AND 23.01.2012 OF CIT(A)-7, KOLKATA RELATING TO A. Y.2008-09 & 2009-10. IN BOTH THESE APPEALS THE ASSESSEE HAS CHALLENGED THE ORDER OF CIT(A) WHEREBY THE CIT(A) SUSTAINED THE ADDITION OF PEAK CREDIT OF RS.12,36,1 67/- MADE IN A.Y.2008-09 AND RS.24,19,211/- IN A.Y.2009-10. THE ADDITION WAS MAD E BY THE AO ON IDENTICAL FACTS AND CIRCUMSTANCES IN BOTH THE ASSESSMENT YEARS. THE SE APPEALS WERE HEARD TOGETHER . WE DEEM IT CONVENIENT TO PASS A COMMON ORDER. 2. THE ASSESSEE IS AN INDIVIDUAL. HE CARRIES ON THE BUSINESS OF TRADING IN BROOM STICK. FOR A.Y. 2008-09 THE ASSESSEE FILED RETURN OF INCOM E DECLARING A TOTAL INCOME OF RS.1,48,760/-. IN A.Y.2009-10 THE ASSESSE FILED RET URN OF INCOME DECLARING TOTAL INCOME OF RS.1,60,000/-. IN THE COURSE OF ASSESSMEN T PROCEEDINGS FOR A.Y.2009-10 THE AO NOTICED THAT THERE WAS AIR (ANNUAL INFORMATION R EPORT) RECEIVED BY THE AO THAT THE ASSESSEE WAS MAINTAINING A SAVINGS BANK ACCOUNT WITH AXIS BANK, BARUIPUR BRANCH BEARING A/C NO.259010100059195. IN THIS ACCOUNT THE ASSESSEE HAD DEPOSITED CASH OF MORE THAN RS.68,00,000/- DURING THE PREVIOUS YEAR R ELEVANT TO A.Y.2009-10. THIS WAS THE REASON WHY THE ASSESSEES RETURN OF INCOME FOR A.Y. 2009-10 WAS TAKEN UP FOR COMPULSORY SCRUTINY. 2 ITA NOS.1512&1513/KOL/2015 JOYDEB MISTRY A.Y.2008-0 9 & 2009-10 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 2009-10 THE AO NOTICED THAT THE EXISTENCE OF THIS BANK ACCOUNT WAS NOT DISCLOS ED BY THE ASSESSEE IN THE RETURN OF INCOME NOR WERE THE TRANSACTIONS IN THE BANK ACCOUN T REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSE. IN A.Y.2008-09 THE ASSESSM ENT WAS REOPENED U/S 148 OF THE ACT CONSEQUENT TO THE INFORMATION ABOUT UNDISCLOSED BANK ACCOUNT WHICH TRANSPIRED FROM THE AIR INFORMATION IN A.Y.2009-10. EVEN IN A. Y.2008-09 THE EXISTENCE OF THIS BANK ACCOUNT WITH AXIS BANK AND THE TRANSACTIONS IN THIS BANK ACCOUNT WERE NOT REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. EVEN IN A.Y.2008-09, THESE WERE CASH DEPOSITS IN THIS BANK ACCOUNT. IN BOTH THE ASS ESSMENT YEARS THE ASSESSEE DID NOT PARTICIPATE IN THE ASSESSMENT PROCEEDINGS AND THERE FORE THE AO PROCEEDED TO COMPLETE THE ASSESSMENT TO THE BEST OF HIS JUDGMENT U/S 144 R.W.S. 145(3) OF THE ACT. THE AMOUNT OF CASH DEPOSITED MADE IN A.Y.2009-10 WAS MO RE THAN RS.68,00,000/- AND IN A.Y.2008-09 CASH DEPOSITS IN THE UNDISCLOSED BANK A CCOUNT WAS A SUM OF RS.35,01,167/-. 4. IN THE ABSENCE OF ANY EXPLANATION WITH REGARD TO THE SOURCE OF FUNDS OUT OF WHICH CASH DEPOSITS IN THE BANK ACCOUNT WAS MADE, THE AO HAD NO OTHER OPTION BUT TO MAKE AN ADDITION OF THE PEAK CREDIT IN THE AFORESAI D BANK ACCOUNT. THE AO RESORTED TO MAKING AN ADDITION OF PEAK CREDIT BECAUSE HE FOUND THAT THERE WERE DEPOSITS AND WITHDRAWALS FROM THE VERY SAME BANK ACCOUNT AND THE DEPOSITS SUCCEEDING EARLLIER WITHDRAWAL, TO SOME EXTENT WOULD EXPLAIN THE SOURC E OF SUBSEQUENT DEPOSIT IN THE BANK ACCOUNT. HENCE THE AO RESORTED TO MAKING AN AD DITION OF PEAK CREDIT. THE AO WORKED OUT PEAK CREDIT IN A.Y.2008-09 AND 2009-10 I N THE FOLLOWING MANNER A.Y.2008-09 ON GOING THROUGH THE BANK STATEMENT OF SAVINGS BANK ACCOUNTS MAINTAINED WITH AXIS BANK LTD. BARUIPUR BRANCH VIDE NO.259010100059 195 THE PEAK CREDIT WAS CALCULATED RS.1236167/- ON 31/03/2008 IN THE FOLLOW ING MANNER :- JOYDEB MISTRY PAN : AKKPM7238E A.Y.2008-09 A/S NO.259010100059195 DATE DEBIT CREDIT NET CREDIT 3 ITA NOS.1512&1513/KOL/2015 JOYDEB MISTRY A.Y.2008-0 9 & 2009-10 23-FEB 100000 100000 29/02 300000 400000 14-MAR 200000 600000 24-MAR 335000 935000 24-MAR 230973 PO ISSUED OF RS.230,973/- NOT CONSIDERED BECAUSE TH EY NEVER AVAILABLE FOR REINVESTMENT. 31-MAR 300000 1235000 31-MAR 1167 1236167 (PEAK) HENCE HEREBY I ADD RS.12,36,167/- TO THE TOTAL INCO ME OF THE ASSESEE AS UNACCOUNTED MONEY U/S 69. PENALTY PROCEEDINGS U/S 2 71(1)(C) IS HEREBY INITIATED. A.Y.2009-10 ON GOING THROUGH THE BANK STATEMENT OF SAVINGS BAN K ACCOUNTS MAINTAINED WITH AXIS BANK LTD. BARUIPUR BRANCH VIDE NO.259010100059 195 THE PEAK CREDIT WAS CALCULATED RS.24,19,211/- ON 30/09/2008 IN THE FOLL OWING MANNER :- JOYDEB MISTRY PAN : AKKPM7238E A.Y.2009-10 A/S NO.259010100059195 DATE DEBIT CREDIT NET CREDIT 23-FEB 100000 100000 29/02 300000 400000 14-MAR 200000 600000 24-MAR 335000 935000 24-MAR 230973 PO ISSUED OF RS.230,973/- NOT CONSIDERED BECAUSE TH EY NEVER AVAILABLE FOR REINVESTMENT. 31-MAR 300000 1235000 31-MAR 1167 1236167 - ADDED 2-APR 150000 1086167 20-MAY 400000 686167 22-MAY 100000 586167 27-MAY 75000 511167 10-JUN 620000 1131167 25-JUN 600000 531167 30-JUN 4187 1135354 4 ITA NOS.1512&1513/KOL/2015 JOYDEB MISTRY A.Y.2008-0 9 & 2009-10 14-JUL 300000 1435354 16-JUL 100000 1335354 18-JUL 300000 1035354 21-JUL 4550000 1485354 28-JUL 150000 201000 1536354 6-AUG 120000 1656354 14-AUG 400000 2056354 26-AUG 250000 1806354 2-SEP 400000 2206354 8-SEP 200000 2000354 15-SEP 751000 2751354 19-SEP 50000 2701354 22-SEP 300000 2401354 23-SEP 600000 3001354 27-SEP 650000 3651354 30-SEP 4024 3655378 PEAK 1-OCT 980000 2675378 22-OCT 200000 2475378 10-NOV 180000 2655378 11-NOV 10000 2645378 14-NOV 70000 2575378 24-NOV 90000 2485378 4-DEC 300000 2785378 16-DEC 100000 2685378 22-DEC 129000 2556378 27-DEC 500000 3056378 31-DEC 8138 3064516 10-JAN 12143 3076659 13-JAN 160000 2916659 20-JAN 300000 3216659 11-FEB 12143 3228802 18-FEB 500000 2728802 19-FEB 450000 3178102 10-MAR 12143 3190945 31-MAR 11417 3202362 (ADDITION OF RS.12,36,167/- TO BE MADE IN A.Y.2008- 09). HENCE HEREBY I ADD RS.24,19,211/- TO THE TOTAL INCO ME OF THE ASSESEE AS UNACCOUNTED MONEY U/S 69. PENALTY PROCEEDINGS U/S 2 71(1)(C) IS HEREBY INITIATED. 5. AGGRIEVED BY THE ORDER OF AO THE ASSESSEE PREFER RED APPEAL BEFORE CIT(A). BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT THE CASH DEPOSITS IN THE BANK ACCOUNT 5 ITA NOS.1512&1513/KOL/2015 JOYDEB MISTRY A.Y.2008-0 9 & 2009-10 REPRESENTED TURN OVER OF THE BUSINESS OF THE ASSES SEE AND THEREFORE THE ONLY INCOME AT 8% OF THE TOTAL DEPOSITS WHICH REPRESENTED THE TURN OVER SHOULD BE MADE AND NOT THE ADDITION OF PEAK CREDIT IN THE SAID BANK ACCOUNT. T HIS PLEA OF THE ASSESSEE WAS REJECTED BY CIT(A).THE CIT(A) HELD THAT THE ASSESSEE FAILED TO EXPLAIN THAT THE DEPOSITS IN THE BANK REPRESENTED TURN OVER OF THE ASSESSEES BUSIN ESS. THE CIT(A) HELD THAT THE ASSESSEE WILL NOT GET THE BENEFIT OF ESTIMATION OF INCOME ON THE BASIS OF THE TURN OVER BECAUSE IT WAS THE INCUMBENT ON THE PART OF THE ASS ESSEE TO SHOW THE NATURE AND SOURCE OF THE TURN OVER AND ALSO THE EVIDENCE OF PURCHASE AND SALE SINCE THE ASSESSEE FAILED TO DEMONSTRATE THAT THE CASH DEPOSITS IN THE BANK ACCO UNT REPRESENTED THE TURN OVER OF BUSINESS OF THE ASSESSEE WHICH WAS NOT DISCLOSED, T HE CIT (A) WAS OF THE VIEW THAT THE ADDITION OF PEAK CREDIT MADE BY THE AO WAS PROPER A ND DOES NOT CALL FOR ANY INTERFERENCE. THE CIT(A) ALSO NOTICED THAT THE AO H AD MADE AN ADDITION U/S 69A OF THE ACT BUT APPROPRIATE SECTION UNDER WHICH THE ADD ITION OUGHT TO HAVE BEEN MADE WAS SECTION 69 OF THE ACT. THE CIT(A) RECTIFIED THIS MI STAKE IN THE ORDER OF AO ALSO. THE ADDITION OF PEAK CREDIT FOR BOTH THE ASSESSMENT YEA RS BY THE AO WAS UPHELD BY CIT(A). 6. AGGRIEVED BY THE ORDERS OF CIT(A) THE ASSESSEE H AS PREFERRED THE PRESENT APPEALS BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFOR E US THAT THE CASH DEPOSITS IN THE BANK ACCOUNT REPRESENTED TURN OVER OF BUSINESS NOT DISCLOSED IN THE BOOKS OF ACCOUNTS. HE POINTED OUT THAT APART FROM TRADING IN BROOM STICK THE ASSESSEE STARTED A NEW LINE OF BUSINESS OF WHOLESALE DEALING IN BETELN UTS AND EXCAVATION OF PONDS IN COASTAL AREAS IN SOUTH BENGAL. THE TURN OVER ACHIEV ED IN SUCH NEW AREAS OF BUSINESS WERE