Ratan Pal Singh, Howrah V. I.T.O Wd - 48(2),kolkata, Kolkata

ITA 2239/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4764 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 27-05-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 12-08-2013
• Court: TRIBUNAL
• Assessee Lawyers: ANIKESH BANERJEE
• Keywords: Peak credit
• Section: 143(3); 147; 148

Judgement Text

I.T.A. NO. 2239/KOL/2013 ASSESSMENT YEAR: 2005-2006 & I.T.A. NO. 2183/KOL/2013 ASSESSMENT YEAR: 2005-2006 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 2239/KOL/ 2013 ASSESSMENT YEAR : 2005-2006 SHRI RATAN PAL SINGH,.............................. .............................APPELLANT 30/31, BELLILIOUS ROAD, GHUSURI, HOWRAH-711 101 [PAN : ATZPS 6772 M] -VS.- INCOME TAX OFFICER,................................ .............................RESPONDENT WARD-48(2), KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 & I.T.A. NO. 2183/KOL/ 2013 ASSESSMENT YEAR : 2005-2006 INCOME TAX OFFICER,................................ ..............................APPELLANT WARD-48(2), KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 -VS.- SHRI RATAN PAL SINGH,.............................. ............................RESPONDENT 30/31, BELLILIOUS ROAD, GHUSURI, HOWRAH-711 101 [PAN : ATZPS 6772 M] APPEARANCES BY: SHRI ANIKESH BANERJEE, ADVOCATE , FOR THE ASSESSEE SHRI RAJT KUMAR KUREEL, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MAY 27, 2016 DATE OF PRONOUNCING THE ORDER : JUNE 03, 2016 O R D E R PER SHRI P.M. JAGTAP :- THESE TWO APPEALS, ONE FILED BY THE ASSESSEE BEING ITA NO. 2239/KOL/2013 AND THE OTHER FILED BY THE REVENUE BE ING ITA NO. I.T.A. NO. 2239/KOL/2013 ASSESSMENT YEAR: 2005-2006 & I.T.A. NO. 2183/KOL/2013 ASSESSMENT YEAR: 2005-2006 PAGE 2 OF 7 2183/KOL/2013, ARE CROSS APPEALS, WHICH ARE DIRECTE D AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX-(APPEALS)-XXX , KOLKATA DATED 26.03.2013. 2. AT THE OUTSET, IT IS OBSERVED THAT THERE IS A DE LAY OF 36 DAYS ON THE PART OF THE ASSESSEE IN FILING HIS APPEAL BEFORE TH E TRIBUNAL. IN THIS REGARD, THE ASSESSEE HAS FILED AN APPLICATION SEEKI NG CONDONATION OF THE SAID DELAY AND KEEPING IN VIEW THE REASONS GIVEN TH EREIN, WE ARE SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR THE DELAY OF 36 DAYS ON THE PART OF THE ASSESESE IN FILING HIS APPEAL BEFORE THE TRIBUN AL. EVEN THE LD. D.R. HAS NOT RAISED ANY SERIOUS OBJECTION IN THIS REGARD. TH E SAID DELAY IS, THEREFORE, CONDONED AND THE APPEAL IS BEING DISPOSE D OF ON MERIT. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF TRADING OF IRON AND STEEL UNDER THE NAME AND STYLE OF HIS PROPRIETARY CONCERN M/S. RATAN TRADING CORPORATION. AS PER THE AIR INFORMATION RECEIVED BY THE ASSESSING OFFICER, THE ASSESSEE HAD DEPOSITED SUBSTANTIAL AMOUNTS IN THE BANK ACCOUNT MAINTAINED WITH HSBC BANK, HOWRAH MAIDAN BRANCH. SINCE THE SAID BANK ACCOUNT W AS NOT DISCLOSED BY THE ASSESSEE, A NOTICE UNDER SECTION 148 WAS ISSUED BY THE ASSESSING OFFICER ON 04.02.2009. IN RESPONSE TO THE SAID NOTI CE, THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y THE ASSESSEE ON 19.05.2009 DECLARING TOTAL INCOME OF RS.3,98,756/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE PARTICULARS OF DEPOSITS AND WITHDRAWALS MADE FROM THE ACCOUNT MAINTAINED WITH HSBC BANK WER E FURNISHED BY THE ASSESSEE. ON THE BASIS OF THE SAID PARTICULARS, THE PLEA TAKEN BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT ONLY THE PEAK CREDIT OF THE UNDISCLOSED BANK ACCOUNT MAINTAINED WITH HSBC BANK COULD BE TREATED AS HIS INCOME. THIS PLEA OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER AS HE FOUND THAT THE ENTIRE CREDI TS APPEARING IN THE BANK ACCOUNT OF THE ASSEESSEE WITH HSBC BANK WERE A DDED TO THE TOTAL I.T.A. NO. 2239/KOL/2013 ASSESSMENT YEAR: 2005-2006 & I.T.A. NO. 2183/KOL/2013 ASSESSMENT YEAR: 2005-2006 PAGE 3 OF 7 INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED FOR A.Y. 2006-07 AND THE ADDITION SO MADE WAS CONFIRMED EVEN BY THE LD. CIT(APPEALS). FOLLOWING THE STAND TAKEN IN THE ASSESSMENT YEAR 20 06-07, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE FOR MAKI NG ADDITION ON PEAK CREDIT BASIS AND ADDED THE ENTIRE CREDITS APPEARING IN THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE AGGREGATING TO RS.76,3 8,500/- TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) READ WITH SECTION 147 VIDE AN ORDER DATED 30.12.201 0. 4. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) READ WITH SECTION 147, AN APPEAL WAS PREFERR ED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) DISPUTING THE ADDITION OF RS.76,38,500/- MADE ON ACCOUNT OF THE ENTIRE CREDITS APPEARING IN HIS U NDISCLOSED BANK ACCOUNT. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS), RELIANCE WAS PLACED BY THE ASSESSEE O N THE ORDER OF THE TRIBUNAL DATED 15.02.2013 PASSED IN HIS OWN CASE FO R A.Y. 2006-07 IN ITA NO. 1286/KOL/2009, WHEREIN THE PLEA OF THE ASSESSEE FOR ADDITION ON PEAK CREDIT BASIS IN RESPECT OF TRANSACTIONS APPEAR ING IN THE UNDISCLOSED BANK ACCOUNTS WAS ACCEPTED BY THE TRIBUNAL AND THE ASSESSING OFFICER WAS DIRECTED TO RESTRICT THE ADDITION AFTER VERIFYI NG THE PEAK CREDIT. KEEPING IN VIEW THE SAID DECISION OF THE TRIBUNAL I N ASSESSEES OWN CASE FOR AY 2006-07 ON THE SIMILAR ISSUE, THE MATTER INV OLVED IN THE YEAR UNDER CONSIDERATION WAS REMANDED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER FOR HIS VERIFICATION AND COMMENTS. IN THE R EMAND REPORT DATED 21.03.2013 SUBMITTED TO THE LD. CIT(APPEALS), THE A SSESSING OFFICER OFFERED HIS COMMENTS AS UNDER:- IN THE ASSESSMENT YEAR 2005-06 REGARDING WORKING OF PEAK CREDIT OF THE ASSESSEE AS UNDER: IN THE BANK ACCOUNT IN QUESTION THE ASSESSEE HAD A PEAK CREDIT OF RS.5,57,235/- BEFORE PURCHASING LAND FOR RS.9,90,000/-. AFTER THE TRANSFER MADE FOR ACQUISIT ION OF LAND THE ASSESSEE HAD MAINTAINED A PEAK OF I.T.A. NO. 2239/KOL/2013 ASSESSMENT YEAR: 2005-2006 & I.T.A. NO. 2183/KOL/2013 ASSESSMENT YEAR: 2005-2006 PAGE 4 OF 7 RS.4,52,235/-. IT IS INTERPRETED THAT HE USED RS.5, 57,235 RS.4,52,235/- = RS.1,05,000/- FOR PURCHASING LAND THE AMOUNT OF WHICH COULD NOT FURTHER BE REINVESTED. UN DER THESE CIRCUMSTANCES, RS.5,57,235/- + RS.(9,90,000 1,05,000)= RS.14,42,235/- HAS BEEN CONSIDERED AS HI S PEAK CREDIT IN THE UNDISCLOSED ACCOUNT. 5. WHEN THE REMAND REPORT SUBMITTED BY THE ASSESSIN G OFFICER WAS CONFRONTED TO THE ASSESSEE BY THE LD. CIT(APPEALS), THE ASSESSEE ACCEPTED THE PEAK CREDIT AS WORKED OUT BY THE ASSESSING OFFI CER AT RS.5,57,235/-. HE, HOWEVER, OBJECTED TO THE ADDITION OF RS.8,85,00 0/- SUGGESTED BY THE ASSESSING OFFICER ON ACCOUNT OF PAYMENT OF LAND BY SUBMITTING THAT THE PAYMENT TO DRT-II ALONE DID NOT DENOTE THERE WAS PU RCHASE OF LAND AND THE DRAFT IN FAVOUR OF DRT-III WAS DRAWN ON BEHALF OF OTHERS. THIS OBJECTION OF THE ASSESSEE WAS NOT FOUND SUSTAINABLE BY THE LD. CIT(APPEALS) AND OVERRULING THE SAME, HE PROCEEDED TO SUSTAIN THE ADDITION ON ACCOUNT OF TRANSACTIONS APPEARING IN TH E UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE WITH HSBC BANK TO THE EXTEN T OF RS.14,42,235/- AS WORKED OUT BY THE ASSESSING OFFICER IN THE REMAND R EPORT FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 3 OF HIS I MPUGNED ORDER:- 3. THE SUBMISSIONS OF THE APPELLANT AS ABOVE AND T HE REMAND REPORT OF THE A.O. IN THIS CASE HAS BEEN CONSIDERED AND IT IS SEEN THAT THE ISSUE IS REGARDING TAXATION OF UNDISC LOSED DEPOSITS IN THE APPELLANT'S BANK ACCOUNT IN HSBC OF RS.76,38,500/-. IT IS SEEN THAT THE APPELLANT HAS R ELIED UPON THE DECISION OF HON'BLE ITAT IN ITS OWN CASE FOR A. Y.2 006-07 IN ITA NO.1286/KOL./2009, DATED 15.02.2013 IN WHICH THE HO N'BLE ITAT HAD HELD THAT- 'IN VIEW OF THE ABOVE, WE DIRECT THE A. O. TO ADOPT THE PEAK CREDIT OF THESE TWO AMOUNTS AFTER EXAMINING TH E SAME. THEREFORE, CONSIDERING THE FACTS OF THE CASE IN THE CURRENT YEAR WHICH ARE IDENTICAL TO THE APPELLANT'S OWN CASE IN A.Y.2006-07 EXCEPT THAT THERE WAS ONLY ONE BANK ACCOUNT IN HSBC IN THE CURRENT YEAR. THEREFORE, THE PRINCIPLE OF PEAK CRED IT IS ADOPTED FOLLOWING THE DECISION OF THE ITAT AS ABOVE IN THE APPELLANT'S I.T.A. NO. 2239/KOL/2013 ASSESSMENT YEAR: 2005-2006 & I.T.A. NO. 2183/KOL/2013 ASSESSMENT YEAR: 2005-2006 PAGE 5 OF 7 OWN CASE. HOWEVER THE PEAK CREDIT SUBMITTED BY THE APPELLANT AT RS.5,57,235/- IS NOT ACCEPTED AS IT HAS NOT GIVE N ANY SATISFACTORY EXPLANATION IN RESPECT OF THE AMOUNT O F RS.8,85,000/- REFERRED TO BY THE A.O. AS NOT AVAILA BLE FOR FURTHER INVESTMENT IN HIS REMAND REPORT. THEREFORE, THE PEAK CREDIT IN RESPECT OF THE DEPOSITS IN THE BANK ACCOU NT OF THE APPELLANT IS TAKEN AT RS.14,42,235/- AND THE ADDITI ON IS CONFIRMED TO THIS EXTENT. (RELIEF RS.61,96,265/-. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE AND ASSESSEE BOTH ARE IN APPEALS BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS AGREED BY THE LD. REPRESENTATIVES OF BOTH THE SIDES, THE ISSUE INVOLV ED IN THE APPEAL OF THE REVENUE RELATING TO THE RESTRICTION BY THE LD. CIT( APPEALS) OF THE ADDITION ON ACCOUNT OF THE RELEVANT TRANSACTIONS REFLECTED I N THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE ONLY TO THE EXTENT OF PEAK CREDIT OF RS.5,57,235/- IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY TH E DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2006-07 REND ERED VIDE ITS ORDER DATED 15.02.2013 (SUPRA), WHICH HAS BEEN SUBSEQUENT LY UPHELD BY THE HONBLE CALCUTTA HIGH COURT VIDE ITS ORDER DATED 12 .08.2013 IN ITAT NO. 128 OF 2013, WHEREIN THE PEAK CREDIT THEORY WAS ACC EPTED BY THE TRIBUNAL AND THE ASSESSING OFFICER WAS DIRECTED TO RESTRICT THE ADDITION ON ACCOUNT OF THE TRANSACTIONS REFLECTED IN THE UNDISCLOSED BA NK ACCOUNT OF THE ASSESSEE ONLY TO THE EXTENT OF PEAK CREDIT ON VERIF ICATION. IN THE YEAR UNDER CONSIDERATION, THE MATTER WAS REMANDED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER TO VERIFY SUCH PEAK CREDIT AN D SINCE THE ASSESSING OFFICER ON VERIFICATION HAD WORKED OUT THE PEAK CRE DIT OF RS.5,57,235/-, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE L D. CIT(APPEALS) RESTRICTING THE ADDITION TO SUCH PEAK CREDIT. THE A PPEAL OF THE REVENUE THUS HAS NO MERIT AND THE SAME IS DISMISSED ACCORDI NGLY. I.T.A. NO. 2239/KOL/2013 ASSESSMENT YEAR: 2005-2006 & I.T.A. NO. 2183/KOL/2013 ASSESSMENT YEAR: 2005-2006 PAGE 6 OF 7 7. AS REGARDS THE ISSUE INVOLVED IN THE APPEAL OF T HE ASSESSEE RELATING TO THE ADDITION OF RS.8,85,000/- ON ACCOUNT OF PAYM ENT MADE BY THE ASSESSEE FROM HIS UNDISCLOSED BANK ACCOUNT TOWARDS LAND, IT IS OBSERVED THAT THE PAYMENT TO THAT EXTENT WAS MADE BY THE ASS ESSEE SEPARATELY BY DRAFT FROM HIS UNDISCLOSED BANK ACCOUNT AND THIS PO SITION HAS NOT BEEN DISPUTED BY THE ASSESSEE EITHER BEFORE THE LD. CIT( APPEALS) OR BEFORE US. THE ONLY CONTENTION RAISED ON BEHALF OF THE ASSESSE E BEFORE THE LD. CIT(APPEALS) WAS THAT THE SAID DRAFT WAS MADE ON BE HALF OF OTHERS AND THE SAME DID NOT DENOTE THERE WAS PURCHASE OF LAND. HOWEVER, AS RIGHTLY HELD BY THE LD. CIT(APPEALS) IN THIS REGARD, THE AM OUNT OF RS.8,85,000/- HAD GONE OUT OF THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE AND SINCE THE SAME WAS NOT AVAILABLE TO THE ASSESSEE FOR FURT HER INVESTMENT, IT WAS LIABLE TO BE ADDED SEPARATELY TO THE TOTAL INCOME O F THE ASSESSEE OVER AND ABOVE THE PEAK CREDIT OF RS.5,57,235/- WORKED OUT B Y THE ASSESSING OFFICER. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE ALSO HAS NOT RAISED ANY CONTENTION TO DISPUTE THIS POSITION. WE, THEREFORE, FIND NO MERIT IN THE APPEAL OF THE ASSESSEE AND DIS MISS THE SAME. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE AND TH AT OF THE REVENUE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 3, 2016 . SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 3 RD DAY OF JUNE, 2016 COPIES TO : (1) SHRI RATAN PAL SINGH, 30/31, BELLILIOUS ROAD, GHUSURI, HOWRAH-711 101 (2) INCOME TAX OFFICER, WARD-48(2), KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 I.T.A. NO. 2239/KOL/2013 ASSESSMENT YEAR: 2005-2006 & I.T.A. NO. 2183/KOL/2013 ASSESSMENT YEAR: 2005-2006 PAGE 7 OF 7 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-XXX, KOLK ATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.