Shri Jagdish Sachdeva, Sehore V. The ITO Wd-2(3), Bhopal

ITA 2/IND/2014

• Counselvise Citation: 222714 RSA 2014
• Duration Of Justice: 1 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 02-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: SUDHIR PADLIA
• Keywords: Peak credit

Judgement Text

SHRI JAGDISH SACHDEVA ITA NO. 2/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, INDORE SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 2/IND/2014 A.Y. 2008-09 JAGDISH SACHDEVA SEHORE ::: APPELLANT VS INCOME TAX OFFICER 2(3) BHOPAL ::: RESPONDENT APPELLANT BY SHRI SUDHIR PADLIA RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 12.10.2015 DATE OF PRONOUNCEMENT 1 .1 2 .2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, BHOPAL DATED 17.10. 2013. SHRI JAGDISH SACHDEVA ITA NO. 2/IND/2014 2 2. THE ONLY ISSUE INVOLVED IN THE APPEAL OF THE ASSES SEE IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMI NG THE ADDITION OF RS.8,92,555/- BEING THE AMOUNT OF PEAK CRE DIT IN THE TWO SAVING BANK ACCOUNTS OF THE ASSESSEE WITHOUT ASCERTAINING THE FACTS OF THE CASE AND THE PROVISIONS OF THE IT ACT, 1961. THE ASSESSEE PROVIDED AN EXPLANATION IN SUPPORT OF SOURCE OF DEPOSITS IN BANK ACCOUNT. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF H OTEL IN THE NAME OF HOTEL ANAND AT SEHORE. THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING INCOME AT RS.2,05,50 0/- AND THE ASSESSMENT WAS COMPLETED AT INCOME OF RS.13,57,515/-. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE MAINTAINED TWO SAVINGS BANK ACCOUNTS I.E. WITH BANK OF INDIA AND ICICI BANK IN WHICH DEPOSITS WERE MADE IN CASH BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER REQUIRED THE ASSE SSEE TO RECONCILE AND EXPLAIN THE SOURCE OF DEPOSITS IN B OTH SHRI JAGDISH SACHDEVA ITA NO. 2/IND/2014 3 THESE BANK ACCOUNTS. IN RESPONSE TO THAT, THE ASSESSEE FURNISHED CASH FLOW STATEMENT BEFORE THE ASSESSING OF FICER. THE ASSESSING OFFICER DID NOT FIND EXPLANATION SATISFAC TORY AND OBSERVED THAT THE DEPOSITS MADE IN THESE BANK ACCOUNTS COULD NOT BE RECONCILED. THE ASSESSING OFFI CER, THEREFORE, TOOK THE PEAK OF BALANCES IN BANK OF INDIA AND ICICI AT RS.6,08,023/- AND RS.2,87,532/- RESPECTIVELY , AGGREGATING TO RS.8,92,555/- AND ADDED TO THE RETURNED INCOME OF THE ASSESSEE TREATING THE SAME AS DEPOSITS FROM UNDISCLOSED SOURCES. 3. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE ACTION O F THE ASSESSING OFFICER WITH THE FOLLOWING FINDINGS : - 4.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FACT OF THE CASE. THE MAIN SUBMISSION OF THE APPELLANT IS THAT THE LD. A.O. HAD NOT PROPERLY CONSIDERED THE CASH FLOW STATEMENT FURNISHED BY THE APPELLANT DURING SHRI JAGDISH SACHDEVA ITA NO. 2/IND/2014 4 THE ASSESSMENT PROCEEDINGS WHEREIN THE SOURCES OF DEPOSITS IN CASH IN BANK ACCOUNTS HAVE BEEN DULY EXPLAINED. IT WOULD BE FRUITFUL TO REPRODUCE THE CASH FLOW STATEMENT FOR THE PERIOD 01.04.2007 TO 31.03.2008 SUBMITTED BY THE ASSESSEE BEFORE THE A.O. AS UNDER :- INFLOW AMOUNT (RS.) OUTFLOW AMOUNT (RS.) OPENING BALANCE 1622056 BOI S/B A/C DEPOSIT 1260000 SALE OF PLOTS 906000 ICICI S/B A/C DEPOSIT 1395000 BOI/S/B A/C WITHDRAWAL 736284 HOUSE A/C 1629000 ICICI S/B A/C WITHDRAWAL 1168500 VEHICLE A/C 180000 NET PROFIT OF HOTEL ANAND 123660 DRAWINGS 72000 BALANCE 20500 TOTAL 4556500 TOTAL 4556500 SHRI JAGDISH SACHDEVA ITA NO. 2/IND/2014 5 FROM THE ABOVE IT MAY BE NOTED THAT THE MAIN SOURCE OF CASH EXPLAINED BY THE APPELLANT WAS FROM OPENING BALANCE OF CASH IN HAND OF RS.16,22,056/-. THE APPELLANT CONTENDED THAT THE OPENING CASH WAS OUT O F AMOUNT OF RS.17,80,000/- STATED TO BE RECEIVED AFTE R THE DEATH OF SHRI LADURAM, THE APPELLANTS FATHERS ELDER BROTHER, AS PER HIS WILL. THE APPELLANT ALSO FURNISHED THE COPY OF THE SAID WILL. ON PERUSAL O F THE COPY OF WILL IT IS NOTICED THAT IT WAS PURPORTED TO BE WRITTEN ON 27.10.2004 AND PARA 3 OF THEWILL INTER ALIA STATES AS UNDER :- 3- ;G FD ESJS IKL PY LEIFRR ESA 17]80]000(L=KG Y K[K VLLH GTKJ) UDNH O ,D LKSUS DH PSU VKSJ NKS PQFM;K TKS ESUS XOKGKSA DS LE{K TXNH'K DQEKJ DKS NS FN, GSA ---** SHRI JAGDISH SACHDEVA ITA NO. 2/IND/2014 6 FROM THE ABOVE, IT MAY BE NOTED THAT AMOUNT OF RS.17,80,000/- IN CASH WAS STATED TO BE GIVEN TO TH E APPELLANT ON 27.10.2004. SHRI LADURAM EXPIRED ON 29.1.2005. THUS, EVEN THE SUBMISSION OF THE APPELLANT IS CONSIDERED THAT HE HAD RECEIVED RS.17,80,000/- IN CASH IN F.Y. 2004-05, IT IS NOT CONVINCING THAT HE WOULD KEEP SUCH A HUGE CASH AT HOME UPTO 01.04.2007 ESPECIALLY WHEN THE APPELLANT HAD BEEN MAINTAINING TWO REGUALR BANK ACCOUNTS AND WAS ALSO ENGAGED IN THE BUSINESS OF HOTEL. THUS, TH E SUBMISSION OF THE APPELLANT DOES NOT INSPITE CONFIDENCE. IT IS ALSO PERTINENT TO NOTE THAT DURIN G THE YEAR ALSO THE APPELLANT HAD DEPOSITED CASH ON DIFFERENT DATES IN THE BANK ACCOUNTS AS AND WHEN HE REQUIRED TO MAKE SOME PAYMENTS. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE SHRI JAGDISH SACHDEVA ITA NO. 2/IND/2014 7 AND THE PRINCIPLE OF HUMAN PROBABILITY, THE EXPLANATION OF THE APPELLANT THAT HE WAS HAVING CAS H IN HAND AS ON 01.04.2007 OF RS.16,22,056/- IS NOT FOUND CONVINCING AND TENABLE. THUS, THE APPELLANT FAILED TO SATISFACTORILY EXPLAIN THE SOURCE OF DEPO SITS IN CASH IN HIS BANK ACCOUNTS AND THE A.O. HAD RIGHT LY MADE ADDITION OF RS.8,92,555/- OF THE PEAK AMOUNTS IN BANK OF INDIA AND ICICI BANK. ACCORDINGLY, THE ADDITION OF RS.8,92,555/- IS CONFIRMED. 4. I HAVE HEARD BOTH THE SIDES. THE ASSESSEE COULD NOT ESTABLISH THE GENUINENESS OF OPENING BALANCE IN THE CAS H FLOW STATEMENT. THE EXPLANATION PROVIDED REGARDING CASH RECEIVED BY WILL FROM THE BROTHER OF FATHER IN EARL IER YEARS IS ALSO NOT SATISFACTORY, LOOKING TO THE FACTS OF THE C ASE AND HUMAN PROBABILITIES. THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF CASH DEPOSITED IN THE ACCOUNTS. THE SHRI JAGDISH SACHDEVA ITA NO. 2/IND/2014 8 AUTHORITIES BELOW HAVE ALREADY GIVEN RELIEF BY ADOPTING PEAK CREDIT FOR ADDITION. THE LEARNED COUNSEL FOR THE ASSESSEE COULD NOT CONTRADICT THE FINDINGS OF THE LEA RNED CIT(A) WITH ANY POSITIVE EVIDENCE. I, THEREFORE, CON FIRM THE ORDER OF THE LEARNED CIT(A). ACCORDINGLY, THE APPEAL O F THE ASSESSEE STANDS DISMISSED. PRONOUNCED IN OPEN COURT ON IST DECEMBER, 2015 SD/- (B.C. MEENA) ACCOUNTANT MEMBER IST DECEMBER, 2015 DN/-