DEPOSITED AT AXIS BANK, BARUIPUR BRANCH. IT WA S SUBMITTED BY HIM THAT FROM THE MODE OF DEPOSITS AND WITHDRAWALS IN THE BANK ACCOUN T A PRESUMPTION COULD BE DRAWN THAT DEPOSITS WERE IN FACT TURN OVER OF THE BUSINES S AND NOT ANY INVESTMENT OF ASSESSEES OWN MONEY. THE LD. COUNSEL REITERATED TH E SUBMISSIONS MADE BEFORE CIT(A) THAT 8% OF THE CASH DEPOSIT IN THE BANK ACCO UNT SHOULD BE ESTIMATED AS PROFITS OF UNDISCLOSED BUSINESS INSTEAD OF ADDITION OF PEAK CREDIT AS MADE BY THE REVENUE AUTHORITIES. THE LD. DR RELIED ON THE ORDER OF THE AO. 6 ITA NOS.1512&1513/KOL/2015 JOYDEB MISTRY A.Y.2008-0 9 & 2009-10 8. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO TH E RIVAL SUBMISSIONS. WE ARE OF THE VIEW THAT THE SUBMISSIONS MADE BY THE LD. CO UNSEL FOR THE ASSESSEE ARE NOT BACKED UP BY ANY EVIDENCE WHATSOEVER. AS RIGHTLY OB SERVED BY CIT(A, THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT AS ATTRIBUTABLE TO THE TURN OVER OF A NEW BUSINESS CARRIED ON BY THE ASSESSEE HAS NOT BEEN SUBSTANTIATED BY TH E ASSESSEE BY PRODUCING ANY EVIDENCE. BY ESTIMATING A PERCENTAGE OF THE DEPOSIT S IN THE BANK ACCOUNT TREATING IT AS A TURN OVER OF THE BUSINESS, THE ASSESSEE WOULD G ET THE BENEFIT OF DEDUCTION FROM SUCH TURN OVER THE COST OF SALES NAMELY COST OF PURCHASE AND OTHER EXPENSES TO CARRY ON THE UNDISCLOSED BUSINESS. THE ASSESSEE COULD NOT PRODUC E ANY EVIDENCE TO SUBSTANTIATE ITS CLAIM THAT THE DEPOSITS IN THE BANK ACCOUNT EMANAT ED FROM ANY BUSINESS CARRIED ON BY THE ASSESSEE. IN THESE CIRCUMSTANCES, THE AO TAKING NOTE OF THE FACT THAT THERE WERE DEPOSITS AS WELL AS WITHDRAWALS FROM THE BANK ACCOU NT, MADE THE ADDITION ONLY OF THE PEAK CREDIT OVER THE PREVIOUS YEAR IN THE BANK ACC OUNT. THIS APPROACH OF THE AO WAS IN ACCORDANCE WITH LAW AND WAS RIGHTLY CONFIRMED BY CIT(A). WE FIND NO JUSTIFIABLE REASONS TO INTERFERE WITH THE ORDER OF CIT(A). THE ORDER OF CIT(A) IS THEREFORE UPHELD. THUS BOTH THE APPEALS BY THE ASSESSEE ARE DISMISSED . 9. IN THE RESULT THE APPEALS BY THE ASSESSEE ARE DI SMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 13.12.2017. SD/- SD/- [DR.ARJUN LAL SAINI] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13.12.2017. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.JOYDEB MISTRY, VILL SLIKA, P.O.ALIDA, DIST. 24-PA RGANAS, 743355. 2.I.T.O., WARD-26(3), KOLKATA.. 3. CIT(A)-7, KOLKATA. 4. CIT-9, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVTE SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHES 7 ITA NOS.1512&1513/KOL/2015 JOYDEB MISTRY A.Y.2008-0 9 & 2009-10