Usha Compressor Pvt. Ltd., Ahmedabad V. The DY.CIT, Circle-5, Ahmedabad

ITA 2159/AHD/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1271 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-09-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 24-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: PF JAIN
• Keywords: Unexplained investment; Peak credit; Corroborative evidences

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD - , , BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ I.T.A. NO.2159/AHD/2014 ( / ASSESSMENT YEAR : 2011-12) USHA COMPRESSOR PVT.LTD. 1708/USHA ENGINEERING WORKS GIDC INDUSTRIAL ESTATE PHASE-III, GIDC, VATVA AHMEDABAD-382 445 / VS. THE DCIT CIRCLE-5 AHMEDABAD $ ./ ./ PAN/GIR NO. : AAACU 3349 R ( $' / APPELLANT ) .. ( ()$' / RESPONDENT ) $' * / APPELLANT BY : SHRI P.F. JAIN, A.R. ()$' + * / RESPONDENT BY : SHRI R.P. MAURYA, SR.DR ,- + . / DATE OF HEARING 10/09/2015 /0 + . / DATE OF PRONOUNCEMENT 24/09/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XIV, AHMEDAB AD [CIT(A) IN SHORT] DATED 23/06/2014 PERTAINING TO ASSESSMEN T YEAR (AY) 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- ITA NO.2159 /AH D/2014 USHA COMPRESSOR PVT.LTD. VS. DCIT ASST.YEAR 2011-12 - 2 - 1. THE LD. CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING IN ITS ENTIRETY THE ADDITION OF DEPOSITS IN THE AXIS BANK OF RS.75,60,496/- WITHOUT PROPERLY APPRECIATING THE FACTS AND SUBMISS ION OF THE APPELLANT. 2. HE HAS ERRED IN LAW AND ON FACTS IN NOT TREATING TH E SAID DEPOSITS OF RS.75,60,496/- IN THE AXIS BANK AS UNRECORDED SALES AND NOT DETERMINING THE PROFIT THEREON FOR THE PURPOSE OF ADDITION. 3. HE HAS ERRED IN LAW AND ON FACTS IN TREATING THE AM OUNT DEPOSITED IN THE BANK OF RS.75,60,496/- AS INCOME OF THE APPELLANT U /S.69 OF THE ACT. 4. HE HAS ERRED IN LAW AND ON THE FACT IN UPHOLDING TH E LEVY OF INTEREST U/S.234-B AND 234-D OF THE ACT. 5. ON THE FACTS NO SUCH ADDITION OUGHT TO HAVE BEEN MA DE. 6. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER AND/OR TO MODIFY ANY GROUND OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 30/12/2013, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION OF RS.75,60,496/- BEING THE UNACCOUNTED DE POSITS MADE IN THE BANK ACCOUNT NO.080010200014748 HELD IN AXIS BANK B Y THE ASSESSEE- COMPANY. THE ASSESSEE AGGRIEVED BY THE ORDER OF TH E AO, PREFERRED AN APPEAL BEFORE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. AGGRIEVED BY THE OR DER OF THE LD.CIT(A), NOW THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. GROUND NOS.1 TO 3 ARE AGAINST THE SAME ADDITION AND, THEREFORE, THESE ISSUES ARE DECIDED TOGETHER FOR THE SAKE OF C ONVENIENCE. THE LD.COUNSEL FOR THE ASSESSEE SHRI P.F.JAIN SUBMITTED THAT THE AUTHORITIES ITA NO.2159 /AH D/2014 USHA COMPRESSOR PVT.LTD. VS. DCIT ASST.YEAR 2011-12 - 3 - BELOW WERE NOT JUSTIFIED IN MAKING THE ENTIRE DEPOS ITS INTO THE BANK ACCOUNT AS UNDISCLOSED INCOME. HE SUBMITTED THAT THE AUTHORITIES BELOW WERE FAILED TO APPRECIATE THE FACT THAT THERE WERE WITHDRAWALS AND DEPOSITS INTO THE BANK ACCOUNT. HE FURTHER SUBMITT ED THAT THE GROSS PROFIT(GP) RATE FOR THE LAST THREE YEARS IS MORE OR LESS SIMILAR AS SHOWN IN THE AY 2009-10 WAS AT 16.21%. IN AY 2011-12 THE GP WAS AT 16.30% AND IN THE AY 2011-12 WAS AT 14.80%. THE LD.COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE NET PROFIT (NP) RATE FOR THE LAS T THREE YEARS; I.E. AY 2009-10 WAS AT 5.66%, FOR AY 2010-11 WAS AT 5.64% A ND AY 2011-12 WAS AT 4.85%. THE AVERAGE NP RATE COMES TO 5.38%. IF THE INCOME OF PROFIT ON SALE OF RS.75,60,496/- IS ALSO INCLUDED, THEN THE NP COMES AT 5.40% WHICH COMES TO RS.4,08,267/-/ THEREFORE, HE SUBMITTED THT THE ADDITION TO BE RESTRICTED TO THE EXTENT OF RS.4,08, 267/-. 3.1. ON THE CONTRARY, THE LD.SR.DR SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE H IMSELF HAS NOT DISCLOSED THE ALLEGED SALES IN HIS RETURN OF INCOME . HE SUBMITTED THAT ONCE THERE IS NO SUPPORTING EVIDENCE THAT THE AMOUN T REPRESENTED THE UNDISCLOSED SALES, THE AO WAS JUSTIFIED IN MAKING THE ADDITION. 4. IN THE REJOINDER, THE LD.COUNSEL FOR THE ASSESSE E SUBMITTED THAT UNDER THE IDENTICAL FACTS, VIEW OF THE VARIOUS LEG AL DECISIONS HAS BEEN THAT THE BANK ACCOUNT HAS NOT BEEN DISCLOSED AND T HE TOTAL DEPOSITS MADE ITA NO.2159 /AH D/2014 USHA COMPRESSOR PVT.LTD. VS. DCIT ASST.YEAR 2011-12 - 4 - IN THE BANK IS SURRENDERED AS UNDISCLOSED SALES AND THE NET PROFIT THEREON WAS REQUESTED TO BE TREATED AS INCOME OF THE COMPAN Y. HE PLACED RELIANCE ON THE DECISION OF THIS TRIBUNAL (ITAT AHM EDABAD BENCH D) IN THE CASE OF DINESHBHAI DHANSUKHLAL MITHAIWALA VS . ITO IN ITA NO.555/AHD/2010 & 321/AHD/2013 DATED 21/06/2013. HE FURTHER PLACED RELIANCE ON THE DECISION OF THIS TRIBUNAL (I TAT AHMEABAD BENCH B) IN THE CASE OF SHRI VIMALKUMAR JAVRIMAL BURUD VS. ITO IN ITA NO.523/AHD/2013 DATED 26/04/2013. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISIONS RELIED UPON BY THE LD.COUN SEL FOR THE ASSESSEE. THE QUESTION THAT NEEDS TO BE EXAMINED IS WHETHER T HE AUTHORITIES BELOW WERE JUSTIFIED AND CORRECT IN TREATING THE ENTIRE U NDISCLOSED DEPOSITS IN THE BANK ACCOUNT AS UNEXPLAINED INVESTMENT. UNDISPUTED LY, THE BANK ACCOUNT NO.080010200014748 WITH AXIS BANK OF ASSESS EE WAS FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSE SSMENT PROCEEDINGS TO THE AO. IT IS NOT THE CASE WHERE THE BANK ACCOUNT WAS NOT DISCLOSED TO THE AO BY THE ASSESSEE. THERE ARE TRANSACTIONS OF DEPOSITS BY WAY OF CHEQUES ON DIFFERENT DATES AND, SIMILARLY CASH WITH DRAWALS HAVE BEEN MADE ON DIFFERENT DATES DURING THE YEAR UNDER APPEA L. THE EXPLANATION OF THE ASSESSEE IS THAT THE DEPOSITS ARE UNDISCLOSED S ALE TRANSACTIONS. THE AO REJECTED THE CONTENTION OF THE ASSESSEE THAT THE DEPOSITS WERE SALE ITA NO.2159 /AH D/2014 USHA COMPRESSOR PVT.LTD. VS. DCIT ASST.YEAR 2011-12 - 5 - TRANSACTIONS AND PROCEEDED TO MAKE ADDITION ON DEPO SITS. THE AO AS WELL AS THE LD.CIT(A) HAS REJECTED THE CONTENTIONS OF THE ASSESSEE THAT AT THE MOST THE PEAK OF THE DEPOSITS BE DISALLOWED FRO M THE RECORDS, IT IS TRANSPIRED THAT THE AO HAS NOT MADE ANY ENQUIRY FRO M THE MATERIAL PLACED BEFORE HIM IN THE FORM OF THE BANK STATEMENT WHICH REFLECTED THE DEPOSITS BY CHEQUES. IN CASE, THE ASSESSEE WAS RELUCTANT TO FURNISH THE DETAILS OF THE DEPOSITORS, THEN IT WAS INCUMBENT UPON THE AO T O MAKE INDEPENDENT ENQUIRY FOR COMING TO THE CONCLUSION THAT THE DEPOS ITS ARE UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE HAS MADE CASH WITHDRAWALS ON VARIOUS DATES WHICH SHOWS THAT THE ASSESSEE WAS HAV ING THIS MUCH OF AMOUNT AND OUT OF THE DEPOSITS MADE INTO THE BANK A CCOUNT WAS AVAILABLE WITH THE ASSESSEE. UNDER THE FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE AUTHORITIES BELOW OUGHT TO HAVE ACCEPTED THE CONTEN TION OF THE ASSESSEE WITH REGARD TO THE APPLICATION OF THE PEAK CREDIT. THEREFORE, WE HEREBY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND R ESTORE THE APPEAL BACK TO THE FILE OF AO FOR VERIFYING THE PEAK CREDITS AND T REATING THE SAME AS UNDISCLOSED INCOME. IN THE LIGHT OF THE ABOVE, THE AO WOULD COMPUTE THE SAME ACCORDINGLY. THUS, GROUND NOS.1 TO 3 ARE ALLOWED FOR STATISTICAL PURPOSES. 6. GROUND NO.4 IS CONSEQUENTIAL IN NATURE. 7. GROUND NOS.5 & 6 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. ITA NO.2159 /AH D/2014 USHA COMPRESSOR PVT.LTD. VS. DCIT ASST.YEAR 2011-12 - 6 - 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON THURSDAY, THE 24 TH DAY OF SEPTEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( MANISH BORAD ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 24/ 09 /2015 4..., ,.../ T.C. NAIR, SR. PS !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ()$' / THE RESPONDENT. 3. 56 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-XIV, AHMEDABAD 5. 8,9 (56 , . 560 , / DR, ITAT, AHMEDABAD 6. 9;< =- / GUARD FILE. ! / BY ORDER, )8 ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 14.9.15 (DICTATION-PAD 11+ PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..14.9.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.24.9.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 24.9.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER