Shri Pareshkumar Dalsukhbhai Patel, Gandhinagar V. The Income tax Officer,Ward-3, Gandhinagar

ITA 2244/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94694 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 06-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained cash credit; Unexplained investment; Principle of natural justice; Peak credit
• Section: 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO: 2244/AHD/2011 (ASSESSMENT YEAR: 2006-07) SHRI PARESHKUMAR DALSUKHBHAI PATEL, PLOT NO. 256/A/4, CH TYPE, SECTOR 29, GANDHINAGAR- 382029 V/S INCOME TAX OFFICER, WARD- 3, GANDHINAGAR (APPELLANT) (RESPONDENT) PAN: AAPPT0319Q APPELLANT BY : SHRI S.N. DIVETIA, AR RESPONDENT BY : SHRI DINESH SINGH, SR. D.R. ( )/ ORDER DATE OF HEARING : 04-11-20 15 DATE OF PRONOUNCEMENT : 17 -11-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A), GANDHINAGAR DATED 30.06.2011 FOR A.Y. 2006-07. ITA NO 2244/ AHD/2011 . A.Y. 2006- 07 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVING INCOM E FROM SALARY AND INCOME FROM OTHER SOURCES. ASSESSEE FILED HIS RETURN OF IN COME FOR A.Y. 2006-07 ON 24.08.2007 DECLARING TAXABLE INCOME OF RS. 1,53,498 /-. SUBSEQUENTLY A.O RECEIVED INFORMATION THAT ASSESSEE HAD DEPOSITED AG GREGATE CASH OF RS. 22,19,500/- IN HIS HDFC BANK ACCOUNT DURING ACCOUNT ING YEAR 05-06 AND ACCORDINGLY NOTICE U/S. 148 DATED 05.04.2010 WAS IS SUED AND SERVED UPON THE ASSESSEE. THEREAFTER ASSESSMENT WAS FRAMED U/S. 143 (3) R.W.S. 147 VIDE ORDER DATED 27.12.2010 AND THE TOTAL INCOME WAS DET ERMINED AT RS.22,72,930/-. AGGRIEVED BY THE ORDER OF A.O., ASS ESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO BY A CONSOLIDATED ORDER FOR A .Y. 06-07 TO 08-09 DATED 30.06.2011 GRANTED PARTIAL RELIEF TO THE ASSE SSEE. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), ASSESSEE IS NOW IN A PPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUND:- 1.1 THE ORDER PASSED U/S.250 ON 30.06.2011 FOR A.Y.2006 -07 BY CIT(A)GNR, ABAD, UPHOLDING THE ADDITION TO THE EXTENT OF RS. 15,69,3 00 AS UNEXPLAINED INVESTMENT U/S. 69A IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRI NCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR O N FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE EVIDENCE PRODUCED AND EXPLANATION OFFERED BY THE APPELLANT WITH REGARD TO THE IMPUGNED ADDITION. 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION TO THE EXTENT OF RS. 15,69,300 BEING PEAK CREDIT IN BA NK ACCOUNTS AS UNEXPLAINED INVESTMENT U/S. 69A. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE ADDITION TO THE EXTENT OF RS . 15,69,300 BEING PEAK CREDIT IN BANK ACCOUNTS AS UNEXPLAINED INVESTMENT U/S. 69A. ITA NO 2244/ AHD/2011 . A.Y. 2006- 07 3 3.1 THE ID. CIT(A) HAS ERRED IN REJECTING THE EXPLA NATION OF THE APPELLANT WITH REGARD TO THE CASH DEPOSITS MADE IN THE BANK ACCOUNT, THOUGH NECESSARY EVIDENCE WAS PRODUCED BEFORE HIM. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE ID. CIT(A) OUGHT NOT TO HAVE REJECTED THE EXPLANATION OF THE APPELLANT WITH REGA RD TO THE IMPUGNED CASH DEPOSIT IN THE BANK. 4.1 WITHOUT PREJUDICE TO ABOVE, THE ID. CIT(A) HAS ERRED IN WORKING OUT PEAK CREDIT AT RS. 15,69,300 . 4. BEFORE US, LD. A.R. SUBMITTED THAT THERE WAS DELAY OF ONE DAY IN FILING THE APPEAL AND HE HAS FILED THE AFFIDAVIT OF THE ASSESS EE EXPLAINING THE REASON FOR DELAY. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE WITH RESPECT TO DELAY IN FILING OF APPEAL WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 5. BEFORE US, LD. A.R AT THE OUTSET SUBMITTED THAT TH OUGH ASSESSEE HAS RAISED VARIOUS GROUNDS BUT THE ONLY ISSUE THAT REQUIRES AD JUDICATION IS WITH RESPECT TO ADDITION OF RS. 15,69,300/- U/S. 69A OF THE ACT. 6. A.O NOTICED THAT ASSESSEE HAD DEPOSITED CASH OF RS. 22,19,500/- IN SAVING BANK ACCOUNT MAINTAINED WITH HDFC BANK. THE ASSESSE E WAS ASKED TO FURNISH DETAILS AND EVIDENCES AND EXPLAIN THE SOURC E OF CASH DEPOSITS. BEFORE A.O AS FAR AS CASH DEPOSITS OF RS. 10,50,000/- IS C ONCERNED, IT WAS STATED TO BE PART PAYMENT RECEIPT ON SALE OF AGRICULTURAL LAN D AND THE BALANCE DEPOSITS OF RS. 14,69,500/- WAS STATED TO BE WITHDRAWAL OF T HE CASH DEPOSITED EARLIER DURING THE YEAR. THE SUBMISSION OF THE ASSESSEE WIT H RESPECT TO THE PART PAYMENT ON ACCOUNT OF SALE OF AGRICULTURAL LAND WAS NOT FOUND ACCEPTABLE TO THE A.O IN VIEW OF THE FACT THAT THE COPY OF FORM N O. 7/12 REVEALED THE ITA NO 2244/ AHD/2011 . A.Y. 2006- 07 4 NAME OF OCCUPIER TO BE ASSESSEES FATHER AND IN ONE FORM NO. 7/12 FOR A.Y. 08-09, THE NAME OF ASSESSEES FATHER WERE SHOWN AS FARMER AND THE CROP WAS SHOWN AS RICE WHICH ACCORDING TO THE A.O INDICATED THAT THE LAND WHICH WAS CLAIMED TO HAVE BEEN SOLD WAS NOT IN FACT SOLD UP T O THE DATE OF ISSUE OF FORM NO. 7/12 AND THAT ASSESSEES FATHER WAS STILL IN POSSESSION OF THE LAND. AS FAR AS EXPLANATION OF THE ASSESSEE WITH RESPECT TO THE CASH DEPOSITS OF 14,69,500/- TO BE OUT OF THE CASH WITHDRAWALS MADE EARLIER IS CONCERNED, A.O WAS OF THE VIEW THAT THE STATEMENT PREPARED ON THE BASIS OF PEAK WORKING COULD NOT BE ACCEPTED BECAUSE THE CLAIM OF CASH REC EIPTS OF RS. 10,50,000/- TOWARDS PART PAYMENT ON SALE OF LAND WAS HELD AS NO N GENUINE. HE ACCORDINGLY, AFTER GIVING THE CREDIT OF THE AMOUNT RECEIVED FROM FATHER, MADE ADDITION OF RS. 12,49,142/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO UPHELD THE ORDER OF A.O BY HOLDING AS UNDER:- 5.1 I HAVE GONE THROUGH THE WRITTEN SUBMISSIONS AND THE ASSESSMENT ORDER. THE EXPLANATION OFFERED BY THE APPELLANT AS TO THE MAJO R SOURCE OF CASH DEPOSITS MADE IN THE BANK ACCOUNT WITH HDFC BANK LTD. IS THAT IT WAS THE SALE CONSIDERATION OF ANCESTRAL AGRICULTURAL LAND .THE APPELLANT HAD FAILED TO PROD UCE COPY OF SALE DEED, COPY OF BANKHAT ETC. I AGREE WITH THE AO THAT THE CONSENT LETTERS S TATING SIMPLY THAT IT WAS DECIDED TO PURCHASE' WERE NOT RELIABLE. THE SAID LAND WAS NOT SOLD EVEN TILL DATE OF ISSUE OF FORM 7/12 OR EVEN TILL DATE (I.E. OF THESE APPELLATE PRO CEEDINGS). IT IS NOT ACCEPTABLE EVEN AS PER NORMAL PRACTICE AND PROBABILITY OF HUMAN BEHAVIOR T HAT MONEYS ARE GIVEN IN ADVANCE WITHOUT ANY DOCUMENT BEING SIGNED. FURTHER, EVEN AF TER 5 YEARS NEITHER THE AGREEMENT AS CLAIMED HAS BEEN COMPLETED BY COMPLETING EITHER THE REGISTRATION OF LAND OR THE MONEY HAS BEEN RETURNED BACK. I FULLY ENDORSE THE AO'S DE CISION THAT THE WHOLE STORY WAS CONCOCTED JUST TO TRY AND EXPLAIN THE UNEXPLAINED D EPOSITS IN THE BANK ACCOUNT. FURTHER, IN THE APPEAL PROCEEDINGS, THE ASSESSEE H AS CLAIMED THAT THE AO HAS ACCEPTED THE STORY PARTLY. IT IS NOT TRUE AT ALL. C REDIT OF RS.70,358/- RECEIVED FROM FATHER HAS BEEN GIVEN AND NO OTHER SOURCE HAS BEEN ACCEPTE D. THE AO HAS GIVEN CREDIT TO THE ITA NO 2244/ AHD/2011 . A.Y. 2006- 07 5 FACT THAT THE LAND WAS IN THE NAME OF FATHER WHO WA S HAVING AGRICULTURAL ACTIVITIES AND INCOME. THE ASSESSEE HAS EVEN TRIED TO EXPLAIN CERTAIN SOU RCES AS PAST SAVINGS AND AS LOANS RECEIVED FROM FATHER-IN-LAW ETC. THE STATEMEN T OF THE ASSESSEE WAS RECORDED AND HE WAS NOT ABLE TO TELL WHEN AND BY WHAT MODE THE SO C ALLED LOAN WAS RECEIVED. HE HAS NOT BEEN ABLE TO GIVE HOW WHEN HE HAD SMALL DECLARED IN COME AND A FAMILY TO SUPPORT, HE COULD HAVE LARGE SAVINGS FROM EXPLAINED SOURCES. I UPHOLD THE DECISION OF THE AO THAT THE SOURCES OF CASH DEPOSITS IN THE BANK ACCOUNT ARE NO T EXPLAINED. 5.2 HOWEVER, THE SAID BANK ACCOUNTS CONTAINS BOTH HUGE CASH DEPOSITS AND CASH WITHDRAWALS. THE ASSESSEE'S PLEA THAT PEAK CREDIT O F CASH DEPOSITED SHOULD BE CONSIDERED APPEARS REASONABLE. BEFORE PROCEEDING FURTHER, IT IS TO BE MEN TIONED THAT THE BANK ACCOUNT HAS GOT WITHDRAWALS AND DEPOSITS THROUGH CHEQUES ALSO. THE AO HAS CORRECTLY TREATED THEM AS EXPLAINED BECAUSE THESE WERE TAKEN AS ADVANCES TO C ERTAIN PARTIES AND AMOUNTS RECEIVED BACK FROM THEM. AS FIRST ADVANCES WERE GIVEN AND TH EN RECEIVED BACK, THERE WAS NO QUESTION OF UNEXPLAINED CREDITS. THE ASSESSEE HAD FIRST GIVEN A WORKING OF PEAK CAS H CREDIT WHICH WAS FOUND NOT CORRECT. HE WAS ASKED TO INCORPORATE ALL BANK ACCOU NTS TOGETHER TO WORK OUT THE PEAK. FURTHER, IT COULD NOT BE ACCEPTED THAT ALL WITHDRAW ALS WERE RE-ROUTED INTO THE BANK ACCOUNT. THE ASSESSEE WAS ASKED TO GIVE REVISED WOR KING FOR ALL THE 3 YEARS AFTER ACCOUNTING FOR A REASONABLE AMOUNT SPENT ON PERSONA L EXPENSES. THE REVISED WORKING HAS BEEN GIVEN AND IS ANNEXED WITH THE ORDER AS ANN EXURE-1. THE WORKING HAS BEEN GIVEN BY TAKING RS.8,000/- P.M. AS PERSONAL EXPENSES OUT OF THE WITHDRAWALS FROM THE BANK ACCOUNT. THE ESTIMATE IS ACCEPTED AS REASONABLE. THE PEAK OF CASH REQUIRED I.E. THE UNEXPLAINED CAS H IN EACH OF THE ASSESSMENT YEARS IS GIVEN AS UNDER: ASSTT. YR (I) DATE (II) PEAK CREDIT AMOUNT (III) ADDITION REQUIRED TO BE MADE U/S. 68 (IV) REMARKS (V) 2006-07 21/12/2005 RS. 15,69,300 RS.15,69,300 - ITA NO 2244/ AHD/2011 . A.Y. 2006- 07 6 2007-08 07/12/2006 RS.9,23,740 NIL AS THE PEAK OF EARLIER YEAR COVERS IT. 2008-09 14/02/2008 RS.15,09,276 NIL AS THE PEAK OF AY 06-07 COVERS IT. THEREFORE, THE ADDITION OF RS.15,69,300/- IS MADE AND CON FIRMED U/S.69A (INSTEAD OF SEC.68, WRONGLY MENTIONED BY AO) FOR AY 2006-07 AS BEING UNEXPLAINED MONIES DEPOSITED IN THE BANK ACCOUNT. ALTHOUGH, THE CREDIT S ARE NOT EXPLAINED BUT FOR COMPUTATION PURPOSE, NO ADDITION ON THIS ISSUE IS R EQUIRED FOR A.Y. 2007-08 AND A.Y 2008-09 AS THE PEAK IN THOSE YEARS IS COVERED IN TH E PEAK OF UNEXPLAINED MONEY ADDED IN AY 2006-07. THE AO IS DIRECTED TO COMPUTE THE RELIE F ACCORDINGLY. ALTHOUGH, PRIMA FACIE THE WORKING APPEARS TO BE CORRECT, THE AO SHALL CHE CK IT FOR COMPUTATIONAL ACCURACY WHILE GIVING THE APPEAL EFFECT. 7. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), ASS ESSEE IS NOW IN APPEAL BEFORE US. 8. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O AND LD. CIT(A) AND FURTHER SUBMITTED THAT THERE IS MISTAKE IN PEAK WORKING. HE POINTED TO PAGE 118 TO 124 OF THE PAPER BOOK AND SU BMITTED THAT THE AGGREGATE PEAK TO BE CONSIDERED ACCORDING TO THE WO RKING GIVEN THEREIN. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O A ND LD. CIT(A). AS FAR AS THE CONTENTION OF THE AGGREGATE WORKING OF PEAK, HE SUBMITTED THAT LD. CIT(A) HAS DIRECTED THE A.O TO COMPUTE THE RELIEF A S PER THE DIRECTIONS GIVEN BY HIM AND AFTER VERIFICATION OF THE COMPUTATIONAL ACCURACY. HE THEREFORE SUBMITTED THAT THERE IS NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). ITA NO 2244/ AHD/2011 . A.Y. 2006- 07 7 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO ADDITI ON OF CASH DEPOSITS MADE IN THE BANK ACCOUNT. WE FIND THAT LD. CIT(A) HAS NOT A CCEPTED THE SUBMISSION OF THE ASSESSEE OF CASH DEPOSITS TO BE OUT OF THE A DVANCE MONEY ON SALE OF LAND BECAUSE HE HAS NOTED THAT THE LAND WAS NOT SOL D TILL THE TIME OF APPELLATE PROCEEDINGS AND THERE WAS NOTHING ON RECORD TO DEMONSTRATE THE REGISTRATION OF LAND OR OF MONEY HAVING RETURNED BACK. WITH RESPECT TO THE ADDITION BASED ON THE PEAK THEORY, WE FIND THAT LD. CIT(A) HAS UPH ELD THE ADDITION IN A.Y. 06-07 BUT HAS GIVEN THE CREDIT OF THE ADDITION OF P EAK CREDIT IN A.Y. 07-08 & 08-09. BEFORE US, LD. A.R. HAS NOT POINTED OUT ANY FALLACY OR ERROR IN THE ORDER OF LD. CIT(A).WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THE GROUND OF ASSESSEE IS DISMI SSED. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 17 - 11 - 2015. SD/- SD/- (RAJPAL YADAV) (ANIL CHATURVEDI) 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,A HMEDABAD