Shri Pritesh Dhirajlal Shah, JAMNAGAR V. The Income Tax Officer, Ward-1(2), JAMNAGAR

ITA 22/RJT/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0175 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 07-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D R CHHATRE
• Assessee Lawyers: CHETAN L AGARWAL
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AH MEDABAD] (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 22/RJT/2014 (ASSESSMENT YEAR: 2010-11) SHRI PRITESH DHIRJLAL SHAH OPP. SHREENAGAR APARTMENT, KHODIYAR COLONY, JAMNAGAR V/S THE INCOME TAX OFFICER WARD-1(2), JAMNAGAR (APPELLANT) (RESPONDENT) PAN: ATSP4845E APPELLANT BY : SHRI CHETAN L. AGARWAL, A. R. RESPONDENT BY : SHRI D.R. CHHATRE, SR. D.R. ( )/ ORDER DATE OF HEARING : 08 -08-201 6 DATE OF PRONOUNCEMENT : 11 -08-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), JAMNAGAR DATED 07.11.2013 PERTAINING TO A.Y. 2010-1 1. ITA NO. 22/R JT/2014 . A.Y.2010-11 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE RELATES TO THE A DDITION OF RS. 8,06,681/- ON ACCOUNT OF PEAK BALANCE IN UNDISCLOSE D ICICI BANK ACCOUNT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE HAS FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME AT RS. 1,99 ,930/-. THE INCOME WAS DECLARED UNDER THE HEAD SALARIES. ON THE BASI S OF ANNUAL INFORMATION RETURNS, THE RETURN OF THE ASSESSEE WAS SELECTED FOR SCRUTINY THROUGH CASS. TO VERIFY/EXAMINE THE SOURCE OF CASH DEPOSITS IN SAVING BANK ACCOUNT WITH ICICI, JAMNAGAR. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DE POSITED AMOUNTING TO RS. 56,37,215/- IN ICICI BANK ACCOUNT. THE ASSES SEE FILED A DETAILED REPLY EXPLAINING THAT HE WAS CARRYING ON THE BUSINE SS OF BRASS PARTS GOODS WITH VARIOUS PARTIES ACROSS THE COUNTRY. IT W AS EXPLAINED THAT THE SALE PROCEEDS OF THE GOODS SO SOLD ACROSS THE C OUNTRY WERE DEPOSITED IN CASH IN THE SAID ICICI BANK ACCOUNT. I T WAS FURTHER EXPLAINED THAT THE CREDIT SIDE OF THE SAID ICICI BA NK ACCOUNT CONTAINS DEPOSITS FROM VARIOUS LOCATIONS FROM ALL OVER INDIA . IT WAS EXPLAINED THAT THE DEPOSITS AND WITHDRAWALS FROM THE SAID ACC OUNT ARE NOTHING BUT SALE RECEIPTS AND CASH WITHDRAWAL FOR URD PURCH ASES. THE ASSESSEE OFFERED PROFIT BETWEEN 3 TO 4% FROM THE SA ID ACTIVITIES. 5. THE SUBMISSIONS OF THE ASSESSEE WERE DISMISSED BY T HE A.O. WHO ADOPTED THE PEAK BALANCE AT RS. 8,06,681/- AND MADE THE ADDITION OF RS. 8,06,681/- BEING THE AMOUNT OF PEAK CREDIT IN T HE SAID ICICI BANK ACCOUNT. ITA NO. 22/R JT/2014 . A.Y.2010-11 3 6. ASSESSEE CARRIED MATTER BEFORE THE LD. CIT(A) BUT W ITHOUT ANY SUCCESS. 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REITERA TED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. THE LD. COUNSE L FURTHER DREW OUR ATTENTION TO THE ORDER IMPOSING PENALTY U/S. 271B R .W.S. 44AB OF THE ACT. 8. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE A.O. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WITH THE ASSISTANCE OF THE LD. C OUNSEL, WE HAVE GONE THROUGH THE RELEVANT DOCUMENTARY EVIDENCES REFERRED TO IN THE LIGHT OF THE RULE 18 OF THE APPELLATE TRIBUNAL RULES. THE UN DISPUTED FACT IS THAT THE SAID ICICI BANK ACCOUNT WAS NOT DISCLOSED BY TH E ASSESSEE. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSES SEE CAME OUT WITH THE REPLY THAT HE IS DOING BUSINESS IN BRASS PARTS OUTSIDE ITS BOOKS OF ACCOUNTS AND THE DEPOSITS IN THE SAID ICICI BANK AC COUNT ARE NOTHING BUT SALE RECEIPTS. 10. IT WOULD BE PERTINENT TO REFER TO THE FINDINGS OF T HE A.O. GIVEN IN THE ORDER IMPOSING PENALTY U/S. 271B R.W.S. 44AB OF THE ACT AND THE SAME READS AS UNDER:- IN VIEW OF THE LEGAL AND FACTUAL POSITION OF THE C ASE, I AM SATISFIED THAT THE ASSESSEES CASE IS LIABLE FOR IMPOSITION OF PENALTY U/S. 271B OF THE ACT. I, THEREFORE, DIRECT THE ASSESSEE TO PAY A SUM OF RS. 52,834/- BEING 0.5% OF GROSS RECEIPTS/ TURNOVER OF RS. 1,05,66,910/-. 11. THE AFOREMENTIONED FINDINGS OF THE A.O WHILE LEVYIN G THE PENALTY CLEARLY SHOWS THAT THE A.O. HAS ACCEPTED THE GROSS RECEIPTS/TURNOVER FROM THE UNDISCLOSED BUSINESS AT RS. 1,05,66,910/-. ITA NO. 22/R JT/2014 . A.Y.2010-11 4 12. IN OUR CONSIDERED OPINION, ONCE THE DEPOSITS HAVE B EEN ACCEPTED AS RECEIPTS FROM THE SALE OF BRASS PARTS, THE ONLY LOGICAL CONCLUSION WHICH CAN BE DRAWN IS THAT OF THE ESTIMATION OF PRO FIT. IN OUR CONSIDERED OPINION, A NET PROFIT RATE OF 5% SHOULD MEET THE ENDS OF JUSTICE. WE, ACCORDINGLY, DIRECT THE A.O. TO COMPUT E THE NET TAXABLE PROFIT @ 5% OF THE ADMITTED GROSS RECEIPTS/TURNOVER OF RS.1,05,66,910/-. 13. APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 11 - 08 - 2016 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJ KOT