KEDARI DATTU BHOPALE, Kolhapur V. ITO, Kolhapur

ITA 1581/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1111 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 14-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: MAYURESH DOSHI
• Keywords: Peak credit
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1581/PN/2013 $& ' !(' / ASSESSMENT YEAR : 2009-10 KEDARI DATTU BHOPALE, 1325/B/22/1B, E WARD, SHIVAJI UDYAMNAGAR KEDAR VIJAY KOLHAPUR PAN : AIEPB008R ....... / APPELLANT )& / V/S. INCOME TAX OFFICER, WARD 1(3), KOLHAPUR / RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO AND SHRI MAYURESH DOSHI REVENUE BY : SHRI B.C. MALAKAR / DATE OF HEARING : 02-07-2015 / DATE OF PRONOUNCEMENT : 29-09-2015 * / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF COMM ISSIONER OF INCOME TAX (APPEALS)-KOLHAPUR DATED 10-05-2013 FOR TH E ASSESSMENT YEAR 2009-10. IN APPEAL, THE ASSESSEE HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) BY RAISING 6 GROUNDS. THE LD. AR OF THE ASSESSEE HAS NOT PRESSED GROUNDS NO. 4 AND 5 AND GROUND NO. 6 IS GENERAL. IN GROUND NO. 1 AND 2, THE ASSESSEE HAS Q UESTIONED THE 2 ITA NO. 1581/PN/2013, A.Y. 2009-10 FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING ADDITION OF RS.15,65,935/-, U/S. 69 OF THE ACT IN RESPECT OF U NEXPLAINED CASH DEPOSITS IN SAVING BANK ACCOUNT NO. 5123 OF THE ASS ESSEE MAINTAINED WITH AJARA URBAN CO-OPERATIVE BANK, BRANCH R ADHANAGARI. IN GROUND NO. 3 THE ASSESSEE HAS MADE AN ALTERNATE PR AYER TO RESTRICT THE ADDITION TO THE EXTENT OF PEAK DEPOSITS IN THE AFOR EMENTIONED SAVING BANK ACCOUNT. 2. THE APPEAL HAS BEEN FILED WITH A DELAY OF 4 DAYS. THE A SSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY. THE APPLICAT ION IS SUPPORTED BY AN AFFIDAVIT CITING REASONS FOR DELAY. AFTER P ERUSAL OF SAME, WE ARE SATISFIED THAT THE DELAY IN FILING OF APPEAL IS NO T INTENTIONAL OR DELIBERATE. THE DELAY OF 4 DAYS IN FILING OF THE APPEAL IS CONDONED AND THE APPEAL IS ADMITTED TO BE HEARD ON MERITS. 3. THE BRIEF FACTS OF THE CASE ARE : THE ASSESSEE IS ENG AGED IN THE BUSINESS OF SUPPLYING GOATS AND IS ALSO OPERATING A LIQUOR SHOP. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEA R 2009-10 ON 30-09-2009 DECLARING TOTAL INCOME OF RS.3,39,660/-. THE CAS E OF THE ASSESSEE WAS SELECTED FOR COMPULSORY SCRUTINY ON THE BA SIS OF AST INSTRUCTIONS. ACCORDINGLY, NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 19-08-2010. THE DEPARTMENT RECEIVED ITS INFORMATION THAT THERE WERE CASH DEPOSITS EXCEEDING RS.10,00,000/- IN THE SAVING BANK ACCOUNT MAINTAINED BY THE ASSESSEE WITH AJARA URB AN CO-OPERATIVE BANK LTD., DISTT.-KOLHAPUR, BRANCH RADHANAG ARI. THE SAID SAVING BANK ACCOUNT WAS NOT DISCLOSED BY THE ASSES SEE. ON EXAMINATION OF BANK ACCOUNT OF THE ASSESSEE, IT WAS FOUND THAT DURING THE RELEVANT PERIOD CASH DEPOSITS TOTAL AMOUNTING TO RS .15,65,935/- WERE MADE ON VARIOUS DATES. DURING THE ASSESSMENT PRO CEEDINGS, THE ASSESSEE STATED THAT NO BOOKS OF ACCOUNT WERE MAINTAIN ED BY THE 3 ITA NO. 1581/PN/2013, A.Y. 2009-10 ASSESSEE AND THE RETURN WAS FILED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 44AF OF THE ACT. THE ASSESSEE WAS RUNNING A CO UNTRY LIQUOR SHOP. THE LICENSE OF THE SHOP WAS IN THE NAME OF SOU. SAR ALABAI NARAYANRAO JADHAV. THE ASSESSEE WAS PAYING ROYALTY OF RS.30,000/- PER MONTH TO SOU. SARALABAI NARAYANRAO JADHAV. THE ASS ESSEE FILED TRADING AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 3 1-03-2009 IN RESPECT OF LIQUOR BUSINESS. THE ASSESSEE WAS ALSO ENGAGE D IN TRADING OF GOATS IN THE NAME OF RAHUL MOTTON SHOP. IN THIS BUSINE SS THE ASSESSEE HAD SHOWN SALE OF GOATS TO THE TUNE OF RS.22,43,570/-. THE ASSESSEE HAD DECLARED GP OF RS.4,03,842/- AND NET PROFIT OF RS.2,57,878 /-. THE ASSESSING OFFICER HELD THAT SINCE FROM BOTH THE BUSINESSES, THE GROSS SALES OF ASSESSEE AMOUNTED TO RS.80,39,787/-, THE ASSESSE E HAS VIOLATED THE PROVISIONS OF SECTION 44AB OF THE ACT, IN NOT G ETTING THE ACCOUNTS AUDITED. FOR THE SAID VIOLATION SEPARATE PENAL P ROCEEDINGS U/S. 274 R.W.S. 271B WERE INITIATED. AS REGARDS SAVING BAN K ACCOUNT WITH AJARA URBAN CO-OPERATIVE BANK LTD., THE ASSESSEE A DMITTED THAT THE SAID ACCOUNT WAS NOT DISCLOSED. THE ASSESSEE STAT ED THAT THE DEPOSITS IN THE SAID ACCOUNT WERE FROM SALE OF GOATS. IT WAS FURTHER STATED THAT THE ASSESSEE HAD ISSUED CHEQUES FROM THE SAID ACCOUNT IN THE NAME OF SHRI UTTAM INGAWALE ONE OF HIS EMPLOYEE, PURP ORTEDLY FOR PURCHASE OF GOATS. THE CLOSING BALANCE IN THE SAID ACCOUN T AS ON 31-03-2009 WAS RS.56,652/-. BEFORE THE ASSESSING OFFICER T HE ASSESSEE PROPOSED THAT THE ADDITION IN RESPECT OF SAID A CCOUNT MAY BE MADE AT THE RATE OF GROSS PROFIT OF 11.50% EARNED FROM OT HER BUSINESS ACTIVITIES. THE ASSESSING OFFICER REJECTED THE CONTENTIONS OF THE ASSESSEE AND MADE ADDITION OF THE ENTIRE AMOUNT. AGGRIEVED BY THE ASSESSMENT ORDER DATED 29-12-2011, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPU GNED 4 ITA NO. 1581/PN/2013, A.Y. 2009-10 ORDER REJECTED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE ASSESSMENT ORDER. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. SHRI SUNIL GANOO AND SHRI MAYURESH DOSHI APPEARING ON B EHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN TRADING OF GOATS. THE UNDISCLOSED SAVING BANK ACCOUNT MAINTAINED W ITH AJARA URBAN CO-OPERATIVE BANK LTD. WAS USED BY THE ASSESSEE FOR THE DEPOSIT OF SALE PROCEEDS FROM GOAT BUSINESS. THE LD. AR PLACED ON RECORD A COPY OF THE BANK STATEMENT TO SHOW THAT WITHDRAWALS WE RE MADE FROM THE BANK VIDE CHEQUE. ALL THE CHEQUES WERE ISSUED IN THE NAME OF UTTAM INGAWALE. THE LD. AR SUBMITTED THAT SHRI UTTAM ING AWALE IS AN EMPLOYEE OF THE ASSESSEE AND THE PAYMENTS WERE MADE TO HIM FOR THE PURCHASE OF GOATS. THE LD. AR ALSO REFERRED TO THE STATEM ENT OF ASSESSEE RECORDED DURING THE ASSESSMENT PROCEEDINGS ON 11-11-2 011. IN REPLY TO Q. NO. 11, THE ASSESSEE HAS ADMITTED THAT THE BANK A CCOUNT IN AJARA URBAN CO-OPERATIVE BANK LTD. WAS NOT DISCLOSED, HOWEVER, THE TRANSACTIONS IN THE SAID BANK ACCOUNT RELATES TO PURCHA SE AND SALE OF GOATS. THE LD. AR CONTENDED THAT THE AUTHORITIES BELOW HAVE NOT CONSIDERED THE EXPLANATION FURNISHED BY THE ASSESSEE AND MADE ADDITION OF THE ENTIRE AMOUNT DEPOSITED IN THE BANK U/S. 69. THE SAID ADDITION HAS BEEN MADE IN AN ARBITRARY AND UNJUSTIFIED MAN NER. THE GOAT BUSINESS CARRIED OUT BY THE ASSESSEE WAS NOT DISC LOSED. THUS, IF INCOME FROM THE SAID BUSINESS IS TO BE TAXED, THE ASSESS EE IS ENTITLED TO CLAIM EXPENDITURE IN RESPECT OF SAID BUSINESS. THE ENTIRE CASH DEPOSITS CANNOT BE ADDED IN THE INCOME RETURNED BY THE ASSESSE E. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS EARNED GROSS PROFIT OF 11.50% FROM HIS OTHER RELATED BUSINESS, THE ADDITION CAN BE MADE APPLYING SAME RATE. THE LD. AR MADE AN ALTERNATE PRAYER, THAT SINCE THERE WERE DEPOS ITS AND WITHDRAWALS FROM THE BANK, THE ADDITION CAN BE MADE ON T HE PEAK CREDIT. IN SUPPORT OF SUBMISSIONS, RELIANCE WAS PLACED ON THE CASE OF 5 ITA NO. 1581/PN/2013, A.Y. 2009-10 RAHUL VIJAY MUNOT VS. ITO IN ITA NO. 1923/PN/2013 FOR TH E ASSESSMENT YEAR 2009-10 DECIDED ON 31-03-2015. THE LD . AR PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER AND ACCEPTING THE A PPEAL OF THE ASSESSEE. 5. ON THE OTHER HAND SHRI B.C. MALAKAR REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE FINDINGS OF COMMISSIONE R OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION U/S. 69 OF TH E ACT. THE LD. DR SUBMITTED THAT THE ASSESSEE HAD MAINTAINED PROFIT AND LOSS ACCOUNT WITH RESPECT TO HIS GOAT BUSINESS. THE ASSESSE E DISCLOSED ALL THE BANK ACCOUNTS EXCEPT THE SAVING BANK ACCOUNT WITH AJARA URBAN CO-OPERATIVE BANK LTD. THE SAID BANK ACCOUNT WAS NOT DISCLOSED BY THE ASSESSEE DELIBERATELY. THE ASSESSEE HAS DISCLOSED IN COME FROM GOAT BUSINESS AS INCOME FROM RAHUL MOTTON SHOP. THIS FACT HAS BEEN MENTIONED BY THE ASSESSING OFFICER IN PARA 3 OF HIS ORDER. THIS FINDING OF THE ASSESSING OFFICER HAS NOT BEEN DISPUTED BY THE AS SESSEE EITHER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) OR BEFORE T HE TRIBUNAL. THE ASSESSEE HAS NOT BEEN ABLE TO SHOW ANY N EXUS BETWEEN SALE AND PURCHASE OF GOATS AND THE CASH DEPOSITS AND W ITHDRAWALS IN THE UNDISCLOSED BANK ACCOUNT. THEREFORE, THE ASSESSEE C ANNOT BE GIVEN THE BENEFIT OF PEAK CREDIT. THE LD. DR FURTHER SUBMITTED T HAT NO REASON HAS BEEN GIVEN BY THE ASSESSEE FOR NOT DISCLOSING THE SA ID BANK ACCOUNT IF THE ASSESSEE WAS CARRYING GOAT BUSINESS THROUGH THE SAID BANK ACCOUNT. THE LD. DR PRAYED FOR DISMISSING THE APPEAL OF TH E ASSESSEE AND CONFIRMING THE IMPUGNED ORDER. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BE LOW. IT IS AN UNDISPUTED FACT THAT THE SAVING BANK ACCOUNT MAINTAINED WITH AJARA URBAN CO-OPERATIVE BANK LTD. WAS NOT DISCLOSED BY THE A SSESSEE. A 6 ITA NO. 1581/PN/2013, A.Y. 2009-10 PERUSAL OF THE BANK STATEMENT PLACED ON RECORD SHOWS T HAT CASH DEPOSITS TO THE TUNE OF RS.15,65,935/- HAVE BEEN MADE IN THE SAID BANK ACCOUNT OVER THE PERIOD OF TIME. A FURTHER PERUSA L OF THE BANK STATEMENT SHOWS THAT THE PAYMENTS THROUGH CHEQUE HA VE BEEN MADE FROM THE SAID BANK ACCOUNT TO ONE SHRI UTTAM INGAWALE. HOWEVER, IT IS NOT COMING FROM THE RECORDS WHETHER THE PAYMENTS WERE MADE FOR BUSINESS PURPOSE OR FOR ANY OTHER PURPOSE. EXCEPT FOR THE ORAL SUBMISSIONS MADE BY THE LD. AR OF THE ASSESSEE NO DOCUME NT HAS BEEN PLACED ON RECORD TO SHOW THAT THE PAYMENTS WERE MADE BY THE ASSESSEE TO SHRI UTTAM INGAWALE FOR PURCHASE OF GOATS. IN THE AS SESSMENT ORDER, THE ASSESSING OFFICER HAS GIVEN A CATEGORIC FINDING THAT THE ASSESSEE IS ENGAGED IN TRADING OF GOATS AND THE SALE OF GOATS IS TO T HE TUNE OF RS.22,43,570/-. THUS, THE SUBMISSIONS OF THE LD. AR OF THE AS SESSEE THAT THE ASSESSEE HAS NOT DISCLOSED GOAT BUSINESS IN TH E RETURN OF INCOME DOES NOT HOLD GROUND. THE FINDINGS OF THE ASSESSING OFFICER HAVE NOT BEEN CHALLENGED BY THE ASSESSEE EITHER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) OR BEFORE THE TRIBUNA L. THE ASSESSEE HAS NOT PLACED ON RECORD ANY DOCUMENTARY E VIDENCE OR HAS EXAMINED ANY PERSON TO SUBSTANTIATE HIS CLAIM THAT THE TRANSACTIONS IN THE SAVING BANK ACCOUNT MAINTAINED WITH AJARA URBAN CO- OPERATIVE BANK LTD. WERE ARISING FROM GOAT BUSINESS. IN THE FACTS A ND CIRCUMSTANCES OF THE CASE, WE ARE ALSO NOT CONVINCED TO ACCEPT THE THEORY OF PEAK CREDIT OR RESTRICTING ADDITION ON THE BASIS OF GP RATE. THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE ON THE DEC ISIONS OF CO-ORDINATE BENCH IN THE CASE OF RAHUL VIJAY MUNOT V S. ITO (SUPRA). WE FIND THAT IN THE SAID CASE THE TRIBUNAL HAD UPHELD THE FINDINGS OF ASSESSING OFFICER IN APPLYING THE PEAK CREDIT. THE FACTS IN THE PRESENT CASE ARE NOT ON THE SAME FOOTING. THEREFORE, THE DECISION RENDERED IN 7 ITA NO. 1581/PN/2013, A.Y. 2009-10 THE SAID CASE CANNOT BE APPLIED IN THE FACTS AND CIRCUMS TANCES OF THE CASE IN HAND. 7. THE IMPUGNED ORDER CONFIRMING THE ADDITION OF RS.15,65,935 /-, U/S. 69 IS WELL REASONED. WE DO NOT FIND ANY REASON TO IN TERFERE WITH THE SAME. THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE LACK MERIT, THEREFORE, THE APPEAL OF THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON TUESDAY, THE 29 TH DAY OF SEPTEMBER, 2015. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 29 TH SEPTEMBER, 2015 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A), KOLHAPUR 4. ' / THE CIT-II, KOLHAPUR 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. / // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE