ITO, Ward-1(3)(2), Vadodara V. Shri Kamal Kumar Agarwal, Vadodara

ITA 1987/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8116 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 06-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Keywords: Peak credit
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) ITA. NO: 1987/AHD/2015 (ASSESSMENT YEAR: 2010-11) INCOME-TAX OFFICER WARD- 1(3)(2), VADODARA V/S SHRI KAMAL KUMAR AGARWAL 14, SANKET SOCIETY, NEW SAMA ROAD, VADODARA (APPELLANT) (RESPONDENT) PAN: AADPA3632P APPELLANT BY : SHRI RAJESH MEENA, SR. D. R. RESPONDENT BY : SHRI HARDIK VORA, A.R. ( )/ ORDER DATE OF HEARING : 04 -06-201 8 DATE OF PRONOUNCEMENT : 13 -06-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-5, VADODARA DATED 13.03.2015 PERTAINING TO A.Y. 2010-1 1 AND FOLLOWING GROUND HAS TAKEN: ITA NO. 1987 /AHD/2015 . A.Y. 2010-11 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN RESTRICTING THE ADDITION OF RS.46,46,755/- TO RS.4,03,788/,- MADE U/S 68 OF THE IT ACT WITHOUT APPRECIATING THE CORROBORATIV E FINDINGS BROUGHT OUT BY AO WHICH CLEARLY ATTRACTS PROVISIONS OF SECTION 68 OF THE IT ACT. 2. FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, AS PER AIR INFORMATION, THE ASSESSING OFFICER NOTED THAT T HE ASSESSES HAS MADE CASH DEPOSITS AMOUNTING TO RS.40,87,475/- ON VARIOUS DAT ES DURING THE F.Y. 2009-10 IN A SAVING BANK ACCOUNT NO. 312602010012603 IN THE NAME OF THE ASSESSEE WITH UNION BANK OF INDIA, SAYAJIGUNJ BRANCH, BARODA . FURTHER, ON VERIFICATION OF BANK STATEMENT, IT IS SEEN THAT THE TOTAL CASH/C REDIT TRANSACTION DURING THE F.Y. 2009-10 ARE AMOUNTING TO RS.46,46,755/- OUT OF WHICH CASH DEPOSITS ARE OF RS.40,84,475/-. THE REMAINING AMOUNT OF RS.5,59, 280/- IS CREDITED BY THE WAY OF CHEQUES/TRANSFERS. THE ASSESSEE HAS NOT DISC LOSED THIS BANK ACCOUNT IN HIS BOOKS OF ACCOUNT AND RETURN OF INCOME FOR A.Y. 2010-11. FURTHER, ON BEING ASKED TO SUBMIT THE COPY OF ALL BANKS ACCOUNT ALONG WITH BANK STATEMENT FOR THE F.Y. 2009-10, THE ASSESSES HAS NOT SUBMITTED TH IS BANK ACCOUNT DETAILS AT THE TIME OF ASSESSMENT PROCEEDINGS. THEREAFTER, INF ORMATION WAS CALLED FOR U/S. 133(6) OF THE ACT FROM THE BANK. IN RESPONSE, THE B ANK HAS PROVIDED THE STATEMENT OF THE ABOVE BANK ACCOUNT FOR THE PERIOD 01.04.2009 TO 31.03.2010. AS THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS OF EXPLAINING THE SOURCE AND GENUINENESS OF THE CASH/CREDIT DEPOSITS AMOUNTING T O RS. 46,46,755/- IN THE SAVING BANK ACCOUNT NO. 312602010012603 IN THE NAME OF THE ASSESSEE WITH UNION BANK OF INDIA, SAYAJIGUNJ BRANCH, BARODA. THE ASSESSING OFFICER TREATED THE SAME AS UNEXPLAINED AND UNDISCLOSED CASH/CREDIT DEPOSITS AS INCOME OF THE ASSESSEE AND ADD RS.46,46,755/- TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO. 1987 /AHD/2015 . A.Y. 2010-11 3 3. AGAINST THE ABOVE SAID ADDITION, ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO RESTRICTING THE ADDITION OF RS. 46,46,755/- TO RS. 4,03,788/- 4. NOW DEPARTMENT IS BEFORE US. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD IN THE IMP UGNED ORDER. IN THIS CASE, ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G AND TRADING OF RE- PROCESSED PLASTIC GRANULES, PLASTIC BAGS AND OTHER PLASTIC PACKING PRODUCTS. IT IS NOTICED THAT TOTAL CASH/CREDIT TRANSACTION DURING T HE FINANCIAL YEAR 2009-10 ARE AMOUNTING TO RS. 46,46,755/- OUT OF WHICH CASH DEPO SITS ARE OF RS. 40,84,475/- AND REMAINING AMOUNT OF RS. 5,59,280/- IS CREDITED BY WAY OF CHEQUES/TRANSFERS AND ASSESSEE HAS NOT DISCLOSED TH IS BANK ACCOUNT IN HIS BOOKS OF ACCOUNT. 6. IN SUPPORT OF ITS CONTENTION FILED DETAILED PAPER B OOK CONTAINING P & L ACCOUNT SALES REGISTER WITH INVOICE AND PURCHASE RE GISTER INVOICE. AND LD. A.R. CITED AN ORDER OF GUJARAT HIGH COURT IN THE MATTER OF PR. CIT VS. INDRAJEET ZANDUSING TOMAR IN TAX APPEAL NO. 908 OF 2015 WHERE IN QUESTION BEFORE THE HONBLE HIGH COURT: (A) 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ITAT WAS JUSTIFIED IN ACCEPTING THE AMOUNT OF RS.22,58,223/- WHICH WAS PEAK CREDIT IN TWO UNDISCLOSED BANK ACCOUNTS, AS THE UNDISCLOSED INCOM E IGNORING THE FACTS THAT THE UNDISCLOSED BANK ACCOUNT HAD TOTAL CREDIT ENTRIES O F RS.2,46,75,333/- AND THE SOURCE OF THE SAME WAS NEVER SUBSTANTIATED / PROVED BY THE ASSESSEE EITHER AT THE ASSESSMENT PROCEEDINGS OR APPELLATE PROCEEDINGS?' 7. AND HONBLE HIGH COURT GIVEN RELIEF SIMILAR CIRCUMS TANCES BY HOLDING AS UNDER: ITA NO. 1987 /AHD/2015 . A.Y. 2010-11 4 '7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE AO AND THE CIT(A) ON THIS ISSUE. WE FIND THAT THE CIT(A) HAS P ASSED A DETAILED ORDER ON THIS ISSUE. THE ADMITTED FACT IS THAT THE TWO BANK ACCOU NTS OF THE ASSESSEE WITH AXIS BANK AND ICICI BANK LTD. WERE NOT DISCLOSED TO THE DEPARTMENT. HOWEVER, THE LEGAL POSITION ON THIS ISSUE IS WELL SETTLED THAT ONLY TH E PEAK AMOUNT IN SUCH TYPE OF CASE COULD BE ADDED AS INCOME IN THE HANDS OF THE ASSESS EE AND NOT AGGREGATE OF THE TOTAL CREDIT SIDE OF THE ACCOUNT. IN THIS CASE, THE CIT(A ) HAS RECORDED THAT THE PEAK AMOUNT OF TWO BANK ACCOUNTS WITH AXIS BANK AND ICICI BANK LTD. TAKEN TOGETHER COMES TO RS.22,58,223/-, AND THE SAME HAS BEEN HC-NIC PAG E 2 OF 3 CREATED ON THU DEC 24 01:49:46 IST 2015 O/TAXAP/908/2015 ORDER CON FIRMED AS INCOME IN THE HANDS OF THE ASSESSEE AND THE BALANCE ADDITION HAS BEEN DELETED. THE REVENUE COULD NOT CONTROVERT THIS FINDING OF THE CI T(A) THAT THE PEAK BALANCE IN THESE TWO UNDISCLOSED BANK ACCOUNTS OF THE ASSESSEE HAS BEEN RIGHTLY CALCULATED AT RS.22,58,223/-S. IN THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT NO INTERFERENCE IN THE ORDER OF THE CIT(A) IS CALLED FOR, AND THE GROU ND NO.2 OF THE REVENUE IS DISMISSED'. 8. ABOVE CASE IS IDENTICAL TO PRESENT CASE WHERE ASSES SEE PURCHASED PLASTIC OF RS. 40,37,885/- FROM UNREGISTERED DEALER AND HAWKER WHO DO NOT HAVE ANY VAT AND PAN NO. THEREFORE NO BILLS WERE GIVEN TO THE PA RTIES BUT HE SUBMITTED NAMES OF THE PERSONS FROM WHOM PLASTIC WAS PURCHASE D AND IN SUPPORT OF ITS CONTENTION, ASSESSEE PRODUCED PURCHASE REGISTER BEF ORE THE LOWER AUTHORITIES AS WELL AS INVOICES. FURTHER, THE CASH COLLECTED FROM PARTIES TO WHOM GOODS HAVE BEEN SOLD AND SAME WAS DEPOSITED IN THE BANK AND WH ATEVER AMOUNT WAS TRANSACTED IN THE BANK WAS FOR THE PURPOSE OF BUSIN ESS. ASSESSEE HAS ALSO PREPARED PROFIT AND LOSS ACCOUNT WHERE PROFIT OF RS . 3,98,746/- IS SHOWN. IN OUR CONSIDERED OPINION, LD. CIT(A) HAS RIGHTLY REST RICTED THE ADDITION BY ITA NO. 1987 /AHD/2015 . A.Y. 2010-11 5 APPLYING NET PROFIT OF 10% ON TOTAL CASH DEPOSIT OF RS. 40,37,885/-. THUS, THIS CASE DOES NOT REQUIRE ANY INTERFERENCE AT OUR END. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13 - 06- 2018 SD/- SD/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 13/06/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD