Sanjay Kumar Ram, Kolkata V. D.C.I.T CC - XIII,Kolkata, Kolkata

ITA 2266/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4987 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 19-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 14-08-2013
• Court: TRIBUNAL
• Assessee Lawyers: K K CHHAPARIA
• Keywords: Unexplained cash credit; Search and seizure; Peak credit; Accommodation entries
• Section: 68; 132

Judgement Text

I.T.A. NO. 2266/KOL./2013 ASSESSMENT YEAR: 2010-2011 PAGE 1 OF 4 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. 2266/KOL/2013 ASSESSMENT YEAR: 2010-2011 SANJAY KUMAR RAM,.................................. ...............................APPELLANT ROOM NO. 514, 5 TH FLOOR, 27, WESTON STREET, KOLKATA-700 001 [PAN : AHEPR 8035 R] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ....................RESPONDENT CENTRAL CIRCLE-XIII, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-700 107 APPEARANCES BY: SHRI K.K. CHHAPARIA, FCA, FOR THE ASSESSEE SHRI AMITABH CHOUDHURY, ADDITIONAL CIT, FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : APRIL 19, 2016 DATE OF PRONOUNCING THE ORDER : APRIL 29, 2016 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-I I, KOLKATA DATED 19.07.2013 AND THE SOLITARY ISSUE ARISING OUT OF TH E SAME RELATES TO THE ADDITION OF RS.19,00,000/- MADE BY THE ASSESSING OF FICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF PEAK CREDIT A PPEARING IN THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE TREATING T HE SAME AS UNEXPLAINED CASH CREDIT. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L. IN THE SEARCH AND SEIZURE ACTION CONDUCTED UNDER SECTION 132 ON 08.12 .2009 IN THE CASES OF SHASHIKANT KHETAN GROUP, UNDISCLOSED BANK ACCOUNT M AINTAINED IN THE I.T.A. NO. 2266/KOL./2013 ASSESSMENT YEAR: 2010-2011 PAGE 2 OF 4 NAME OF THE PROPRIETARY CONCERN OF THE ASSESSEE WIT H STANDARD CHARTERED BANK WAS FOUND. IN THE RETURN OF INCOME FILED THERE AFTER FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE ADMITTED THAT HE WAS ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES IN THE NAME OF HIS PROPRIETARY CONCERN AND THE ENTRIES FOUND RECORDED IN THE UNDISCLOSED BANK ACCOUNT WITH STANDARD CHARTERED BANK WERE RELA TED TO THE SAID ACTIVITY. HE ALSO OFFERED INCOME OF RS.1,14,780/- F OR THE YEAR UNDER CONSIDERATION BEING COMMISSION RECEIVED AT THE RATE OF 0.5% FOR PROVIDING ACCOMMODATION ENTRIES AS REFLECTED IN THE SAID BANK ACCOUNT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS CALLED UPON BY THE ASSESSING OFFICER TO EXPLAIN THE SOURCE OF DEPOSITS FOUND TO BE MADE IN THE UNDISCLOSED BANK ACCOUNT. IN REPLY, IT WAS EXPLAINED BY THE ASSESSEE THAT THE DEPOSITS IN THE UNDISCLOSED B ANK ACCOUNTS WERE INTER-RELATED WITH THE WITHDRAWALS BEING INHERENT T O THE NATURE OF TRANSACTIONS AND, THEREFORE, ADDITION, IF ANY, SHOU LD BE MADE ONLY TO THE EXTENT OF PEAK CREDIT APPEARING IN THE UNDISCLOSED BANK ACCOUNT. THE WORKING OF SUCH PEAK CREDIT WAS ALSO FILED BY THE A SSESSEE SHOWING THE PEAK CREDIT DURING THE YEAR UNDER CONSIDERATION AT RS.1,19,000/-. ALTHOUGH THE ASSESSING OFFICER ACCEPTED THE STAND O F THE ASSESSEE THAT THE ADDITION ON ACCOUNT OF THE TRANSACTIONS APPEARING I N THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE SHOULD BE MADE ON THE BASIS OF PEAK CREDIT, HE DID NOT FIND WORKING MADE BY THE ASSESSEE OF SUC H PEAK CREDIT TO BE CORRECT. HE PROCEEDED TO WORK OUT SUCH PEAK CREDIT HIMSELF AT RS.19,00,000/- AND MADE ADDITION TO THAT EXTENT TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE LD. CIT(APPEALS) UPHELD TH E WORKING OF PEAK CREDIT MADE BY THE ASSESSING OFFICER BUT HELD THAT THE ADDITION ON ACCOUNT OF TRANSACTIONS REFLECTED IN THE UNDISCLOSED BANK A CCOUNT OF THE ASSESSEE HAVING BEEN MADE ON PEAK CREDIT BASIS, NO INCOME TO WARDS COMMISSION AS OFFERED BY THE ASSESSEE AT RS.1,14,780/- COULD BE A SSESSED SEPARATELY. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. I.T.A. NO. 2266/KOL./2013 ASSESSMENT YEAR: 2010-2011 PAGE 3 OF 4 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESESE HAS FURNISHED BEFORE US A SUMMARY OF DAILY DEPOSITS AND WITHDRAWALS REFLECTED IN HIS UNDISCLOSED BANK ACCOUNT AND SUBMI TTED THAT THE PEAK CREDIT OF SUCH DEPOSITS AND WITHDRAWALS BEING RS.5, 75,000/- AS ON 10.10.2009, THE ADDITION MADE BY THE ASSESSING OFFI CER SHOULD BE RESTRICTED TO RS.5,75,000/-. WE ARE UNABLE TO ACCEP T THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. A PERUSAL OF THE RELE VANT TRANSACTIONS REFLECTED IN THE UNDISCLOSED BANK ACCOUNT OF THE AS SESSEE CLEARLY SHOWS THAT THE DEPOSITS THEREIN WERE MADE BY CHEQUES WHIL E THE AMOUNTS WERE WITHDRAWN IN CASH. IT IS THUS NOT A CASE OF ALL WIT HDRAWALS AND DEPOSITS MADE IN CASH FROM THE SAID BANK ACCOUNT SO THAT THE MANNER IN WHICH THE PEAK CREDIT IS WORKED OUT BY THE ASSESSEE AT RS.5,7 5,000/- CAN BE ACCEPTED. IN SUCH A SITUATION WHERE THE DEPOSITS AR E MAINLY MADE IN CHEQUES WHILE WITHDRAWALS ARE MAINLY MADE IN CASH, THE PEAK CREDIT IS REQUIRED TO BE WORKED OUT AT THE MAXIMUM AMOUNT DEP OSITED BY THE ASSESSEE BY WAY OF CHEQUES AND SINCE SUCH DEPOSITS TO THE MAXIMUM EXTENT WERE MADE ON 01.10.2009 AT RS.19,00,000/-, T HE PEAK CREDIT AS WRKED OUT BY THE ASSESSING OFFICER AT RS.19,00,000/ -, IN OUR OPINION, IS ABSOLUTELY CORRECT IN THE FACTS AND CIRCUMSTANCES O F THE CASE. IN THAT VIEW OF THE MATTER, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) CONFIRMING THE ADDITION OF RS.19,00,000/- MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF PEAK CREDIT APPEARING IN THE UNDISCLO SED BANK ACCOUNT OF THE ASSESSEE TREATING THE SAME AS UNEXPLAINED CRED IT UNDER SECTION 68 AND DISMISS THIS APPEAL OF THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 29, 201 6. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 29 TH DAY OF APRIL, 2016 I.T.A. NO. 2266/KOL./2013 ASSESSMENT YEAR: 2010-2011 PAGE 4 OF 4 COPIES TO : (1) SHRI SANJAY KUMAR RAM, C/O. S.K. KHETAN, ROOM NO. 514, 5 TH FLOOR, 27, WESTON STREET, KOLKATA-700 001 (2) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-XIII, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-700 107 (3) COMMISSIONER OF INCOME-TAX, KOLKATA; (4) CIT(APPEALS)-CENTRAL-II, KOLKATA , (4) THE DEPARTMENTAL REPRESENTATIVE (5) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.