Somenath Kesh , Kolkata V. ITO, Ward - 2(3), Durgapur, Durgapur

ITA 2213/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5857 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 18-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOWDHURY
• Keywords: Unexplained cash credit; Peak credit
• Section: 133(6); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC, KOLKATA [BEFORE SHRI P.M. JAGTAP, AM] I.T.A. NO. 2213/KOL/2017 ASSESSMENT YEAR: 2009-10 SOMENATH KESH..................................................................APPELLANT SUBASH AGARWAL & ASSOCIATES, 1, GIBSON LANE, SIDDHA GIBSON, 2 ND FLOOR, SUITE NO. 213, KOLKATA 700 069. [PAN: AMCPK 6631 K] INCOME TAX OFFICER DURGAPUR...........................RESPONDENT WARD NO. 2(3), CITY CENTRE, DURGAPUR 713 216. APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI ROBIN CHOWDHURY, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : MAY 31, 2018 DATE OF PRONOUNCING THE ORDER : JULY 20, 2018 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS), DURGAPUR DATED 16.08.2017 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS. 17,99,863/- MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) BY TREATING THE CASH DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNT OF THE ASSESSEE AS UNEXPLAINED CASH CREDITS UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS NOT FILED BY HIM UNDER SECTION 139. A NOTICE UNDER SECTION 148 THEREFORE WAS ISSUED BY THE A.O. ON 30.03.2016 IN RESPONSE TO WHICH THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE ON 18.05.2016 DECLARING A TOTAL INCOME OF RS. 1,49,250/-. DURING THE YEAR UNDER 2 I.T.A. NO. 2213/KOL/2017 ASSESSMENT YEAR: 2009-10 SOMENATH KESH CONSIDERATION, CASH WAS FOUND TO BE DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT FROM TIME TO TIME AGGREGATING TO RS. 17,99,863/-. THE SOURCE OF THE SAID DEPOSIT WAS EXPLAINED BY THE ASSESSEE MAINLY AS THE DEPOSITS MADE OUT OF CASH RECEIVED FROM SMT. SHYAMOLI MUKHERJEE. IT WAS SUBMITTED BY THE ASSESSEE THAT SMT. SHYAMOLI MUKHERJEE, A PDS DEALER OF KEROSENE OIL WAS GIVING CASH TO THE ASSESSEE HAVING OIL TANKER BUSINESS FOR DEPOSITING THE SAME IN HIS BANK ACCOUNT. IT WAS ALSO SUBMITTED BY THE ASSESSEE THAT BANK DRAFTS WERE DRAWN FROM THE AMOUNTS SO DEPOSITED IN FAVOUR OF THE IOC FOR PROCURING KEROSENE OIL FOR ON BEHALF OF SMT. SHYAMOLI MUKHERJEE. IN ORDER TO VERIFY THIS EXPLANATION OF THE ASSESSEE, NOTICES UNDER SECTION 133(6) WERE ISSUED BY THE A.O. TO SMT. SHYAMOLI MUKHERJEE. THERE WAS HOWEVER NO RESPONSE FROM SMT. SHYAMOLI MUKHERJEE TO THE SAID NOTICES. WHEN THIS POSITION WAS CONFRONTED BY THE A.O. TO THE ASSESSEE, THE LATER RAISED AN ALTERNATIVE CONTENTION THAT PEAK CREDIT BALANCE IN HIS BANK ACCOUNT COULD BE ADDED TO HIS TOTAL INCOME. THIS ALTERNATIVE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE A.O. ACCORDING TO HIM, THE ASSESSEE WAS CHANGING HIS STAND BY INITIALLY STATING THAT THE CASH DEPOSITED WAS BELONGING TO SMT. SHYAMOLI MUKHERJEE THEREBY DISOWNING THE SAME AND THEN CHANGES HIS STAND BY SEEKING ADDITION TO THE EXTENT OF PEAK CREDIT THEREBY OWNING THE CASH DEPOSITS. HE, THEREFORE, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND MADE AN ADDITION OF RS. 17,99,863/- TO THE TOTAL INCOME OF THE ASSESSEE BY TREATING THE CASH DEPOSITS FOUND TO BE MADE IN THE ACCOUNT OF THE ASSESSEE AS UNEXPLAINED CASH CREDITS. 3. THE ADDITION MADE BY THE A.O. BY TREATING THE CASH DEPOSITS FOUND TO BE MADE IN HIS BANK ACCOUNT AS UNEXPLAINED WAS CHALLENGED 3 I.T.A. NO. 2213/KOL/2017 ASSESSMENT YEAR: 2009-10 SOMENATH KESH BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(A). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED THAT THE ADDITION TO THE EXTENT OF PEAK CREDIT BALANCE IN HIS BANK ACCOUNT COULD BE MADE TO HIS TOTAL INCOME INSTEAD OF ADDING THE ENTIRE AMOUNT OF CASH DEPOSITS AS DONE BY THE A.O. THIS CONTENTION OF THE ASSESSEE HOWEVER WAS NOT FOUND ACCEPTABLE BY THE LD. CIT(A) ON THE GROUND THAT THE CASH DEPOSITED IN HIS BANK ACCOUNT WAS NOT WITHDRAWN BY THE ASSESSEE AND THE SAME WAS UTILISED FOR DRAWING DEMAND DRAFT IN FAVOUR OF THE OIL COMPANIES. HE HELD THAT THE PEAK CREDIT THEORY THUS WAS NOT APPLICABLE IN THE CASE OF THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY THE A.O. BY TREATING THE ENTIRE CASH DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNT AS UNEXPLAINED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A0, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT SIMILAR CASH DEPOSITS WERE FOUND TO BE MADE IN THE BANK ACCOUNT OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2010-11 AND THE EXPLANATION OFFERED BY THE ASSESSEE THAT THE SAME BELONGED TO M/S. MUKHERJEE OIL AGENCY WAS ACCEPTED BY THE A.O. HE HAS INVITED MY ATTENTION TO THE COPY OF THE ASSESSMENT ORDER PASSED BY THE A.O. FOR A.Y. 2010-11 UNDER SECTION 143(3)/147 OF THE ACT PLACED AT PAGE NO 5 TO 7 OF HIS PAPER BOOK TO POINT OUT THAT THE SAID EXPLANATION OFFERED BY THE ASSESSEE WAS ACCEPTED BY THE A.O. AFTER MAKING VERIFICATION FROM M/S. MUKHERJEE OIL AGENCY BY OBSERVING AS UNDER: 4 I.T.A. NO. 2213/KOL/2017 ASSESSMENT YEAR: 2009-10 SOMENATH KESH NOTICE U/S 133(6) WAS ISSUED TO MUKHERJEE OIL AGENCY, PURULIA TO VERIFY THE CLAIM OF THE ASSESSEE. MUKHERJEE OIL AGENCY IN THEIR REPLY DATED 01.12.2007 AND FURTHER REPLY DATED 11.12.2017 HAS STATED THAT THE ASSESSEE WAS THEIR DELIVERY MAN WHO COLLECTED CASH ON BEHALF OF HER AGENCY FROM DEALERS OF THE DISTRIBUTION AREA AND DEPOSITED IN HIS ACCOUNT FOR MAKING PAYMENTS ON IOCL ON BEHALF OF HER CONCERN. 5. KEEPING IN VIEW THIS FACTUAL POSITION THAT THE SIMILAR EXPLANATION OF THE ASSESSEE AS REGARDS CASH DEPOSITS FOUND TO BE MADE IN HIS BANK ACCOUNT WAS ACCEPTED BY THE A.O. ON VERIFICATION IN A.Y. 2010-11, THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE SIMILAR ISSUE INVOLVED IN THE YEAR UNDER CONSIDERATION MAY BE SENT BACK TO THE A.O. FOR GIVING THE ASSESSEE ONE MORE OPPORTUNITY OF EXPLAINING THE CASH DEPOSITS FOUND TO BE MADE IN HIS BANK ACCOUNT BY PRODUCING THE RELEVANT DOCUMENTARY EVIDENCE. I FIND MERIT IN THIS CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. THE IMPUGNED ORDER OF THE LD. CIT(A) ON THIS ISSUE IS ACCORDINGLY SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRESH AFTER GIVING ONE MORE OPPORTUNITY TO THE 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JULY, 2018. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER DATED: 20/07/2018 BISWAJIT, SR. PS 5 I.T.A. NO. 2213/KOL/2017 ASSESSMENT YEAR: 2009-10 SOMENATH KESH COPY OF ORDER FORWARDED TO: 1. SOMENATH KESH, SUBASH AGARWAL & ASSOCIATES, 1, GIBSON LANE, SIDDHA GIBSON, 2 ND FLOOR, SUITE NO. 213, KOLKATA 700 069. 2. ITO, WARD 2(3), DURGAPUR. 3. THE CIT(A) [SENT THROUGH MAIL] 4. THE CIT 5. DR [SENT THROUGH MAIL] TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA