Kalpesh Amrutlal Thumar, GONDAL V. The Income Tax Officer, Ward-1(2), RAJKOT-GUJARAT

ITA 200/RJT/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1271 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 06-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: DM RINDANI
• Keywords: Peak credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E - COURT AT AHMEDABAD] BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 200 / RJT /20 1 3 / ASSESSMENT YEAR: 200 6 - 07 KALPESH AMRUTLAL THUMAR, GIRIRAJ, NANDANVAN SOCIETY, GUNDALA ROAD, GONDAL, DIST: RAJKOT PAN : ADHPT 2003 N VS INCOME TAX OFFICER, WARD 1(2), RAJKOT / (APPELLANT) / (RESPONDENT) ASSESSEE(S) BY : SHRI D.M. RINDANI, CA REVENUE BY : SHRI YOGESH PANDEY, CIT - DR / DATE OF HEARING : 18 / 0 5 /201 6 / DATE OF PRONOUNCEMENT: 19 / 0 5 /201 6 / O R D E R PER KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME TAX (APPEALS), GANDHINAGAR, AHMEDABAD DATED 21 . 08 .20 1 2, PERTAINING TO ASSESSMENT YEAR 200 6 - 0 7 . 2. THE SOLITARY GROUND RAISED BY THE ASSESSEE READS AS UNDER: - LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY ON PEAK CREDIT IN THE BANK ACCOUNT. THE PENALTY MAY PLEASE BE CANCELLED TO MEET THE ENDS OF JUSTICE. 3. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND ASSESSMENT U/S 143(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') WAS FRAMED VIDE ORDER DATED 19 .12.20 08 . WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER MADE ADDITION OF RS.13,81,500/ - ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE AND ALSO INITIATED THE PENALTY PROCEEDINGS. ITA NO. 200/RJT/ 2013 KALPESH AMRUTLAL THUMAR VS. ITO FOR AY 2006 - 07 2 SUBSEQUENTLY, THE ASSESSING OFFICER IMPOSED PENALTY OF RS.4,46,316/ - U/S 271(1)(C) OF THE AC T , BEING THE 100% OF THE TAX SOUGHT TO BE EVADED ON INCOME OF RS.13,81,500/ - . AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DISMISSED THE APPEAL OF THE ASSESSEE. NOW, THE ASSESSEE IS FURTHER IN APPEAL BEFORE US AGAINST THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE PENALTY. 4. THE ONLY GRIEVANCE OF THE ASSESSEE IN HIS APPEAL IS WITH REGARD TO THE CONFIRMATION OF THE PENALTY. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY. HE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS F AILED TO APPRECIATE THE FACT THAT THE CONFIRMATION OF ADDITION BY THE LD. CIT(A) WAS BASED ON THE PEAK THEORY. HE ALSO SUBMITTED THAT THE EXPLANATION AS GIVEN BY THE ASSESSEE WAS NOT ACCEPTED BY THE AUTHORITIES BELOW. HE CONTENDED THAT MERELY THE EXPLANA TION WAS NOT ACCEPTED BY THE ASSESSING OFFICER CANNOT BE A GROUND FOR CONFIRMATION OF ADDITION AND LEVYING THE PENALTY ON THE SAME. 5. ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THERE IS NO ILLEGALITY IN THE ORDERS OF THE AUTHORITIES BELOW AND HE STRONGLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) HAS DECIDED THE ISSUE IN PARAGRAPH 3.2 OF T HE ORDER, WHICH READS AS UNDER: - 3.2 I HAVE PERUSED THE PENALTY ORDER AND THE SUBMISSION OF THE AR / APPELLANT. I HAVE ALSO GONE THROUGH THE ORDER OF THE LD. CIT(A), VIDE ORDER IN APPEAL NO.CIT(A)/GNR/RJT/0231/2008 - 09 DATED 21.08.2012 FOR AY 2006 - 07. THE LD. CIT(A) FOUND THAT THE CASH TRANSACTIONS IN THE BANK ACCOUNT WERE IN THE FORM OF DEPOSITS AND WITHDRAWALS AND THE APPELLANT ITA NO. 200/RJT/ 2013 KALPESH AMRUTLAL THUMAR VS. ITO FOR AY 2006 - 07 3 TRIED TO CLAIM THE SOURCE AS FROM AGRICULTURE INCOME AND SAVINGS WITHOUT ANY EVIDENCE AS NO LAND BELONGED TO THE APPELLANT NOR WAS ANY AGRICULTURAL INCOME SHOWN IN THE RETURN AND ACCORDINGLY THE LD. CIT(A) REJECTED THE EXPLANATION OF THE APPELLANT. THE VARIOUS CITATIONS RELIED UPON BY THE APPELLANT ARE NOT APPLICABLE TO THE APPELLANTS CASE AS THE ADDITION IS BASED ON THE ACTUAL CASH DEPOSITS IN THE BANK ACCOUNT SOURCE OF WHICH HAS NOT BEEN EXPLAINED. IT IS NOT AN ESTIMATE NOR ANY GUESSWORK. ALSO THE DEPOSITS ARE IN THE APPELLANTS OWN ACCOUNT. THAT THE APPELLANT HAS NOT EXPLAINED THE SOURCE OF THE DEPOSITS CLEARLY POINTS TO CONTUMACIOUS CONDUCT ON HIS PART. THI S IS A DELIBERATE ACT OF CONCEALMENT ON PART OF THE APPELLANT. THE LD. CIT(A) HAS CONFIRMED THE ADDITION U/S 69A. THE A.O. HAD TAKEN RECOURSE TO S.68. THAT BEING INCORRECT, THE LD. CIT(A) HAD APPLIED THE CORRECT RELEVANT SECTION. THE MERE INCORRECT AP PLICATION OF A SECTION DOES NOT AND SHOULD NOT TAKE THE CONCEALED INCOME OUT OF THE PURVIEW OF PENALTY. PENALTY IS TO BE LEVIED AS A DETERRENT AGAINST CONSCIOUS ACTS OF CONCEALMENT BY THE APPELLANT WHICH HAS BEEN RIGHTLY DETECTED BY THE AO IN THE FIRST PL ACE. THUS, IT IS OBVIOUS THAT THE ADDITION HAS ARISEN DUE TO DELIBERATE CONCEALMENT ON THE PART OF THE APPELLANT. THE AOS ACTION OF LEVYING PENALTY IS THEREBY FULLY JUSTIFIED. THE AO IS DIRECTED TO COMPUTE THE PENALTY @ 100% OF THE TAX SOUGHT TO BE EVA DED ON INCOME OF RS.7,17,00/ - WHICH HAS BEEN SUSTAINED BY THE LD. CIT(A) AS AGAINST RS.13,81,500/ - ADDED BY THE AO . 7. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE IMPUGNED ADDITION WAS MADE ON THE BASIS OF CASH DEPOSITS IN THE BANK ACCOUNT OF TH E ASSESSEE TO THE TUNE OF RS.13,81,500/ - ON VARIOUS DATES FROM 01.04.2005 TO 31.03.2006. THE LD. COUNSEL FOR THE ASSESSEE HAS CONCEDED THE FACT THAT THE BANK ACCOUNT OF THE ASSESSEE WAS NOT DISCLOSED TO THE ASSESSING OFFICER. IN OUR VIEW, THE NON - DISCLOSURE OF THE BANK ACCOUNT AMOUNTS TO CONCEALMENT OF DEPOSITS MADE IN SUCH BANK ACCOUNT AND CONSEQUENTLY, CONCEALMENT OF INCOME BY THE ASS ESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS VEHEMENTLY ARGUED THAT IN QUANTUM PROCEEDINGS THE LD. CIT(A) HAS MADE CONFIRMATION ONLY ON THE BASIS OF PEAK CREDIT TO BUTTRESS THE ARGUMENT THAT THERE IS NO SPECIFIC CONCEALMENT. WE DO NOT AGREE WITH THIS ARGU MENT OF THE LD. COUNSEL AS ADMITTEDLY THE DEPOSITS IN ITA NO. 200/RJT/ 2013 KALPESH AMRUTLAL THUMAR VS. ITO FOR AY 2006 - 07 4 THE BANK ACCOUNT WERE NOT DISCLOSED . T HE PEAK THEORY WAS APPLIED ONLY TO ASCERTAIN WHETHER THERE WAS ANY WITHDRAWAL AND OUT OF SUCH WITHDRAWAL, ANY DEPOSITS WERE MADE; SO, WITHDRAWAL AND DEPOSITS WERE ESSENTIALLY NOT REPORTED TO THE ASSESSING OFFICER. UNDER THESE FACTS AND CIRCUMSTANCES, WE SEE NO MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE PENALTY CANNOT BE LEVIED ON THE CASH DEPOSITS WHICH WERE NOT DISCLOSED OR OFFERED FOR TA X IN THE REGULAR RETURN OF INCOME. HOWEVER, THE PENALTY IS TO BE RESTRICTED ON THE AMOUNT CONFIRMED BY THE LD. CIT(A) IN QUANTUM PROCEEDINGS. WE FIND THAT LD. CIT(A) HAS ALREADY GIVEN THE DIRECTION TO THE ASSESSING OFFICER TO COMPUTE THE PENALTY @ 100% O F THE TAX SOUGHT TO BE EVADED ON INCOME OF RS.7,17,000 / - WHICH HAS BEEN SUSTAINED BY THE LD. CIT(A). WE ORDER ACCORDINGLY AND THE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS DEVOID OF ANY MERIT, HENCE REJECTED. 8 . I N THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 1 9 T H MAY , 2016 AT AHMEDABAD. SD/ - SD/ - ( MANISH BORAD ) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER AHMEDABAD; DATED 1 9 / 05 /201 6 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A ) 5. , , DR, ITAT, RAJKOT 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, RAJKOT