Sh. Yati Garg, New Delhi V. ITO, New Delhi

ITA 1568/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6359 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 25-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SONBHADRA
• Assessee Lawyers: SUMIT GOE L
• Keywords: Peak credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI KULDIP SINGH: JUDICIAL MEMBER ITA NO. 1568/DEL/2014 A.Y. 2009-10 YATI GARG, VS. INCOME-TAX OFFICER, 639, RISHI NAGAR, WARD 25(2), NEW DELHI. RANI BAGH, DELHI-110034. PAN: AIAPG 1319 A ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI SUMIT GOEL CA RESPONDENT BY : SHRI V.R. SONBHADRA SR. DR DATE OF HEARING : 25-02-2016 DATE OF ORDER : 15-03-2016. O R D E R PER S.V. MEHROTRA, A.M:- THIS IS ASSESSEES APPEAL AGAINST THE CIT(A)S ORDE R DATED 16.12.2013 IN APPEAL NO. 241/11-12, RELATING TO A.Y. 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD FI LED RETURN DECLARING AN INCOME OF RS. 1,51,652/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO SHOW CAUSED THE ASSESSEE ON THE BASIS OF AIR INFORMATION THAT HE WAS MAINTAINING A BANK ACCOUNT NO. 3072000101207209 WITH THE PUNJAB N ATIONAL BANK, RANI BAGH, DELHI IN WHICH MOST OF THE CREDIT ENTRIES WERE IN C ASH. THE ASSESSEE EXPLAINED THAT REGARDING RETAIL TRADE OF ASSESSEES HUF, FOR WHICH AN ACCOUNT IN PUNJAB NATIONAL BANK, RANI BAGH, DELHI WAS MAINTAINED IN THE NAME O F YATI GARG, BEING KARTA OF 2 HUF, OFTEN USED TO GO OUT OF DELHI TO COLLECT THE C ONSIDERATION IN LIEU OF RETAIL SALE MADE AND DEPOSITED THEM IN ABOVE SAID BANK A/C THER E. IT WAS FURTHER EXPLAINED THAT WHENEVER THE ASSESSEE WENT TO COLLECT THE CONSIDERA TION, HE ALSO CARRIED SOME MONEY FROM HIS HOUSE IN ORDER TO MEET OUT TRAVELLI NG, LODGING & FOODING EXPENSES AND SURPLUS OF ABOVE CARRIED MONEY WAS ALSO DEPOSIT ED IN ABOVE SAID BANK ACCOUNT THERE. THE AO DID NOT ACCEPT THE ASSESSEES CONTENT ION. THE AO POINTED O0UT THAT IN AY 2008-09 ADDITION AMOUNTING TO RS. 23,12,875/- WAS ALSO MADE ON THE SAME GROUNDS. HE MADE ADDITION OF RS. 42,32,108/- IN RES PECT OF CASH DEPOSIT IN HIS BANK A/C. 3. LD. CIT(A) DISMISSED THE ASSESSEES APPEAL. 4. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFOR E US AND HAS TAKEN FOLLOWING GROUNDS OF APPEAL. 1. THAT UNDER THE FACTS AND CIRCUMSTANCES, LOWER AUTHORITIES ERRED IN LAW AND ON FACTS IN TREATING THE CREDITS O F RS. 42,32,108/- IN PNB BANK ACCOUNT AS BELONGING TO ASS ESSEE AGAINST CLAIMED AS OF HUF AND ERRED IN ADDING THE S AME U/S. 68 AND 69. 2. THAT THE CREDITS RELATES TO RETAIL TRADE OF HUF ON WHICH, AT THE MOST, THE PROFIT SHOULD BE CALCULATED U/S. 4 4 AF BEING 5% OF TURNOVER OF RS. 29,50,0001-, WHICH PROFIT CAL CULATES RS. 1,47,500/- 3. THAT WITHOUT PREJUDICE, TO G. N. 2, ALTERNATIVEL Y, IT SHOULD HAVE BEEN' TREATED AS RETAIL TURNOVER OF ASSESSEE A ND PROFIT SHOULD BE CALCULATED AT RS. 1,47,500/- @5% OF TURNO VER OF RS. 29,50,000/-. 3 4. THAT WITHOUT PREJUDICE, EVEN ON PRESUMING THESE CREDITS AS UN - EXPLAINED, THE ADDITION SHOULD NOT EXCEED B Y THE FIGURE OF PEAK OF SUCH CREDIT. 5. THAT NO INTEREST U/S. 234 A & 234 B SHOULD HAVE BEEN LEVIED. WITHOUT PREJUDICE, IN ANY CASE, THE CALCULA TIONS ARE EXCESSIVE AND ERRONEOUS. 5. FIRST WE TAKE UP GROUND NO. 4. AT THE TIME OF HE ARING, LD. COUNSEL FOR THE ASSESSEE FILED BEFORE US COPY OF TRIBUNALS ORDER I N ASSESSEES OWN CASE FOR AY 2008-09, WHEREIN THE TRIBUNAL HAS DIRECTED TO MAKE THE ADDITION OF PEAK CREDIT ONLY.LD. COUNSEL SUBMITTED THAT FACTS BEING IDENTIC AL, SIMILAR DIRECTIONS MAY BE GIVEN FOR CURRENT ASSESSMENT YEAR. 6. LD. DR RELIED ON THE ORDERS OF LOWER REVENUE AUT HORITIES. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE RECORD OF THE CASE. AS NOTED EARLIER, THE ASSESSEE HAS MADE THE ADDITION ON THE SAME LINE AS WAS DONE IN AY 2008-09. WE FIND THAT IN AY 2008-09 TRIB UNAL IN PARAS 5 & 6 HAS OBSERVED AS UNDER: 5. THE AR STARTED THE ARGUMENTS WITH GROUND NO. 4 AND THE LD. DR HAS NOT PLACED ANY SERIOUS OBJECTION IN THIS REGARD. APROPOS GROUND NO.4, THE AR PLACED RELIANCE ON VARI OUS DECISIONS INCLUDING DECISION OF JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF COMMISSIONER OF INCOME TAX VS KULWANT RAI 291 ITR 36 (DEN; DECISION OF HON'BLE BOMBAY HIG H COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS SHRI K AMAL KUMAR BHOLA IN ITA NO. 578112010 DATED 28.09.2011; DECISION OF HON'BLE M.P. HIGH CORUT IN THE CASE OF COMMISSIONER OF INCOME TAX VS RAJEEV SHUKLA 296 ITR 743 AND DECISION OF IT AT DELHI 'C' BENCH IN ITA NO.41831DE1L2010 DATED 12.11.2010. ON THE BASIS OF THESE 4 DECISIONS RELIED BY THE AR, IT HAS BEEN CONTENDED T HAT WHEN THERE IS A SMALL DEPOSIT DURING THE WHOLE YEAR IN T HE BANK ACCOUNT OF THE ASSESSEE, THEN TOTAL AMOUNT OF DEPOS ITS DURING THE FINANCIAL YEAR CANNOT BE TREATED AS INCOME IN T HE HANDS OF ASSESSEE. AT THE MOST, THE PEAK OF RS. 1,53,123 MAY BE TAKEN AS INCOME OF THE ASSESSEE OUT OF THESE DEPOSITS OF RS. 23,12,875. LD. DR FAIRLY ACCEPTED THAT THE DEPARTMENT HAS NO S ERIOUS OBJECTION IF THE AMOUNT OF PEAK CREDIT IS TAKEN AS INCOME OF THE ASSESSEE OUT OF TOTAL DEPOSITS MADE DURING THE FINA NCIAL YEAR TO THE BANK ACCOUNT OF THE ASSESSEE. 6. SINCE ADMITTEDLY, THERE WAS A DEPOSIT OF RS.23, 12,875/- DURING THE FINANCIAL YEAR TO THE BANK ACCOUNT OF TH E ASSESSEE WHICH WAS DEPOSITED IN SALARY AMOUNTS OF THOUSANDS ON VARIOUS DATES, THEN IT CANNOT BE JUSTIFIED IF ENTIRE AMOUNT OF DEPOSITS DURING THE YEAR IS CONSIDERED AS INCOME IN THE HAN DS OF ASSESSEE. RESPECTFULLY FOLLOWING THE ABOVE REFERRE D DECISIONS, SPECIALLY THE DECISION OF HON'BLE JURISD ICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS KULWANT RAI (SUPRA) AND DECISION OF COORDINATE BENCH OF DEL HI IN THE CASE OF ITO VS HARI SHANKAR (SUPRA), WE HOLD THAT I N THIS SITUATION, ONLY THE PEAK CREDIT CAN BE TAKEN AS INC OME OUT OF THESE DEPOSITS MADE DURING THE YEAR TO THE BANK ACC OUNT OF THE ASSESSEE. ACCORDINGLY, IN VIEW OF ABOVE, GROUND NO. 4 OF THE ASSESSEE IS ALLOWED WITH THIS DIRECTION TO THE ASSE SSING OFFICER THAT THE ASSESSING OFFICER SHALL TAKE ONLY PEAK CRE DIT AS INCOME OF THE ASSESSEE OUT OF THESE DEPOSITS AFTER AFFORDI NG DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. FINALLY, GR OUND NO 4 OF THE ASSESSEE IS ALLOWED WITH THE DIRECTION TO THE A SSESSING OFFICER AS INDICATED ABOVE . 8. FACTS BEING IDENTICAL AND NO NEW FACT HAVING BEE N BROUGHT TO OUR NOTICE BY THE DEPARTMENT TO TAKE A CONTRARY VIEW, RESPECTFULL Y FOLLOWING THE DECISION OF THE TRIBUNAL FOR AY 2008-09, WE DIRECT THE AO TO MAKE T HE ADDITION OF ONLY PEAK 5 CREDIT AS INCOME OF THE ASSESSEE OUT OF THESE DEPOS ITS AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ORDER AC CORDINGLY. 9. AS WE HAVE ALLOWED GROUND NO. 4 FOR STATISTICAL PURPOSES, OTHER GROUNDS RAISED BY THE ASSESSEE HAVE BECOME INFRUCTUOUS. 10. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT ON 15-03-2016. SD/- SD/- (KULDIP SINGH) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:15-03-2016. MP: C OPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR