SHRIPRAKASH AGRAWAL, Nagpur V. ITO-WARD-2(3), Nagpur

ITA 154/NAG/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84683 (ITAT-NAGPUR)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 01-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M MANI
• Keywords: Peak credit
• Section: 131

Judgement Text

NAGPUR IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR . , , ! , ' BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIVEK VARMA, JM ITA NO. 154/NAG/2014 (ASSESSMENT YEAR : 2009-10) SHRIPRAKASH AGRAWAL, RESHAM OLI,DYES MARKET, JAGNATH BUDHWARI, NAGPUR -440 002 # # # # ./ PAN :ABDPA 5823 B $% / VS. INCOME TAX OFFICERWARD -3(2), SARAF CHAMBERS, SADAR, NAGPUR-440 001 ( #& / APPELLANT) : ( ' (#& / RESPONDENT) #& ) * / APPELLANT BY : SHRI M MANI '(#& ) * / RESPONDENT BY : SHRI NARENDRA KANE % + ) , / DATE OF HEARING : 09.09.2014 -./ ) , /DATE OF PRONOUNCEMENT : 29.10.2014 O R D E R ! , . ./ PER VIVEK VARMA, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORD ER OF CIT(A), NAGPUR, DATED 31.12.2013, WHEREIN THE FOLLOWING GRO UNDS HAVE BEEN RAISED: 1. THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE O RDER OF THE ASSESSING OFFICER. 2. THAT THE LEARNED CIT(A) ERRED IN NOT ACCEPTING THE P EEK CREDITS OF THE ASSESSEE AS WORKED OUT AT RS. 13,32,846/- AS THE BASIS OF ADDITION. 3. THAT THE LEARNED CIT(A) ERRED IN NOT ACCEPTING THE OP ENING CAPITAL OF THE ASSESSEE OF RS. 20 LAKHS. 4. NO PROPER OPPORTUNITY WAS GIVEN TO EXPLAIN IN DETAIL THE ABOVE CONTENTIONS OF THE ASSESSEE. (A) THE WITHDRAWALS OF MONEY HAS NOT BEEN CONSIDERED AT ALL IN DETERMINING THE TOTAL INCOME. (B) CHEQUES OTHER GROUNDS THAT MAY BE TAKEN AT THE TIME O F HEARING. 5. ANY OTHER GROUNDS THAT MAY BE TAKE AT THE TIME OF HEARING. 2. THE SOLITARY ISSUE RUNNING THROUGH THE GROUNDS I S THE CASH DEPOSIT OF RS. 80,80,838/- IN THE BANK ACCOUNT, WHICH ACCOR DING TO THE AO HAD NOT BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE A ND THEREFORE, THE AO ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3. THE ASSESSEE APPROACHED THE CIT(A), BEFORE WHOM THE ASSESSEE STATED IN THE STATEMENT RECORDED U/S 131 THAT HE US ED TO PROVIDE SHORT TERM LOANS TO FRIENDS AND RELATIVES. IT IS THESE RE TURNS OF MONEY WHICH USED TO BE DEPOSITED BACK INTO HIS BANK ACCOUNTS, M AINTAINED WITH 2 SHRIPRAKASH AGRAWAL ITA NO. 154/NAG/2014 VARIOUS BANKS. THE ASSESSEE ALSO ADMITTED THAT HE C OULD NOT GIVE FULL DETAILS WITH THIS REGARD AS TO WHO ALL HE HAD ADVAN CED THE LOANS. 4. IN THE REPRODUCED PORTION OF THE CIT(A), THE ASS ESSEE HAD PRAYED THE REVENUE AUTHORITIES THAT THE ASSESSEE SH OULD BE GIVEN THE BENEFIT OF PEAK AND ALSO THAT THE OPENING BALAN CE BE REMOVED FROM THE COMPUTATION OF AMOUNT SOUGHT TO BE ADDED. ACCORDINGLY, THE ASSESSEE PROVIDED PEAK CALCULATION, WHICH AMOUN TED TO RS. 13,32,846/-. THE ASSESSEE, THUS PRAYED BEFORE THE R EVENUE AUTHORITIES THAT IF AT ALL THE ADDITION IS TO BE SU STAINED THEN IT SHOULD BE LIMITED TO THE PEAK CREDIT OF RS. 13,32,8 46/- AND NOT THE AGGREGATE OF RS. 88,80,838/-. 5. THE CIT(A), AFTER CONSIDERING THE ARGUMENTS OF T HE ASSESSEE AND THE EVIDENCES SUBMITTED, CONCLUDED THAT ASSESSM ENT PROFILE OF THE ASSESSEE IN THE PRECEDING YEARS, DOES NOT SHOW THAT THE ASSESSEE HAD ENOUGH BALANCE TO PROVIDE SHORT TERM L OANS TO RELATIVES AND FRIENDS OF THIS QUANTUM. HE, THEREFOR E, SUSTAINED THE ADDITION MADE BY THE AO. 6. AGAINST THE ORDER OF THE CIT(A), THE ASSESSEE IS BEFORE THE ITAT. 7. BEFORE US THE AR REITERATED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES AND ALSO PLEADED THAT THE REVEN UE AUTHORITIES HAVE SIMPLY GONE ON THE CREDITS IN THE BANK ACCOUNT , WITHOUT TAKING INTO CONSIDERATION THE DEBITS IN THE ACCOUNT. THE A R ALSO SUBMITTED THAT THE REVENUE AUTHORITIES WHILE TAKING THE CREDI TS, ERRED IN TAKING INTO CONSIDERATION THE OPENING BALANCE OF RS. 20,00 ,000/-, WHICH IN ANY CASE SHOULD NOT FIGURE IN THE CURRENT YEARS' DE POSITS. 8. THE AR FURTHER PLEADED THAT THE ASSESSEE HAD PRO DUCED BEFORE THE REVENUE AUTHORITIES THE COMPUTATION OF PEAK CRE DIT, WHICH WAS SUMMARILY REJECTED. 3 SHRIPRAKASH AGRAWAL ITA NO. 154/NAG/2014 9. THE AR, THEREFORE, PLEADED THAT THE REVENUE AUTH ORITIES BE DIRECTED TO TAKE INTO CONSIDERATION THE DEBITS AND CREDITS AND IN EFFECT THE PEAK COMPUTATION. 10. THE DR ON THE OTHER HAND SUPPORTED THE ORDERS O F THE REVENUE AUTHORITIES. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PE RUSED THE ORDER OF THE REVENUE AUTHORITIES AND ALSO THE PAPER PLACED ON RECORD. 11. AT THE OUTSET, WE AGREE WITH THE ARGUMENT OF TH E AR THAT IF CREDITS ARE BEING ADDED, THEN CORRESPONDINGLY DEBIT S SHOULD ALSO BE TAKEN INTO CONSIDERATION. IN SUCH A SITUATION, THE MOST ACCEPTABLE METHOD TO CONSIDER BOTH SIDES OF BANK STATEMENT IS TO TAKE /COMPUTE PEAK CREDIT FOR A PERIOD. TO COMPUTE THE P EAK CREDIT, THE TRANSACTIONS OF A PERIOD ARE TO BE CONSIDERED, THEREFORE, THE OPENING BALANCE FEATURING ON THE FIRST DAY OF THE ACCOUNTIN G PERIOD HAS TO BE IGNORED. 12. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A ) AND RESTORE THE ISSUE TO THE FILE OF THE AO TO COMPUTE THE ADDITION ON THE BASIS OF PEAK COMPUTATION, IGNORING THE OPENING BALANCE. 13. THE GROUND, THUS, RAISED HEREINABOVE ARE ALLOWE D. 14. IN THE RESULT, THE APPEAL AS FILED BY THE ASSES SEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/10/2014 SD/- SD/- ( . ) ( ! ) ( D. KARUNAKARA RAO ) ( VIVEK VARMA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER NAGPUR; (MUMBAI) 0% DATED 29/10/2014 4 SHRIPRAKASH AGRAWAL ITA NO. 154/NAG/2014 . % . ./ * CHAVAN , SR. PS 1 1 1 1 ) )) ) ', ', ', ', 2 /, 2 /, 2 /, 2 /, / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '(#& / THE RESPONDENT. 3. 3 ( ) -I, NAGPUR / THE CIT(APPEALS)-I, NAGPUR 4. 3 II, NAGPUR/ CIT -II, NAGPUR 5. 6 7 ',% , , NAGPUR / DR, ITAT, NAGPUR 6. 7 ! 8 + / GUARD FILE. 1 % 1 % 1 % 1 % / BY ORDER, BY ORDER/ / TRUE COPY / / SENIOR PRIVATE SECRETARY ITAT, MUMBAI CAMP: NAGPUR