SHRI VINOD SINGH, Jaipur V. INCOME TAX OFFICER, WARD-5-1, Jaipur

ITA 177/JPR/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2140 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 13-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: YOGESH KUMAR SHARMA FCS
• Keywords: Unexplained investment; Peak credit
• Section: 271(1)(c); 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH JESK LH0 KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH. C. SHARMA, AM & SHRI VIJAY PA L RAO, JM VK;DJ VIHY LA- @ ITA NO. 177/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 SHRI VINOD SINGH, P.NO. 13-14, OM COLONY, DELHI BY PASS, JAI SINGH PURA, KHORE, JAIPUR- 302002. CUKE VS. THE ITO, WARD-5(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ANWPS 6841 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI YOGESH KUMAR SHARMA (FCS.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI A.K. MAHLA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 12/04/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 20/06/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 16.11.2018 OF THE LD. CIT(A), JAIPUR ARISING FROM P ENALTY ORDER PASSED U/S 271(1)(C) OF THE IT ACT FOR THE ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- ITA NO. 177/JP/2019 SHRI VINOD SINGH VS. ITO 2 ITA NO. 177/JP/2019 SHRI VINOD SINGH VS. ITO 3 8. THAT THE APPELLANT PRAYS THAT THE PENALTY OF RS. 6,50,000 MADE IN RESPECT OF SECTION 271(1)(C) BE DELETED. ITA NO. 177/JP/2019 SHRI VINOD SINGH VS. ITO 4 9. THAT THE APPELLANT PRAYS TO LEAVE TO ADD, ALTER, AND AMEND THE AFORESAID GROUNDS OF APPEAL AT OR BEFORE THE TIME O F HEARING OF APPEAL. 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETU RN OF INCOME ON 16.08.2010 DECLARING TOTAL INCOME OF RS. 1,45,250/- . THE SCRUTINY ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 1 9.03.2013. DURING THE ASSESSMENT PROCEEDING THE AO NOTED THAT THE ASS ESSEE HAS DEPOSITED CASH OF RS. 25,85,000/- IN THE SAVING BANK ACCOUNT OF STANDARD CHARTERED BANK, M.I. ROAD, JAIPUR. THE AO MADE AN ADDITION OF PEAK BALANCE OF RS. 15,79,000/- AS UNEXPLAINED INVESTMENT IN THE BANK A CCOUNT AND INTEREST ON BANK DEPOSITS OF RS. 28,418/- WAS ALSO ADDED TO THE INCOME OF THE ASSESSEE. FURTHER, THE AO HAS ALSO MADE ADDITION ON ACCOUNT OF CAPITAL GAIN OF RS. 4,38,579/- AND UNEXPLAINED INVESTMENT I N SHARES AND MUTUAL FUNDS OF RS. 5,00,000/-. IN THE QUANTUM APPEAL, THE LD. CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE AO EXCEPT ON ACC OUNT OF INVESTMENT IN SHARES AND MUTUAL FUNDS WHICH WAS RESTRICTED TO RS. 3,30,000/- AS AGAINST RS. 5,00,000/- MADE BY THE AO. SUBSEQUENTLY, THE AO INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED THE PENALTY OF RS. 6,50,000/- IN RESPECT OF THE ADDITIONS SUSTAINED BY THE LD. CIT(A). THE ASSESSEE CHALLENGED THE ACTION OF THE AO IMPOSING T HE PENALTY U/S 271(1)(C) OF THE ACT BEFORE THE LD. CIT(A) BUT COUL D NOT SUCCEED. ITA NO. 177/JP/2019 SHRI VINOD SINGH VS. ITO 5 3. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMIT TED THAT THE ADDITION ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACC OUNT IS BASED ON ESTIMATION AS THE AO HAS TAKEN THE PEAK BALANCE OF BANK ACCOUNT THEREFORE, ON SUCH ADDITION NO PENALTY U/S 271(1)(C ) OF THE ACT CAN BE LEVIED. THE LD. AR HAS RELIED UPON THE VARIOUS DECI SIONS AND SUBMITTED THAT THE ASSESSEE HAS EXPLAINED THE SOURCE OF CASH DEPOS IT IN THE BANK AS WELL AS INVESTMENT IN SHARES AND MUTUAL FUNDS. FURTHER, EVEN THOUGH THE SAID EXPLANATION WAS NOT FOUND TO BE SATISFACTORY BUT TH E SAME IS REASONABLE BONAFIDE EXPLANATION AND CONSEQUENTIALLY NO PENALTY U/S 271(1)(C) OF THE ACT IS LEVIABLE. HE HAS REITERATED ITS CONTENTION R AISED BEFORE THE AUTHORITIES BELOW. 4. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THIS IS NOT A CASE OF ESTIMATION OF INCOME OF THE ASSESSEE BUT THE SPE CIFIC AMOUNT WAS FOUND DEPOSITED IN THE BANK AND THE ASSESSEE FAILED TO EX PLAIN THE SOURCE OF THE SAME. THE ASSESSEE HAS SHOWN VERY MEAGER INCOME IN THE RETURN OF INCOME AT RS. 1,45,245/- THEREFORE, THE BENEFIT OF WITHDRAWAL OF MONEY FROM THE BANK ACCOUNT BY THE AO WOULD NOT BE TREATE D AS ESTIMATION OF INCOME. HE HAS RELIED UPON THE ORDER OF THE AUTHORI TIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS NOT DISPUTED T HE FACT THAT THE TOTAL ITA NO. 177/JP/2019 SHRI VINOD SINGH VS. ITO 6 SUM OF RS. 25,85,000/- WAS FOUND DEPOSITED IN CASH IN THE BANK OF THE ASSESSEE. THE AO AFTER ALLOWING THE BENEFIT OF OPEN ING BALANCE AND WITHDRAWAL HAS MADE THE ADDITION OF RS. 15,79,000/- BEING PEAK BALANCE/CREDIT IN THE BANK ACCOUNT. THEREFORE, GIVI NG THE CREDIT OF WITHDRAWALS FROM THE BANK ACCOUNT TO ARRIVE THE COR RECT DEPOSIT MADE BY THE ASSESSEE WITHOUT HAVING ANY SOURCE WOULD NOT AM OUNT ESTIMATION OF INCOME BECAUSE THE UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT HAS BEEN TAKEN AT THE PEAK CREDIT INSTEAD OF THE TOTAL DEPOS IT. THE OTHER ADDITIONS ARE INTEREST IN THE BANK DEPOSIT IS OTHERWISE IS NO T IN DISPUTE AS THE ASSESSEE HAS NOT INCLUDED THE SAID AMOUNT IN THE RE TURN OF INCOME. EXCEPT PART RELIEF WAS GRANTED BY THE LD. CIT(A) REGARDING THE MISTAKE IN THE AMOUNT OF INVESTMENT IN MUTUAL FUNDS TAKEN BY THE A O ALL THE ADDITIONS WERE SUSTAINED BY THE LD. CIT(A) AS WELL AS THIS TR IBUNAL. THE LD. CIT(A) HAS CONSIDERED THIS ISSUE IN PARA 2.3 IS AS UNDER:- 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE PENA LTY ORDER AND THE SUBMISSIONS OF THE APPELLANT. IT IS SEEN THAT T HE PENALTY OF RS. 6,50,000/- WAS IMPOSED IN RESPECT OF THE FOLLOWING- (1) PEAK DEPOSIT IN BANK ACCOUNTS (2) INTEREST ON BANK DEPOSIT ITA NO. 177/JP/2019 SHRI VINOD SINGH VS. ITO 7 ITA NO. 177/JP/2019 SHRI VINOD SINGH VS. ITO 8 ITA NO. 177/JP/2019 SHRI VINOD SINGH VS. ITO 9 ITA NO. 177/JP/2019 SHRI VINOD SINGH VS. ITO 10 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN THE ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED DEPOSIT S, UNEXPLAINED INVESTMENT, INCOME FROM INTEREST ON DEPOSIT AND INC OME FROM SHARE TRADING NOT DISCLOSED IN THE RETURN OF INCOME CLEAR LY ATTRACTS THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. ACCORDI NGLY, WE DO NOT FIND ANY REASONS TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(A). ITA NO. 177/JP/2019 SHRI VINOD SINGH VS. ITO 11 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/06/2019. SD/- SD/- JESK LH0 KEKZ FOT; IKY JKO (RAMESH. C. SHARMA) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20/06/2019. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI VINOD SINGH, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD 5(1), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 177/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR