S. Pazhaniraja, Puducherry V. ITO, Puducherry

ITA 2249/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4282 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 28-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: T VASUDEVAN
• Keywords: Gift; Peak credit

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC C BENCH, CHENNAI . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.2249/MDS/2016 ( / ASSESSMENT YEAR: 2011-12) SHRI S. PAZHANIRAJA, 108, THIRUVALLUVAR SALAI, PILLAITHOTTAM, PUDUCHERRY 605 013. VS THE INCOME TAX OFFICER, WARD I(2), PUDUCHERRY PAN: AAAPI3930P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI T. VASUDEVAN, ADVOCATE /RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL. CIT /DATE OF HEARING : 08.06.2017 ! /DATE OF PRONOUNCEMENT : 14.06.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS)- PUDUCHERRY, CHENNAI DATED 20.05.2016 IN ITA NO.581/ CIT(A)- PDY/2013-14 FOR THE ASSESSMENT YEAR 2011-12 PASSED U/S.250(6) R.W.S.143(3) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS A PPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE LD.AO, WHO HAD MADE ADD ITION ON 2 ITA NO.2249/MDS/2016 ACCOUNT OF UNEXPLAINED CASH DEPOSITS MADE IN UCO BA NK FOR RS.10,59,497/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL EARNING INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES FILED HIS RETURN OF INCOME ELECTRONI CALLY FOR THE ASSESSMENT YEAR 2011-12 ON 14.07.2012, ADMITTING TO TAL INCOME OF RS.2,34,280/-. INITIALLY THE RETURN WAS PROCESS U/S.143(1) OF THE ACT. SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTI NY AND FINALLY ORDER U/S.143(3) OF THE ACT WAS PASSED ON 10.10.201 3, WHEREIN THE LD.AO MADE ADDITION OF RS.10,59,497/- TOWARDS U NEXPLAINED CASH CREDITS U/S.68 OF THE ACT ON THE BASIS OF PEAK CREDIT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAD MADE SE VERAL CASH DEPOSITS IN UCO BANK, PONDICHERRY AGGREGATING TO RS .27,61,200/- IT WAS EXPLAINED BY THE ASSESSEE THAT THE SOURCE OF THE AGGREGATE BANK DEPOSITS OF RS.27,61,200/- WAS OUT OF GIFT FRO M HIS FATHER, MOTHER AND SISTER OF RS.1,00,000/- EACH, RS.1,83,50 0/- INCOME EARNED DURING THE YEAR, RS.1,73,000/- FROM THE ACCU MULATED INCOME OF PREVIOUS YEARS, RS.6,00,000/- FROM HIS FA THERS HUF 3 ITA NO.2249/MDS/2016 ETC., AND WITHDRAWALS FROM BANK. THE LD.AO REJECTED THE CONTENTION OF THE ASSESSEE BECAUSE THERE WAS NO DOC UMENTARY EVIDENCE OTHER THAN THE CONFIRMATION LETTER FROM TH E RELATIVES OF THE ASSESSEE FOR CONFERRING SUCH GIFTS AND THEREBY ADDED RS.10,59,497/- TO THE INCOME OF THE ASSESSEE BY AP PLYING THE PEAK CREDIT METHOD. ON APPEAL, THE LD.CIT(A) CONFI RMED THE ORDER OF THE LD.AO BY AGREEING WITH HIS VIEW. 5. BEFORE US THE LD.AR REITERATED HIS SUBMISSION MA DE BEFORE THE REVENUE AUTHORITIES ON EARLIER OCCASION AND PLE ADED THAT THE ASSESSEE HAD FURNISHED THE DETAILS FOR THE SOURCE O F BANK DEPOSIT, HOWEVER THE LD.AO AS WELL AS THE LD.CIT(A) HAD REJE CTED THE EXPLANATION OFFERED BY THE ASSESSEE AND WITHOUT EXA MINING THE RELATIVES OF THE ASSESSEE ADDED THE BANK DEPOSIT TO THE INCOME OF THE ASSESSEE COMPUTED ON PEAK CREDIT METHOD WHICH I S UNJUSTIFIABLE. IT WAS THEREFORE PLEADED THAT THE A DDITION MADE IN THE HANDS OF THE ASSESSEE MAY BE DELETED. THE LD.D R ON THE OTHER HAND RELIED ON THE ORDER OF THE REVENUE AUTHO RITIES AND REQUESTED FOR SUSTAINING THE SAME. 4 ITA NO.2249/MDS/2016 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT THE LD.AO DISREGARDING THE CONFIRMATI ON LETTER FURNISHED BY THE ASSESSEES RELATIVES AND WITHOUT E XAMINING THEM MADE THE ADDITION OF RS.10,59,497/- TO THE INCOME O F THE ASSESSEE MADE ADDITION BASED ON PEEK CREDIT METHOD AND THE LD.CIT(A) HAS ALSO CONFIRMED THE SAME. I DO NOT FI ND MERIT ON THE ACTION OF THE REVENUE AUTHORITIES IN THIS ISSUE. T HE LD.AO OUGHT TO HAVE EXAMINED THE RELATIVES OF THE ASSESSEE BEFO RE ARRIVING AT SUCH CONCLUSION. IT IS PERTINENT TO MENTION THAT E VERY INDIVIDUAL WILL HAVE SOME ACCUMULATED CASH BALANCE WITH THEM O UT OF THEIR SAVINGS. IN THE CASE OF THE ASSESSEE, HE HAS CLAIME D THAT APPROXIMATELY RS.3 TO 4 LAKHS WAS RECEIVED IN AGGRE GATE FROM HIS RELATIVES SUCH AS FATHER, MOTHER AND SISTER AND THA T CANNOT BE DISBELIEVED. FURTHER, AT LEAST AN AMOUNT OF RS.3 TO 4 LAKHS ACCUMULATED BY HIS FATHERS HUF ALSO CANNOT BE DISB ELIEVED. SIMILARLY, THE ASSESSEES OWN ACCUMULATION OUT OF H IS OWN SAVINGS OF RS.3 TO 4 LAKHS CAN ALSO NOT BE DISBELIEVED. TH IS EXPLAINS THE SOURCE OF THE ASSESSEES BANK DEPOSIT OF RS.10,59,4 97/- ON PEAK CREDIT BASIS. THEREFORE THE ADDITION MADE BY THE L D.AO WHICH IS FURTHER SUSTAINED BY THE LD.CIT(A) IS NOT JUSTIFIAB LE. FOR THESE 5 ITA NO.2249/MDS/2016 REASONS, I HEREBY DIRECT THE LD.AO TO DELETE THE AD DITION MADE FOR RS.10,59,497/- IN THE HANDS OF THE ASSESSEE BASED O N PEEK CREDIT METHOD. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON THE 14 TH JUNE, 2017. SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER '# /CHENNAI, $% /DATED 14 TH JUNE, 2017 JR % '( )( /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. , ( )/CIT(A) 4. , /CIT 5. (-. / /DR 6. .0 /GF