Sh. Ritesh Jindal, Rohtak V. ITO, Narnaul

ITA 2032/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7550 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 02-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO. .. .2032/DEL/2013 2032/DEL/2013 2032/DEL/2013 2032/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009- -- -10 1010 10 SHRI RITESH JINDAL, SHRI RITESH JINDAL, SHRI RITESH JINDAL, SHRI RITESH JINDAL, C/O SHRI S.K. BANSAL, C/O SHRI S.K. BANSAL, C/O SHRI S.K. BANSAL, C/O SHRI S.K. BANSAL, CA, 101, KOCHA CA, 101, KOCHA CA, 101, KOCHA CA, 101, KOCHAR MARKET, R MARKET, R MARKET, R MARKET, FIRST FLOOR, JHAJJAR ROAD, FIRST FLOOR, JHAJJAR ROAD, FIRST FLOOR, JHAJJAR ROAD, FIRST FLOOR, JHAJJAR ROAD, ROHTAK, ROHTAK, ROHTAK, ROHTAK, HARYANA. HARYANA. HARYANA. HARYANA. PAN : AIMPJ2083L. PAN : AIMPJ2083L. PAN : AIMPJ2083L. PAN : AIMPJ2083L. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1, 1, 1, 1, NARNAUL. NARNAUL. NARNAUL. NARNAUL. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. BANSAL, CA. RESPONDENT BY : SHRI VIKRAM SAHAY, SR.DR. ORDER ORDER ORDER ORDER PER G.D. PER G.D. PER G.D. PER G.D. AGRAWAL, VP AGRAWAL, VP AGRAWAL, VP AGRAWAL, VP : :: : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A), ROHTAK DATED 1 ST FEBRUARY, 2013 FOR THE AY 2009-10. 2. GROUND NOS.1 & 2 OF THE ASSESSEES APPEAL READ A S UNDER:- 1. THAT THE LD.A.O. HAS ERRED IN LAW AS WELL AS ON FACTS IN APPLYING PROVISIONS OF SECTION 69/69A OF INCOME TAX ACT. THE LD.CIT(A) ALSO HAS ERRED IN LAW AS WELL A S ON FACTS IN NOT DECIDING THE ISSUE ON APPLICATION OF PROVISIONS OF SECTION 69/69A. 2. THAT THE LD.A.O. HAS ERRED IN LAW AS WELL AS ON FACTS IN MAKING ADDITION OF RS.2593400 ON ACCOUNT OF ALLE GED UNEXPLAINED CASH DEPOSIT IN BANK. THE LD.CIT(A) HA S FURTHER ERRED IN LAW AS WELL AS ON FACTS IN DISMISS ING GROUND NO.1 AGAINST ADDITION OF RS.2593400 ON ACCOU NT ITA-2032/DEL/2013 2 OF ALLEGED UNEXPLAINED CASH DEPOSITS IN SAVINGS BAN K ACCOUNT NO.61032028094 WITH SBBJ WITHOUT CONSIDERIN G THE BOOKS OF ACCOUNTS AND THE RELEVANT DOCUMENTS. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE ASSESSING OFFICER MADE THE ADDITIO N OF `25,93,400/- ON ACCOUNT OF UNEXPLAINED DEPOSIT WITH STATE BANK OF B IKANER. HE STATED THAT THE ASSESSEE WAS CARRYING ON THE BUSINESS OF C ONSIGNMENT AGENT AS PER WHICH, THE ASSESSEE WAS RECEIVING THE GOODS I.E. CLOTH AND AFTER THE SALE, THE AMOUNT WAS DEPOSITED IN THE BANK AND CHEQUE WAS ISSUED. THEREFORE, THE ADDITION, IF ANY, CAN BE MA DE ONLY FOR THE PROFIT FROM SUCH CONSIGNMENT BUSINESS. HE FURTHER SUBMITT ED THAT IN FACT THERE WAS NO NET PROFIT FROM SUCH BUSINESS BECAUSE ASSESSEE WAS GETTING COMMISSION OF AROUND 2% AND TOTAL TURNOVER WAS AROUND `25 LAKHS. THAT THE EXPENDITURE FOR CARRYING ON OF SUC H BUSINESS WAS MORE THAN `50,000/- AND THEREFORE, THERE WAS NO NET PROF IT FROM SUCH BUSINESS. ACCORDINGLY, NO INCOME FROM THE CONSIGNM ENT BUSINESS WAS SHOWN IN THE BOOKS OF ACCOUNT. HE, THEREFORE, SUBM ITTED THAT THE ADDITION OF `25,93,400/- SHOULD BE DELETED. HE ALT ERNATIVELY SUBMITTED THAT THE TOTAL PEAK CREDIT IN THE ASSESSEES BANK A CCOUNT WAS `2,73,772/-. THE ASSESSING OFFICER MADE THE ADDITI ON FOR TOTAL AMOUNT DEPOSITED WITH THE BANK IN THE WHOLE YEAR. THAT TH ERE WAS FREQUENT DEPOSIT AND WITHDRAWAL OF THE AMOUNT AND THEREFORE, THE ADDITION UNDER SECTION 69/69A MADE BY THE ASSESSING OFFICER CAN BE ONLY IN RESPECT OF PEAK CREDIT IN THE ASSESSEES BANK ACCOU NT AND CANNOT BE FOR THE TOTAL TRANSACTION BETWEEN THE ASSESSEE AND THE BANK DURING THE WHOLE YEAR. 4. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF AUTHORITIES BELOW. HE STATED THAT AS PER THE INFOR MATION RECEIVED BY THE REVENUE, IT WAS GATHERED THAT THE ASSESSEE HAS AN ACCOUNT WITH STATE BANK OF BIKANER WHICH IS NOT DISCLOSED FOR TH E PURPOSE OF INCOME ITA-2032/DEL/2013 3 TAX. THAT THE ASSESSEE HAS NOT DISCLOSED ANY BUSIN ESS OF CLOTH ON CONSIGNMENT BASIS. THAT WHEN THE ASSESSEE WAS ASKE D TO EXPLAIN THE BANK ACCOUNT, HE MADE OUT A STORY OF CLOTH BUSINESS ON CONSIGNMENT BASIS. HE, THEREFORE, SUBMITTED THAT THE ASSESSING OFFICER RIGHTLY REJECTED THE ASSESSEES STORY OF CONSIGNMENT BUSINE SS. HE FURTHER SUBMITTED THAT THE TOTAL DEPOSIT IN THE BANK IS UNE XPLAINED AND THEREFORE, THE ADDITION FOR THE ENTIRE DEPOSIT WAS RIGHTLY MADE BY THE ASSESSING OFFICER. THE SAME SHOULD BE SUSTAINED. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. SO FAR AS THE ASSESSEES CLAIM OF CONSIGNMENT BUSINESS IS CONCERN ED, WE FIND THAT IN THE RETURN OF INCOME, THE ASSESSEE HAS NOT DISCLOSE D ANY PROFIT OR LOSS FROM THE CONSIGNMENT BUSINESS. ANY ASSESSEE WHO IS ACTUALLY CARRYING ON A BUSINESS AND IS FILING THE RETURN OF INCOME WI LL DISCLOSE THE RESULT OF SUCH BUSINESS, WHETHER THERE IS PROFIT OR LOSS, IN THE RETURN OF INCOME. THE ASSESSEE CLAIMED CARRYING ON OF SUCH B USINESS ONLY AFTER HE WAS ASKED TO EXPLAIN THE CREDITS IN HIS BANK ACC OUNT WITH STATE BANK OF BIKANER. NO DOCUMENTARY EVIDENCE IN SUPPOR T OF THE CONSIGNMENT BUSINESS IS PRODUCED. IN VIEW OF THE A BOVE, WE AGREE WITH THE FINDING OF THE LOWER AUTHORITIES THAT THE CLAIM OF BUSINESS OF CLOTH ON CONSIGNMENT BASIS IS UNPROVED. HOWEVER, W E FIND FORCE IN THE ALTERNATIVE CONTENTION OF THE LEARNED COUNSEL THAT WHEN THERE IS A RUNNING BANK ACCOUNT AND THERE IS FREQUENT WITHDRAW AL AND DEPOSIT OF THE MONEY THAN THE TOTAL OF THE DEPOSIT IN THE BANK ACCOUNT CANNOT BE ADDED AS UNDISCLOSED INCOME BUT IT IS ONLY THE PEAK CREDIT IN THE BANK ACCOUNT WHICH CAN BE ADDED AS UNEXPLAINED INVESTMEN T. COPY OF THE BANK ACCOUNT IS PLACED AT PAGE 13 & 14 OF THE ASSES SEES PAPER BOOK. WE FIND THAT THE HIGHEST CREDIT IS ON 30 TH JULY, 2008 WHICH WAS `2,73,772/-. NO SATISFACTORY EXPLANATION FOR THE S OURCE OF SUCH INVESTMENT IS GIVEN. WE, THEREFORE, SUSTAIN THE AD DITION OF `2,73,772/- ITA-2032/DEL/2013 4 AS AGAINST THE ADDITION OF `25,93,400/- MADE BY THE ASSESSING OFFICER FOR UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT. 6. GROUND NOS.3, 4 & 5 OF THE ASSESSEES APPEAL REA D AS UNDER:- 3. THAT THE LD.A.O. HAS ERRED IN LAW AS WELL AS ON FACTS IN MAKING ADDITION OF RS.45998 ON ACCOUNT OF ALLEGE D DIFFERENCE IN ACCOUNT OF M/S ARYABANDHU. THE LD.CI T(A) HAS ALSO ERRED IN LAW AS WELL AS ON FACTS IN DISMIS SING THE SAID GROUND NO.2. 4. THAT THE LD.A.O. HAS ERRED IN LAW AS WELL AS ON FACTS IN MAKING ADDITION OF RS.71011 ON ACCOUNT OF ALLEGE D LOW HOUSEHOLD WITHDRAWALS. THE LD.CIT(A) HAS ALSO ERRED IN LAW AS WELL AS ON FACTS IN DISMISSING THE SAID GROUND NO.3. 5. THAT THE LD.A.O. HAS ERRED IN LAW AS WELL AS ON FACTS IN DISALLOWING CARRIAGE EXPENSES AMOUNTING TO RS.41 27. THE LD.CIT(A) HAS ALSO ERRED IN LAW AS WELL AS ON F ACTS IN DISMISSING THE SAID GROUND NO.4. 7. AT THE TIME OF HEARING BEFORE US, NO ARGUMENT WA S ADVANCED IN SUPPORT OF ANY OF THE ABOVE GROUNDS. ACCORDINGLY, GROUND NOS.3 TO 5 OF THE ASSESSEES APPEAL ARE TREATED AS NOT PRESSED AN D REJECTED AS SUCH. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 12 TH DECEMBER, 2014. SD/- SD/- ( (( (ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 12.12.2014 VK. ITA-2032/DEL/2013 5 COPY FORWARDED TO: - 1. APPELLANT : SHRI RITESH JINDAL, SHRI RITESH JINDAL, SHRI RITESH JINDAL, SHRI RITESH JINDAL, C/O SHRI S.K. BANSAL, CA, 101, KOCHAR MARKET, C/O SHRI S.K. BANSAL, CA, 101, KOCHAR MARKET, C/O SHRI S.K. BANSAL, CA, 101, KOCHAR MARKET, C/O SHRI S.K. BANSAL, CA, 101, KOCHAR MARKET, FIRST FLOOR, JHAJJAR ROAD, FIRST FLOOR, JHAJJAR ROAD, FIRST FLOOR, JHAJJAR ROAD, FIRST FLOOR, JHAJJAR ROAD, ROHTAK, HARYANA. ROHTAK, HARYANA. ROHTAK, HARYANA. ROHTAK, HARYANA. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1, NARNAUL. 1, NARNAUL. 1, NARNAUL. 1, NARNAUL. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR