ACIT, Circle - 12(2), , Kolkata V. M/s. Visual Securas Ltd., , Kolkata

ITA 2126/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2613 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 09-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Keywords: Peak credit
• Section: 133(6); 143(1)

Judgement Text

1 ITA NO.2126/KOL/2018 VISUAL SECURITIES LTD. AY 2007-08 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( )BEFORE . , /AND . # . $ , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VAR KEY, JM] I.T.A. NO. 2126/KOL/2018 ASSESSMENT YEAR: 2007-08 ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-12(2), KOLKATA. VS. M/S. VISUAL SECURITIES LTD., (PAN: AABCV9770C) APPELLANT RESPONDENT DATE OF HEARING 27.01.2020 DATE OF PRONOUNCEMENT 18.03.2020 FOR THE APPELLANT SHRI SUPRIYO PAL, JCIT, SR. DR FOR THE RESPONDENT SHRI SIDDHARTH AGARWAL, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-4, KOLKATA DATED 31.07.2018 FOR AY 2007-08. 2. THE MAIN/SOLE GRIEVANCE OF THE REVENUE IS AGAINS T THE ACTION OF THE LD. CIT(A) IN DELETING THE AMOUNT OF RS.1,83,42,227/- AND REST RICTING THE ADDITION TO RS.17,98,774/- (PEAK CREDIT AMOUNT) IN THE TWO BANK ACCOUNTS. 3. BRIEFLY STATED FACTS ACCORDING TO AO ARE THAT TH E ASSESSEE HAD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.14,62,655/- ON 29.10.2007 AND THEREAFTER, THE RETURN WAS PROCESSED U/S. 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON 02.03.2009. LATER, INFORMATION WAS R ECEIVED FROM THE DDIT (INV.), KOLKATA TO THE AO THAT THE ASSESSEE COMPANY HAS CAR RIED OUT HIGH VALUE TRANSACTIONS IN THE BANK ACCOUNT MAINTAINED IN THE ICICI BANK LTD FROM ITS DIFFERENT BRANCHES. ACCORDING TO AO, IT WAS DISCERNED FROM THE INFORMAT ION THAT TRANSACTION PATTERNS SHOWED CREDIT BY CHEQUES FROM THIRD PARTIES AND IMM EDIATE CASH WITHDRAWAL TO SELF ONLY. ACCORDING TO THE INFORMATION, THE TOTAL CASH WITHDRAWAL FROM ICICI BANK LTD. 2 ITA NO.2126/KOL/2018 VISUAL SECURITIES LTD. AY 2007-08 WAS AMOUNTING TO RS.1,83,42,227/-. BASED ON THE AF ORESAID INFORMATION, THE AO ISSUED REOPENING NOTICE AND SIMULTANEOUSLY ISSUED NOTICE U/S. 133(6) OF THE ACT TO ICICI BANK AND COLLECTED THE INFORMATION FROM THE BRANCH MANAGER, ICICI BANK. THE AO HOWEVER OBSERVED FROM A PERUSAL OF THE REPLY OF THE ICICI BANK DATED 18.03.2015 THAT IT WAS NOT ACCOMPANIED BY ANY INFORMATION FOR THE R ELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. HOWEVER, THE AO TAKING NOTE OF THE INFORMATION FROM THE DDIT (INV.) ABOUT THE ALLEGED TRANSACTION REGARDING CASH WITHDR AWAL OF RS.1,83,42,227/- TREATED IT AS ESCAPED INCOME AND THEREAFTER, THE TOTAL INCOME OF THE ASSESSEE WAS COMPUTED AT RS.1,98,04,882/- WHICH INCLUDED INCOME AS PER THE I NCOME TAX RETURN OF RS.14,62,655/-, THUS MADE AN ADDITION OF RS.1,83,42 ,227/-. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO CALL FOR THE REMAND REPORT AND BASED ON THE REMAND REPORT RESTRICTED TH E ADDITION TO THE PEAK CREDIT OF RS.17,98,774/-. AGGRIEVED BY THE DECISION OF THE L D. CIT(A), THE REVENUE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE FIRST OF ALL THAT THE INFORMATION RECEIVED BY THE DDIT (INV.) THAT THE ASSESSEE HAD WITHDRAWN CASH AMOUNTING TO RS.1,83,42 ,227/- FROM ITS TWO UNDISCLOSED BANK ACCOUNTS IS ERRONEOUS. THE AMOUNT HAS BEEN WI THDRAWN BY THE ASSESSEE FROM THE TWO BANK ACCOUNTS AS FOUND BY THE AO IN THE REMAND REPORT IS TO THE TUNE OF RS.1,08,04,938/-. WE NOTE THAT THE LD. CIT(A) HAD CALLED FOR THE REMAND REPORT FROM THE AO WHO HAD GONE THROUGH THE TWO UNDISCLOSED BAN K ACCOUNTS AND FOUND THAT ASSESSEE HAD DEPOSITED IN BOTH THE ACCOUNTS TO THE TUNE OF RS.1,13,54,823/- AND WITHDRAWN TOTAL AMOUNT OF RS.1,08,04,938/-. WE NOT E THAT THE ASSESSEE HAD SHOWN A GP @ 14.3% ON DISCLOSED RECEIPT OF RS. 4.62 CR. AND (GP OF RS.66.10 LACS). THE AO IN THE REMAND REPORT HAS MADE A FINDING THAT DEPOSITS AND WITHDRAWAL FROM THE TWO UNDISCLOSED BANK ACCOUNTS ARE NOT MADE FOR OTHER LI NE OF BUSINESS IN WHICH THE ASSESSEE WAS ENGAGED. IN SUCH A SCENARIO, THE LD. CIT(A) WA S RIGHT TO RESTRICT THE ADDITION ONLY THE PEAK CREDIT IN TWO BANK ACCOUNTS WHICH COMES TO RS.17,98,774/- AND WHEN SUCH AN ADDITION IS MADE, THE ASSESSEES GP RAISES TO 20% A ND SINCE THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING SECURITY SERVICES, THE LD . CIT(A) HAS NOTED THAT THE GP IS 10 TO 20%. THEREFORE, BY THE IMPUGNED ACTION OF THE LD . CIT(A) THE GP OF ASSESSEE WORKS 3 ITA NO.2126/KOL/2018 VISUAL SECURITIES LTD. AY 2007-08 OUT TO 20%. IN THE FACTS AND CIRCUMSTANCES DISCUSS ED AND SINCE ASSESSEE IS IN TO THE BUSINESS OF PROVIDING SECURITY SERVICES THE ADDITIO N OF THE PEAK CREDIT IN TWO UNDISCLOSED BANK ACCOUNT, THE ACTION OF THE LD. CI T(A) IS REASONABLE AND NO INFIRMITY IS SEEN WHICH WARRANTS OUR INTERFERENCE. SO, WE UP HOLD THE SAME. WE ALSO NOTE FROM THE REMAND REPORT THAT THE AO IN THE REMAND REPORT HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT IN THE FACTS OF THE CASE, PEAK AMOUNT ONLY SHOULD BE BROUGHT TO TAX WHICH IS EVIDENT FROM THE AVERMENT OF THE AO IN THE REMAN D REPORT, WHICH IS AS UNDER: CONSIDERING THE SAME AND CONSIDERING THE CASE LAWS AS CITED BY THE ASSESSEE NO ADVERSE COMMENT ON THE SUBMISSION OF THE ASSESSEE I S HEREBY MADE.(EMPHASIS GIVEN BY US) 5. SINCE THE AO IN THE REMAND REPORT OFFERED NO ADVERS E COMMENTS ON THE SUBMISSION OF THE ASSESSEE TO ADOPT ONLY THE PEAK A MOUNT FOR TAXATION AND THEREAFTER, THE LD. CIT(A) RESTRICTING THE ADDITION TO ONLY THE PEAK CREDIT FOR TAXATION OUGHT NOT TO HAVE BEEN CHALLENGED BY THE DEPARTMENT. BE THAT A S IT MAY, AS WE DISCUSSED, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) WHICH WARRANTS ANY INTERFERENCE FROM OUR SIDE AND, THEREFORE, WE CONFIRM THE SAME AND DISMIS S THE GROUND OF APPEAL RAISED BY THE REVENUE. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 18TH MARCH , 2020 SD/- SD/- (J. SUDHAKAR REDDY) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18TH MARCH, 2020 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ACIT, CIRCLE-12(2), KOLKATA. 2 RESPONDENT M/S. VISUAL SECURITIES LTD., 242, B. B . CHATTERJEE ROAD, KASBA, JORASIB MANDIR, KOLKATA-700 042. . 3 . THE CIT(A)-4, KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .