MURLIDHAR CHOUDHARY, Jaipur V. ITO, Jaipur

ITA 195/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5419 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 13-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK
• Keywords: Peak credit
• Section: 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 195/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI MURLIDHAR CHOUDHARY PLOT NO. 3, SIKAR HOUSE OUTSIDE CHANDPOLE GATE, JAIPUR CUKE VS. THE ITO WARD-4 (4) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACRPC 5713 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL , C.A. JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13/01/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29 /02/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)-II, JAIPUR DATED 09-01-2014 FOR THE ASSESSM ENT YEAR 2008-09 WHEREIN FOLLOWING GROUNDS ARE RAISED. 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS. 10,38,529/- BY HOLDING THAT THE CASH DEPOSIT IN ASS ESSEE'S ICICI BANK ACCOUNT AS UNEXPLAINED MONEY U/S 69A. ITA NO. 195/JP/2014 SHRI MURLIDHAR CHOUDHARY VS. ITO, W ARD- 4(4), JAIPUR . 2 1.1 THE LD. CIT(A) HAS FURTHER ERRED ON FACTS AND I N LAW IN CONFIRMING THE SAID ADDITION BY SIMPLY RELYING ON T HE REMAND REPORT OF TH AO WITHOUT CONSIDERING THAT :- (I) THE ASSESSEE HAS ALREADY DECLARED INCOME FROM PLYING OF TRUCKS U/S 44AE OF THE I.T. ACT, 1961 WHI CH IS ACCEPTED BY THE AO AND THEREFORE, SEPARATE ADDIT ION MADE BY TREATING THE CASH DEPOSIT IN THE BANK ACCOU NT AS UNEXPLAINED UNJUSTIFIED. (II) THE ADDITION OF THE ENTIRE CASH DEPOSIT IN THE BANK ACCOUNT WITHOUT GIVING THE SET OFF OF WITHDRAW ALS FROM THE SAID BANK A/C IS UNJUSTIFIED. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS. 80,000/- U/S 68 BY TREATING THE LOAN RECEIVED FROM SHRI SUSHIL KUMAR SHARMA AS BOGUS IGNORING THAT THE ASSESSEE HA S PROVED THE IDENTITY, GENUINENESS AND CREDITWORTHINE SS OF THE CREDITOR BY SUBMITTING THE CONFIRMATION AND BANK AC COUNT. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE D ERIVES INCOME FROM PLYING OF THREE TRUCK TRAILERS OWNED BY HIM AND ALS O DERIVES INCOME FROM TRADING IN SHARES AND INTEREST INCOME. THE RETURN O F INCOME WAS FILED U/S 44AE OF THE ACT. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, THE AO FOUND THAT THERE WAS CASH DEPOSIT AT RS. 10,38,529/ - IN ICICI BANK ACCOUNT, JAIPUR. QUERIES WERE RAISED IN THIS BEHALF BY THE AO. ACCORDING TO THE AO, THE ASSESSEE DID NOT COMPLY WITH THAT L ETTER. CONSEQUENTLY, THE IMPUGNED ADDITION OF RS. 10,38,529/- WAS MADE U/S 6 9A OF THE ACT BY THE AO. ITA NO. 195/JP/2014 SHRI MURLIDHAR CHOUDHARY VS. ITO, W ARD- 4(4), JAIPUR . 3 2.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAD GIVEN FINDING THAT IN RE SPONSE TO AOS LETTER, THE ASSESSEE FILED REPLY IN THE FORM OF EXPLANATION DATED 22-07-2010 AND VIDE REPLY DATED 02-08-2010, THE ASSESSEE FILED A L IST OF TRANSPORT COMPANIES ALONG WITH THEIR ADDRESSES AND TELEPHONE NUMBERS WHO DEPOSITED THE CASH DIRECTLY IN ICICI BANK ACCOUNT. THE LD. CIT(A) ASKED FOR THE REMAND REPORT FROM THE AO WHICH WAS DATED 1 6-09-2013 IN WHICH VARIOUS OBJECTIONS ARE MENTIONED BY THE AO AND THER EAFTER FOLLOWING COMMENTS WERE MADE. SINCE YOU HAVE NOT PROVED ANY VERSION WITH DOCUMENTARY EVIDENCES THAT FREIGHT HAS DIRECTLY BEE N DEPOSITED BY THE THIRD PARTIES FOR WHOM YOU HAVE DO NE JOB WORK. YOU HAVE ALSO FURNISHED A LIST OF VARIOUS TRA NSPORTERS AND CLAIMED THAT THOSE TRANSPORTED HAVE DEPOSITED A MOUNT OF FREIGHT DIRECTLY IN YOUR BANK ACCOUNT. NOW YOU ARE REQUIRED TO PROVE WITH DOCUMENTARY EVIDENCES THAT YOU HAVE I N FACT DONE JOB/WORK FOR SUCH PARTIES AND THEY HAVE DEPOSI TED CASH DIRECTLY IN YOUR BANK ACCOUNT. YOU ARE ALSO REQUIRE D TO PRODUCE ALL SUCH PARTIES AS YOU HAVE NOT PROVIDED T HE COMPLETE ADDRESSES OF SUCH PARTIES. PLEASE NOTE IN CASE OF FAILURE IN PROVING THE SOURCE OF SUCH CASH DEPOSIT IN ICICI BANK AMOUNTING TO RS. 10,38,529/-, THE SAME WILL BE TREATED AS UNEXPLAINED MONEY AND WILL BE ADDED TO YOUR TOTA L INCOME UU69A OF THE I.T. ACT, 1961. IT IS REVEALED FROM BALANCE SHEET THAT SHRI SUSHIL KUMAR SHARMA HAS SHOWN AS UNSECURED LOAN AMOUNTING TO RS. 80,000/- WHICH HAS BEEN INTRODUCED DURING THE P ERIOD UNDER CONSIDERATION. YOU HAVE FURNISHED ONLY CONFIR MATION TO HIS EFFECT. YOU ARE REQUIRED TO FURNISH COPY OF ITR AND ITA NO. 195/JP/2014 SHRI MURLIDHAR CHOUDHARY VS. ITO, W ARD- 4(4), JAIPUR . 4 COPY OF BANK STATEMENT FOR RELEVANT PERIOD OF SHRI SUSHIL KUMAR SHARMA SO AS TO VERIFY IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE LOAN. PLEASE NOTE IN CASE O F FAILURE IN FURNISHING THE REQUIRED DETAILS, THE UNSECURED LOAN SHOWN IN THE NAME OF SHRI SUSHIL KUMAR SHARMA WILL BE TREATE D AS BOGUS AND THE SAME WILL BE ADDED TO YOUR TOTAL INCO ME U/S 68 OF THE I.T. ACT, 1961. IN FURTHER HEARING, THE ASSESSEE CONTENDED THAT THE AO HAS NOT CONDUCTED ANY QUERIES FROM THE LISTED TRANSPORT OPERATORS. IN THE ALTERNATE, THE ASSESSEE PROVIDED THE PEAK CASH DEPOSITED RESULTING INTO PEAK ADDITION OF RS. 15,912/-. SINCE ASSESSEE'S CASE IS COVERED U/S 44AE OF THE ACT, THEREFORE, NO SEPARATE ADDITION CAN BE MADE. 2.3 THE LD. CIT(A) OBSERVED AS UNDER:- (I) THE ASSESSEE'S CASE IS COVERED U/S 44AE OF THE ACT AS THE ASSESSEE FAILED TO DEMONSTRATE THE TRANSPORT ACTIVI TIES BASED ON THE NECESSARY DOCUMENTS. (II) THE ASSESSEE DESPITE BEING OWNER OF TRUCK TRAI LERS WAS INDULGING IN COMMISSION INCOME. THEREFORE, THE ASSE SSEE WAS NOT PURELY A TRUCK OPERATOR AND ON COMMISSION, NO TDS H AS BEEN DEDUCTED. IN VIEW OF THE DISCREPANCIES NOTED AT PAG E 8 OF LD. CIT(A)S ORDER, THE LD. CIT(A) UPHELD THE ADDITION IN THIS BEHALF AS UNDER:- HENCE, CONSIDERING THE ENTIRE FACTS AND REMAND REPORT OF THE AO AND THE SUBMISSION OF THE A.R. , T HE A.R. COULD NOT CONTROVERT THE FINDING OF THE AO. THE DIS ALLOWANCE MADE BY THE AO IS CONSIDERED TO BE FAIR AND REASONA BLE AND DOES NOT CALL FOR ANY INTERFERENCE. HENCE, THE ADDI TION OF RS. ITA NO. 195/JP/2014 SHRI MURLIDHAR CHOUDHARY VS. ITO, W ARD- 4(4), JAIPUR . 5 10,38529/- IS SUSTAINED. THE APPELLANT FAILS ON THE SE GROUNDS. 2.4 APROPOS OTHER GROUND, THE ADDITION WAS CONFIRME D BY THE BY FOLLOWING OBSERVATION. DURING THE COURSE OF APPEAL HEARING THE A.R. FOR THE APPELLANT SUBMITTED THAT THE ASSESSEE HAS FURNISHED THE COPY OF CONFIRMATION OF ACCOUNT OF SHRI SUSHIL KUMAR SHA RMA DURING THE COURSE OF ASSESSMENT PROCEEDINGS. BEFORE YOUR GOODSELF, FURTHER EVIDENCE AS TO THE BANK ACCOUNT O F SHRI SUSHIL KUMAR SHARMA WAS FURNISHED. FROM THE SAME, I T CAN BE NOTED THAT BEFORE ISSUE OF CHEQUE OF RS. 80,000/ - BY HIM TO THE ASSESSEE, THERE IS A CREDIT OF RS. 89,444/- ON 7-02-2008 IN HIS BANK ACCOUNT AGAINST REFUND OF SHARE APPLICATIO N MONEY OF RELIANCE POWER LTD. THIS AMOUNT REMAINED IN HIS BANK ACCOUNT TILL GIVING LOAN TO THE ASSESSEE. THUS, THE CREDITOR WAS HAVING SUFFICIENT CREDIT BALANCE IN HIS ACCOUNT ON THE DATE OF GIVING SUCH LOAN TO THE ASSESSEE. THE LOAN WAS ALSO SUBSEQUENTLY REPAID BY ASSESSEE VIDE CHEQUE NO. 288 622 ON 4-02-2010. THUS, THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CREDITOR IS PROVED. IN VIEW OF ABOVE, ADDITION OF RS. 80,000/- MADE BY AO IS UNCALLD FOR AND BE DELETED. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION MADE. DURING THE COURSE OF APPELLATE PROCEEDINGS THE AO DID NOT ACCEPT THE SAME AND OBSE RVED THAT THE ASSESSEE DOES NOT PRODUCE ANY EVIDENCE DUR ING THE APPELLATE PROCEEDINGS. HENCE, CONSIDERING THE ENTIR E FACTS AND REMAND REPORT OF THE AO AND THE SUBMISSION OF T HE A.R., THE A.R. COULD NOT CONTROVERT THE FINDINGS OF THE A O. THE DISALLOWANCE MADE BY THE AO IS CONSIDERED TO BE FAI R AND REASONABLE AND DOES NOT CALL FOR ANY INTERFERENCE. HENCE, THE ADDITION OF RS. 80,000/- IS SUSTAINED. THE APPELLAN T FAILS ON THIS GROUND. ITA NO. 195/JP/2014 SHRI MURLIDHAR CHOUDHARY VS. ITO, W ARD- 4(4), JAIPUR . 6 2.5 AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL WHE REIN THE LD. AR OF THE ASSESSEE REITERATED THE FACTS AND CONTENTIONS A S RAISED BEFORE THE LOWER AUTHORITIES AND RELIED ON VARIOUS CASE LAWS AS MENT IONED IN THE WRITTEN SUBMISSION. 2.6 APROPOS GROUND NO. 2, I AM OF THE VIEW THAT ASS ESSEE HAS FURNISHED THE REASONABLE EXPLANATION ABOUT THE CRED ITWORTHINESS OF THE CREDITOR SHRI SUSHIL KUMAR, BEING SHARE APPLICATION MONEY REFUND FROM RELIANCE POWER LTD. IN MY CONSIDERED VIEW, THE ASS ESSEE'S EXPLANATION IS REASONABLE AND DESERVES TO BE ACCEPTED. THUS GROUND NO. 2 OF THE ASSESSEE IS ALLOWED. 2.7 APROPOS GROUND NO. 1, I FIND SUBSTANCE IN THE F INDINGS OF THE LD. CIT(A) THAT ASSESSEES CASE IS NOT COVERED U/S 44AE OF THE ACT. HOWEVER, IN RESPECT OF DEPOSITS IN ICICI BANK ACCOUNT, THE A SSESSEE'S CASH FLOW STATEMENT AND PEAK WORKING HAS NOT BEEN EXAMINED BY THE LD. CIT(A) INASMUCH AS HE CONFIRMED THE ENTIRE ADDITION AS UNE XPLAINED CASH CREDITS. IN THIS RESPECT THE DECISION OF HON'BLE JURISDICTIO NAL HIGH COURT IN THE CASE OF SIND MEDICAL STORES VS. CIT (201) 117 DTR 78 (RAJ) IS RELIED ON WHERE IN THE HON'BLE COURT HELD AS UNDER:- WHEN ANY AMOUNT IS PAID, LATER WITHDRAWN FROM TH E BOOKS, WOULD BE AVAILABLE FOR RECYCLING AND ROTATION, UNL ESS OTHERWISE ESTABLISHED AS INVESTED ELSEWHERE BY THE REVENUE. A SSESSEE WAS ITA NO. 195/JP/2014 SHRI MURLIDHAR CHOUDHARY VS. ITO, W ARD- 4(4), JAIPUR . 7 ENTITLED TO THE BENEFIT OF PEAK CREDIT WHICH OUGHT TO HAVE BEEN ALLOWED INSTEAD OF MAKING SEPARATE ADDITION OF ENTI RE CLAIM. IN MY CONSIDERED VIEW, THE ADDITION U/S 68 IS TO BE MADE ON THE BASIS OF PEAK, HOWEVER THE PEAK HAS NOT BEEN PROPERLY VERIFI ED. THEREFORE, THE ISSUE IS RESTORED BACK TO THE FILE OF THE AO TO ARR IVE AT PEAK DEPOSITS IN THE ICICI BANK ACCOUNT AFTER DUE VERIFICATION THEREOF. THUS GROUND NO. 1 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 29 / 02/20 16 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29 /02/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI MURLIDHAR CHOUDHARY, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD-4 (4), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 195/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NO. 195/JP/2014 SHRI MURLIDHAR CHOUDHARY VS. ITO, W ARD- 4(4), JAIPUR . 8