The ITO, Ward-5(3), Surat V. Smt. Meghnaben D.Patel, Surat

ITA 174/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89698 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 20-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Keywords: Unexplained cash credit; Business income; Peak credit; Additional evidence

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ././ ./ ITA NO. 174/AHD/2012 / ASSESSMENT YEAR: 2008-09 ITO, WARD-5(3) SURAT VS. SMT MEGHNABEN D PATEL 905, SITA APARTMENT, NANPURA, MAIN ROAD, NANPURA, SURAT PAN : AGVPP 4804 E / // / (APPELLANT) ! ! ! ! / // / (RESPONDENT) REVENUE BY : SHRI RAHUL KUMAR, SR. DR. ASSESSEE(S) BY : NONE '# $ %&'/ // / DATE OF HEARING : 01/07/2015 () $ %&' / // / DATE OF PRONOUNCEMENT: 03/07/2015 *+ *+ *+ *+/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS IS AN APPEAL FILED BY THE REVENUE AND IS DIREC TED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-IV, SURAT DATED 29.09.2011, PERTAINING TO ASSESSMENT YEAR 2008-09. 2. NOTICE OF HEARING WAS SENT BY REGISTERED POST WI TH ACKNOWLEDGEMENT DUE TO THE ASSESSEE ON 22.05.2015 F IXING THE DATE OF HEARING ON 01.07.2015, WHICH WAS RETURNED BY THE PO STAL AUTHORITIES UNSERVED. THEREFORE, THE NOTICE OF HEARING WAS SER VED THROUGH AFFIXTURE BY THE RANGE INSPECTOR ON 08.06.2015. HOWEVER, WHEN T HE CASE WAS CALLED FOR HEARING, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE AND NEITHER ANY ADJOURNMENT APPLICATION WAS FILED. THEREFORE, WE P ROCEEDED TO HEAR THE APPEAL EX-PARTE QUA THE RESPONDENT-ASSESSEE AND TO DECIDE THE APPEAL AFTER ITA NO. 174/AHD/2012 ITO VS. MEGHNABEN D PATEL AY 2008-2009 2 TAKING INTO CONSIDERING THE SUBMISSIONS OF THE DEPA RTMENTAL REPRESENTATIVE AND THE MATERIAL AVAILABLE ON RECORD. 3. THE ONLY GROUND RAISED BY THE REVENUE READS AS U NDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A)-IV, SURAT HAS ERRED IN DELETING THE ADDITION OF RS.48,49,259/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT MADE BY THE ASSESSING OFFIC ER. 3. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND PERUSED THE MATERIAL PLACED BEFORE US. DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS A SAV ING BANK ACCOUNT WITH ICICI BANK, ON WHICH THERE WERE TOTAL DEPOSITS BY W AY OF CASH AS WELL AS CHEQUE AMOUNTING TO RS.59,86,762/- FOR THE PERIOD F ROM 01.04.2007 TO 31.03.2008. SINCE THE ASSESSEE DID NOT APPEAR BEFO RE THE ASSESSING OFFICER AND DID NOT EXPLAIN THE SOURCE OF ABOVE DEPOSITS IN THE ABOVE BANK ACCOUNT, THE ASSESSING OFFICER TREATED THE ENTIRE DEPOSIT OF RS.59,86,762/- AS UNDISCLOSED INCOME OF THE ASSESSEE. ON APPEAL, THE CIT(A) WAS OF THE OPINION THAT THE ADDITION CAN BE MADE ONLY FOR THE PEAK CREDIT AND FOR THE GROSS PROFIT ON THE BUSINESS TRANSACTIONS. THE REL EVANT FINDING OF THE CIT(A) READS AS UNDER:- 2.2. I HAVE GONE THROUGH THE FACTS OF THE CASE. DU RING THE COURSE OF APPEAL, IT HAS BEEN CONTENDED BY THE APPELLANT THAT THE DEPOSI TS IN THE ACCOUNTS WERE EXPLAINED BEING IN THE NATURE OF BANK LOANS, PERSON AL LOANS, BUSINESS RECEIPTS, INTERNAL TRANSFERS, ETC. SOME EVIDENCES IN RESPECT OF LOANS FROM BANKS WERE SUBMITTED IN SUPPORT OF THE CLAIM THAT DEPOSITS WER E ON ACCOUNT OF BANK LOANS. IT IS .SEEN FROM THE ASSESSMENT ORDER THAT A DEQUATE OPPORTUNITIES HAD BEEN GRANTED TO THE APPELLANT BUT NONE WERE AVAILED . EVEN IN HIS SUBMISSIONS DURING THE APPEAL, THE APPELLANT HAS NOT SHOWN ANY SPECIFIC REASON WHICH PREVENTED HER FROM ATTENDING BEFORE THE A.O. OR IN SUBMITTING THESE EVIDENCES BEFORE THE A.O. THE ADDITIONAL EVIDENCES THEREFORE CANNOT BE ADMITTED IN APPEAL. IT IS SEEN THAT THE BANK ACCOUN T IN QUESTION WAS NOT ITA NO. 174/AHD/2012 ITO VS. MEGHNABEN D PATEL AY 2008-2009 3 ACCOUNTED FOR IN THE RETURN OF INCOME FILED. THERE APPEARS TO BE NO DISPUTE ABOUT THIS. THE A.O. HAS MADE AN OBSERVATION THAT C ASH WAS DEPOSITED IN THE ACCOUNT AND WITHDRAWN BY ATM. THE APPELLANT STATES THAT WHEN ADDITIONAL AMOUNTS WERE WITHDRAWN THEY WERE RE-DEPOSITED IN TH E ACCOUNT. IT HAS ALSO BEEN SUBMITTED BY THE APPELLANT THAT THE ACCOUNT HA D BUSINESS RECEIPTS. UNDER SUCH CIRCUMSTANCES, THE UNEXPLAINED INCOME OF THE APPELLANT WOULD BE THE PEAK OF THE CREDIT PLUS INCOME THAT MAY REASONA BLY ARISE FROM THE TRANSACTIONS IN THE ACCOUNT AND NOT THE AGGREGATE O F ALL CREDITS IN THE ACCOUNTS AS TAKEN BY THE A.O. IT IS SEEN FROM THE B ANK ACCOUNTS THAT THE PEAK OF CREDIT OF RS.9,99,317/- APPEARS ON 11 TH SEPTEMBER, 2007. THE PROFIT UPTO THE DATE OF PEAK WOULD BE INCLUDED IN THE PEAK CRED IT BIN PROFITS ON TRANSACTIONS SUBSEQUENT TO THE DATE OF PEAK WILL HA VE TO BE CONSIDERED. SUBSEQUENT TO THE PEAK CREDIT DATE, THERE ARE CREDI TS OF RS.27,63,729/- IN THE BANK ACCOUNT. REASONABLE PROFIT ACCRUING TO THE APP ELLANT IS CONSIDERED TO BE 5% OF CREDITS. THEREFORE PROFIT FROM TRANSACTIONS A FTER PEAK DATE WOULD BE RS.1,38,186/-. THE UNEXPLAINED INCOME FROM THE ACCO UNT WOULD BE RS.11,37,503/-. THE A.O. IS DIRECTED TO TAKE RS. 11 ,37,503/- AS THE INCOME OF THE APPELLANT FROM THE UNEXPLAINED BANK ACCOUNT INS TEAD OF RS.59,86,762/-. THIS GROUND IS PARTLY ALLOWED. 4. AFTER CONSIDERING THE FACTS OF THE CASE AND ARGU MENTS OF LD. DEPARTMENTAL REPRESENTATIVE, WE DO NOT FIND ANY INF IRMITY IN THE ABOVE ORDER OF THE CIT(A). THERE IS NO DISPUTE THAT DURIN G THE YEAR UNDER CONSIDERATION THERE WAS FREQUENT DEPOSITS IN CASH I N THE BANK ACCOUNT AS WELL AS WITHDRAWAL FROM ATM. IT WAS CONTENDED BY TH E ASSESSEE BEFORE THE CIT(A) THAT THE CASH MONEY WITHDRAWN FROM THE BANK WAS RE-DEPOSITED IN THE ACCOUNT. IT WAS ALSO SUBMITTED THAT THE ASSESSE E WAS DOING SOME RETAIL BUSINESS AND THE DEPOSIT WAS OUT OF THE BUSINESS RE CEIPT. ON THESE FACTS, THE CIT(A) MADE THE ADDITION OF PEAK CREDIT WHICH WAS F OUND TO BE OF RS.9,99,317/- ON 11.09.2007. HE ALSO ESTIMATED THE NET PROFIT OF 5% ON THE DEPOSIT SUBSEQUENT TO THE DATE OF PECK CREDIT, BECA USE THE PROFIT UPTO THE PEAK CREDIT WOULD BE INCLUDED IN THE PEAK CREDIT IT SELF. AFTER CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE LD . DEPARTMENTAL ITA NO. 174/AHD/2012 ITO VS. MEGHNABEN D PATEL AY 2008-2009 4 REPRESENTATIVE, WE ENTIRELY AGREE WITH THE ABOVE FI NDINGS OF THE CIT(A). THEREFORE, WE UPHOLD HIS ORDER AND DISMISS THE APPE AL FILED BY THE REVENUE. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 3 RD JULY, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 03/07/2015 BIJU T., PS *+ $ %, -*,% *+ $ %, -*,% *+ $ %, -*,% *+ $ %, -*,%/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. % '. / CONCERNED CIT 4. '. ( ) / THE CIT(A) 5. ,12 % , , / D R, ITAT, AHMEDABAD 6. 24 5# / GUARD FILE . *+' *+' *+' *+' / BY ORDER, TRUE COPY 6 66 6/ // / 7 7 7 7 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD