M/s. Vijay H. Lilawala, Surat V. The Income Tax Officer, Ward-1(2)(5), Surat

ITA 2044/AHD/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5890 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 04-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Keywords: Reopening of assessment; Unexplained cash credit; Peak credit

Judgement Text

M/S. VIJAY H LILAWALA V. ITO, WARD-1(2)(5),SURAT/ITA. 2044/AHD/2016/A.Y.2008-09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A NO.2044/AHD/2016 / ASSESSMENT YEAR: 2008-09 M/S. VIJAY H LILAWALA, 2/1174, SAKDISWERI, SANGRAMPUR, SURAT-395 002. [PAN: AAZPL 4924 F] V . INCOME TAX OFFICER, WARD-1(2)(5), SURAT. / APPELLANT /RESPONDENT /ASSESSEE BY SHRI MEHUL SHAH, CA /REVENUE BY MS. ANUPAMA SINGLA, SR. DR / DATE OF HEARING: 11 - 02 - 2020 /PRONOUNCEMENT ON: 12 - 02 - 2020 /O R D E R PER O.P.MEENA, AM: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-II, SURAT [IN SHORT THE CIT(A)] DATED 24-05-2016, FOR THE ASSESSMENT YEAR 2008-09. 2. GROUND NO.1 & 3 ARE REOPENING OF ASSESSMENT IS NOT PRESSED BEFORE US, HENCE, THE SAME IS TREATED AS DISMISSED AS NOT PRESSED. 3. GROUND NO.2 RELATES TO CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS.20,38,261/- ON ACCOUNT OF DEPOSIT IN THE BANK ACCOUNT FROM UNDISCLOSED SOURCES. 4. BRIEF FACTS OF THE CASES ARE THAT THE AO NOTICED THAT THERE ARE DEPOSITS TO THE TUNE OF RS.20,38,261/- IN HIS BANK ACCOUNT FOR THE YEAR UNDER CONSIDERATION. IT WAS EXPLAINED THAT THE CASH DEPOSIT IN THE BANK ACCOUNT M/S. VIJAY H LILAWALA V. ITO, WARD-1(2)(5),SURAT/ITA. 2044/AHD/2016/A.Y.2008-09 PAGE 2 OF 4 REPRESENTS CASH RECEIVED FROM RETAIL TRADING OF PLASTIC BAGS. HOWEVER, THE ASSESSEE HAS FAILED TO FURNISH ANY DETAILS REGARDING PLASTIC BAGS, THEREFORE, THE AO TREATED THE SAME AS UNEXPLAINED AND MADE THE ADDITION ACCORDINGLY. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). WHEREIN IT WAS SUBMITTED THAT THE ASSESSEE HAS RETAILER TRADING OF PLASTIC BAGS HAVING TURN OF RS.13,27,900/- AND NET PROFIT SHOWS AT RS.1,08,290/-. HOWEVER, THE CIT(A) OBSERVED THAT THE APPELLANT HAD NEVER FILED ANY APPEAL FOR THE RELEVANT ASSESSMENT YEAR. FURTHER, NO DETAILS OF REGISTRATION WITH VAT/SALES TAX AUTHORITIES, ANY REGISTRATION WITH LOCAL AUTHORITIES FOR RUNNING THE BUSINESS UNDER THE SHOP AND ESTABLISHMENT ACT, ETC. WAS FURNISHED. THE BANK ACCOUNT HAS NOT BEEN GIVEN, HENCE THE EXPLANATION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE. ACCORDINGLY, THE ADDITION MADE BY THE AO WAS CONFIRMED. 6. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THIS TRIBUNAL. THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE IS A RETAIL TRADERS OF PLASTIC BAG HAVING TURNOVER OF RS.21,55,084/-. THE ASSESSEE IS VERY SMALL RETAIL DEALER IN PLASTIC BAG AND AFTER DEATH OF HIS BROTHER IN A CAR ACCIDENT AS ON 03-03-2013 AND HIS FAMILY FACING COMPLETE FINANCIAL CRISES AND SOMEHOW MANAGING AFFAIRS OF THE FAMILY. THEREFORE, IT WAS CONTENDED THAT TOTAL TRANSACTIONS APPEARED IN THE BANK ACCOUNT CANNOT BE ADDED INSTEAD OF PROFIT EMBEDDED THEREIN CAN BE ADDED. THE LD. COUNSEL DRAWN OUT ATTENTION TO BANK ACCOUNT STATEMENT REFERRED AT PAPER BOOK PAGE 1, 2, 3 & 4. WE SHOW THAT CREDIT AND DEBITS AS WELL AS THE DEBITS ARE APPEARING IN THE NAME OF VARIOUS BUSINESS CONCERNS. WE SUGGEST THAT THE ASSESSEE WAS ENGAGED IN RETAIL BUSINESS MORE M/S. VIJAY H LILAWALA V. ITO, WARD-1(2)(5),SURAT/ITA. 2044/AHD/2016/A.Y.2008-09 PAGE 3 OF 4 OVER THE ENTIRE DEPOSITS IN THE BANK ACCOUNT CAN BE ADDED AND ONLY PEAK CREDIT BALANCE CAN BE ADDED WHICH IS AT RS.68016.00 CRORE AS ON 27-11-2007, WHEREAS THE ASSESSEE HAS ALREADY DECLARED INCOME OF RS.1,08,289/- IN THE RETURN OF INCOME IN NET PROFIT @5% WHICH IS NET PROFIT @5%. THEREFORE, PLACING RELIANCE ON THE DECISION OF ITAT, AHMEDABAD IN THE CASE OF RAMILABEN B. PATEL V. ITO (2018) 100 TAXMANN.COM 325 (AHMEDABAD) SUBMITTED THAT THE BANK STATEMENT IS NOT CONSIDERED AS BOOKS OF ACCOUNT AND THEREFORE ANY SUM HAVE BEEN CREDIT BUSINESS CANNOT BE TREATED UNEXPLAINED CASH CREDIT. THE LD. COUNSEL FURTHER PLACE RELIANCE ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. PRADEEP SHANTILAL PATEL [42 TAXMANN.COM 2] WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE ADMITTED THAT CASH DEPOSITS PERTAINED TO HIS RETAIL BUSINESS BUT DETAILS AND NATURE OF BUSINESS WERE NOT FORTHCOMING FROM RECORD, CONSIDERING TOTAL TURNOVER OF ASSESSEE, NET INCOME HAD TO BE DETERMINED UNDER SECTION 44AF. 7. PER CONTRA, THE LD. SR. DR SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE SUM OF RS.20,38,261/- FOUND CREDITED IN THE ASSESSEES BANK ACCOUNT WHICH WERE CLAIMED TO BE SALES RECEIPT OF PLASTIC BAG. ON-GOING THROUGH THE DETAILS OF BANK ACCOUNT, IT IS NOT SEEN THAT THERE ARE CASH DEPOSITS AS WELL AS CASH WITHDRAWALS AND WITHDRAWALS APPEARED IN THE NAME OF VARIOUS BUSINESS CONCERNS. IN SUCH CASE, THE ADDITION OF ENTIRE AMOUNT CANNOT BE ADDED AS HELD BY HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. PRADEEP SHANTILAL PATEL (SUPRA). SINCE, THE M/S. VIJAY H LILAWALA V. ITO, WARD-1(2)(5),SURAT/ITA. 2044/AHD/2016/A.Y.2008-09 PAGE 4 OF 4 ASSESSEE HAS ALREADY DISCLOSED AN AMOUNT OF RS.1,08,289/- ON THE TOTAL TURNOVER OF RS.21,28,261/- WHICH IS NP RATE OF 5% ON PRESUMPTIVE BASIS, BEING NO BOOKS CASE, WHICH IS MORE THAN PEAK CREDIT BALANCE APPEARED IN THE ACCOUNT OF THE ASSESSEE. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE. IN VIEW OF THIS FACT, THE ADDITION MADE BY THE AO IS DELETED. ACCORDINGLY, THIS APPEAL OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12-02-2020 SD/- SD/- (SANDEEP GOSAIN) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT: DATED: 12 TH FEB, 2020 / SAMANTA, PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/ GUARD FILE OF ITAT. BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, SURAT