Sayed Abubacker Rliyaz, Belgaum V. Principal Commissioner of Income Tax, Belgaum., Belgaum

ITA 165/PAN/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1491 (ITAT-PANAJI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 22-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SMRITI BHARDWAJ
• Assessee Lawyers: ASHOK G MU DNUR
• Keywords: Unexplained investment; Peak credit; Revised return
• Section: 40A(3); 143(3); 69; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 165 /PNJ/201 5 (ASST. YEAR : 20 1 0 - 1 1 ) SRI SYED ABUBACKER RIYAZ, C/O S.M.STEELS, KARNATAK GARRAGE, 4278, PATIL GA LLI, BELAGAVI. VS. P CIT, BELAGAVI. PAN NO. AAPPR 3107 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHOK G. MUDNUR C A. DEPARTMENT BY : SMT. SMRITI BHARDWAJ - D R DATE OF HEARING : 05 / 0 8 /2015 . DATE OF PRONOUNCEMENT : 05 / 0 8 /201 5 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF PRINCIPAL COMMISSIONER OF INCOME TAX , BEL A GA VI , DATED 2 5 /0 3 /201 5 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE PRINCIPAL COMMISSIONER OF INCOME TAX ERRED IN INVOKING SEC. 263 OF THE ACT AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SEC. 143(3) OF THE ACT FOR ASSESSMENT YEAR 2010 - 11. 3 . BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE MADE CASH DEPOSITS ON VARIOUS DATES DURING THE YEAR, TOTALLING TO RS. 53,13,450/ - IN THE UNION BANK OF INDIA , MAPUSA , GOA. THE ASSE SSEE SUBMITTED THAT CASH DEPOSITS ARE PURCHASE AND SALE PROCEEDS OF RETAIL BUSINESS AND 2 ITA NO. 165 /PNJ/201 5 ACCORDINGLY FILED A REVISED RETURN DECLARING ADDITIONAL INCOME OF RS. 16,13,259/ - WHICH WAS SHOWN UNDER THE HEAD INCOME FROM OTHER SOURCES UNDER SUB - HEAD OTHER INCOME . THIS WAS COMPUTED BY THE ASSESSEE BEING PROFIT AT THE RATE OF 8% RS. 4,70,055/ - AND UNEXPLAINED INVESTMENT IN THE BUSINESS OF RS. 11,43,204/ - WHICH WAS THE PEAK DEPOSIT IN THE BANK ACCOUNT. THE ASSESSING OFFICER IN THE ABSENCE OF PROPER DETAILS/DOCUMENTS, ASKED THE ASSESSEE TO WORK OUT THE PEAK ( DEPOSIT ) CREDIT WHICH WAS CLAIMED AT RS. 13,16,763/ - AND SINCE THE ASSESSEE HAD DECLARED MORE INCOME THAN THE PEAK CREDIT, THE ASSESSING OFFICER ACCEPTED THE INCOME RETURNED BY THE ASSESSEE IN HIS REVISED RETURN OF INCOME. 4 . THE PRINCIPAL COMMISSIONER OF INCOME TAX VIDE ORDER PASSED UNDER SEC. 263 OF THE ACT DATED 25/03/2015 HELD THAT THE ASSESSING OFFICER HAD NOT CARRIED OUT ANY VERIFICATION REGARDING THE CLAIM OF THE ASSESSEE FOR CARRYING ON RETAIL BUSINESS IN STEEL . HE OBSERVED THAT IF THE CLAIM OF THE ASSESSEE WAS TRUE , THEN THE ASSESSEE WOULD HAVE MAINTAINED BOOKS OF ACCOUNTS AND GOT THE SAME AUDITED UNDER SEC .44AB . FURTHER, ALL PAYMENTS FOR PURCHASES AS PER ASSESSEES VERSION MADE IN CASH AND, THEREFORE, THERE WAS VIOLATION OF SEC. 40A(3) OF THE ACT. THE ASSESSING OFFICER ACCEPTED THE CLAIM OF THE ASSESSEE THAT HE WAS CARRYING ON RET A IL BUSINESS IN STEEL WITHOUT ANY DOCUMENTARY EVIDENCE AND WITHOUT ANY RECORD OF PURCHASE OR SALES BEING FURNISHED BY THE ASSESSEE. ACCORDING TO PRINCIPAL COMMISSIONER OF INCOME TAX, THE METHODOLOGY OF PEAK CREDIT IS TO BE ADOPTED WHERE IT IS ACCEPTED TH A T THERE IS A TURNOVER AND EXISTENCE OF WHICH THE ASSESSEE HAS TO PROVE FOR WORKING OUT THE PEAK CREDITS. THE EXISTENCE OF TURNOVER AND THE CYCLE OF TURNOVER ARE TO BE SEEN. THE ASSESSEE HAS NOT BEEN ABLE TO GIVE ANY PROOF REGARDING ANY BUSINESS OR TRADE BEING CARRIED OUT. H E OBSERVED THAT THE MANNER IN WHICH THE DEPOSITS AND WITHDRAWALS HAVE BEEN MADE DOES NOT INDICATE ANY TRADE OR BUSINESS. THE BANK ACCOUNT REVEALS TH A T THE CASH HAS BEEN DEPOSITED NEARLY ON 3 ITA NO. 165 /PNJ/201 5 DAILY BASIS OR EVERY 2 - 3 DAYS IN AMOUNTS OF THOUSAND S VIZ RS. 10,000/ - , RS. 32,000/ - , RS. 20,000 / - , RS.50,000/ - , RS. 12,540/ - , RS. 5,360/ - ETC. THE TOTAL DEPOSITS AFTER 20 - 25 DAYS IS WITHDRAWN IN A SINGLE INSTANCE IN LAKHS LEAVING A MEAGRE BALANCE IN THE BANK ACCOUNT. IN ABSENCE OF ANY EVIDENCE GIVEN BY TH E ASSESSEE REGARDING HIS BUSINESS OF IRON AND STEEL BEING CARRIED OUT AND ALSO THE FACT THAT THE BUSINESS OF SALE AND PURCHASE OF IRON AND STEEL HAS NOT BEEN DISCLOSED TO THE SALES TAX D EPARTMENT IN GOA, (WHEREBY THERE IS NO CORROBORATIVE EVIDENCE) THE IRRESISTIBLE CONCLUSION IS THAT THE ENTIRE DEPOSIT OF RS. 58,75,690/ - IS THE UNEXPLAINED INVESTMENT OF THE ASSESSEE IN HIS BANK ACCOUNT , THE SOURCE OF WHICH REM A IN UNEXPLAINED. ON THE FACTS OF THE CASE, THE PEAK CREDITS CANNOT BE WORKED OUT. THEREFO RE, THE ENTIRE DEPOSITS OF RS.58,75,690/ - ARE TREATED AS UNEXPLAINED INVESTMENT IN BANK ACCOUNT IN VIEW OF THE PROVISIONS OF SEC.69 OF THE ACT. THE INCOME OF THE ASSESSEE HAS BEEN ENHANCED BY RS. 58,75,690/ - BY THE PRINCIPAL COMMISSIONER OF INCOME TAX HOL DING THAT THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SEC. 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2010 - 11 ON 20/12/2012 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5. BEING AGGRIEVED BY THE SAID ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 6 . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER AFTER DUE VERIFICATION OF CASH DEPOSITS AND APPLICATION OF MIND HAD PASSED THE ASSESSMENT ORDER . HE RELI ED ON THE DECISION S OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MAX INDIA LTD. REPORTED IN 295 ITR 282 AND IN THE CASE OF MALABAR INDUSTRIAL COMPANY LTD. VS. CIT REPORTED IN 243 ITR 83 WHEREIN IT WAS HELD THAT IF TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE . 4 ITA NO. 165 /PNJ/201 5 7 . ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX. 8 . AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT E VEN BEFORE US, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO THE FACT THAT THE ASSESSEE WAS CARRYING ON RETAIL BUSINESS IN STEEL. WHEN ASKED BY THE BENCH, HE EXPRESSED HIS INABILITY TO DO SO. IN ABSENCE OF THE SAME, IN OUR CONSIDERED VIEW AS THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT COULD NOT BE ESTABLISHED BY THE ASSESSEE TO BE OUT OF CARRYING ON RETAIL BUSINESS IN STEEL BY BRINGI NG ANY MATERIAL ON RECORD, THE PRINCIPAL COMMISSIONER OF INCOME TAX WAS FULLY JUSTIFIED IN TREATING THE ENTIRE DEPOSITS MADE IN CASH OF RS.58,75,690/ - AS UNEXPLAINED DEPOSITS OF THE ASSESSEE UNDER SEC. 69 OF THE ACT. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS ALSO NOT DISPUTED THE ADDITION MADE BY THE PRINCIPAL COMMISSIONER OF INCOME TAX OF RS. 58,75,690/ - AS AMOUNT DEPOSITED IN CASH IN THE BANK ACCOUNT , A LTHOUGH, THE FIGURE STATED BY THE ASSESSING OFFICER IS RS . 53,13,450/ - . FURTHER, IT IS NOT THE CASE OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT WHILE MAKING THE DEPOSITS IN THE BANK, THE ASSESSEE HA D UTILIZED THE WITHDRAWALS MADE ON EARLIER OCCASIONS. THEREFORE, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX , WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 9. I N THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON WEDNESDAY , THE 0 5 TH DAY OF AUGUST , 201 5 AT GOA . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 05 TH AUGUST , 201 5 . VR/ - 5 ITA NO. 165 /PNJ/201 5 COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 6 ITA NO. 165 /PNJ/201 5 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 05 .0 8 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 06 .08 .2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 06 /08 /2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 06 /0 8 /2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 06 /08 /2015 SR.PS 6. DATE OF PRONOUNCEMENT 05 /0 8 /2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 06 /08 /2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER