Bijoy Kesh, Burdwan V. I.T.O.,Ward-1(2), Burdwan

ITA 227/KOL/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5867 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 20-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Peak credit
• Section: 147; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA Before SRI MANISH BORAD, ACCOUNTANT MEMBER & SRI SONJOY SARMA, JUDICIAL MEMBER I.T.A. No.: 227/Kol/2020 Assessment Year: 2012-13 Bijoy Kesh...............................................................Appellant [PAN: AXDPK 6282 A] Vs. ITO, Ward-1(2), Burdwan......................................Respondent Appearances by: Sh. D.B. Thakur, A/R, appeared on behalf of the Assessee. Smt. Nibedita Gupta, Addl. CIT, D/R, appeared on behalf of the Revenue. Date of concluding the hearing : July 12 th , 2022 Date of pronouncing the order : July 19 th , 2022 ORDER Per Manish Borad, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2012-13 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals)-Burdwan [in short ld. “CIT(A)”] dated 01.08.2019 which is arising out of the assessment order framed u/s 144/147 of the Act dated 01.12.2017. 2. The assessee is in appeal before this Tribunal raising the following grounds: I.T.A. No.: 227/Kol/2020 Assessment Year: 2012-13 Bijoy Kesh. Page 2 of 5 “1. For that, on the facts, the Ld. CIT(A) erred in confirming the determination of income of Rs. 11,69,050/= made by the I.T.O. by applying the G.P. rate of 8% on the entire deposit made by the assessee for Rs. 1,45,34,029/=. The said determination of income was made on the basis of surmises and conjectures and without applying the peak credit theory. The said determination of income is absolutely unwarranted and stands to no reason at all. 2. For that, on the facts, both the Authorities below erred both in points of law and on facts. 3. For that the appellant craves leave to take further and/or additional grounds at the time or before hearing of this appeal petition if necessary.” 3. Brief facts of the case as culled out from the records are that the assessee is an individual engaged in the business. On the basis of information from the Investigation Wing that there are number of transactions of cash deposits and withdrawals during the year, case of the assessee reopened under Section 147 of the Act. There was no compliance on the part of the assessee. Learned Assessing Officer, based on the details that a sum of Rs. 1,45,34,029/- has been deposited in various bank accounts held by the assessee, made an addition of Rs. 11,62,721/- applying net profit rate of 8%. Addition for interest income at Rs. 6,329/- earned by the assessee from savings bank account was also added. Income assessed at Rs. 11,69,050/-. 4. Aggrieved, the assessee preferred appeal before learned CIT(A) raising the ground that learned Assessing Officer ought to have applied the addition of peak balance in the said bank accounts. However, learned CIT(A) was not satisfied with the submissions as the assessee failed to discharge the primary onus I.T.A. No.: 227/Kol/2020 Assessment Year: 2012-13 Bijoy Kesh. Page 3 of 5 about all the pertinent facts concerning the credit entries in the accounts. 5. Aggrieved, the assessee is in appeal before this Tribunal. Learned Counsel for the assessee reiterated the submissions made before learned CIT(A) and, further, stated that the assessee is in the business of trading of rice and rice bran and net profit margin is very low and application of 8% net profit rate is very exorbitant. 6. Per contra ld. D/R vehemently argued supporting the orders of both the lower authorities. 7. We have heard rival contentions and perused the records placed before us. The sole issue raised in this appeal by the assessee is that learned CIT(A) erred in confirming the addition of Rs. 11,69,050/- made by the learned Assessing Officer applying the gross profit rate of 8% on the entire deposits made by the assessee at Rs. 1,45,34,029/-. We notice that the assessee failed to appear before the learned Assessing Officer and no details were filed. It remains an uncontroverted fact that there were various deposits and withdrawals in the bank accounts held by the assessee. Learned Assessing Officer has taken note of the credit entries and applied the net profit rate of 8% on the entire deposits of Rs. 1,45,34,029/-. We also note that before the learned CIT(A) the assessee requested for the addition to be sustained only to the extent of peak credit. However, the assessee failed to get any relief. 8. Before us, the assessee has not filed any details of the said bank account and the calculation of peak credit during the year. However, looking to the fact that the assessee is in the business of I.T.A. No.: 227/Kol/2020 Assessment Year: 2012-13 Bijoy Kesh. Page 4 of 5 trading rice, Paddy and rice bran there have been consistent withdrawals during the year as observed by the Assessing Officer and looking to the other facts and circumstances of the case, we, in the interest of justice and being fair to both the parties, are of the considered view that applying the net profit rate of 5% on the said deposits of Rs. 1,45,34,029/-will meet the end of justice. On applying the net profit rate of 5% on the deposits of Rs. 1,45,34,029/-net profit will be Rs. 7,26,701/-. We, therefore, sustain the addition of Rs. 7,26,701/-as against the addition of Rs. 11,62,721/- made by the Assessing Officer. Therefore, the assessee gets relief of Rs. 4,36,020/- and the addition is sustained at Rs. 7,26,701/-. Thus, ground no. 1 raised by the assessee is partly allowed. 9. Ground nos. 2 & 3 are general in nature which need no adjudication. 10. In the result, the appeal filed by the assessee is partly allowed. Kolkata, the 19 th July, 2022. Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 19.07.2022 Bidhan (P.S.) I.T.A. No.: 227/Kol/2020 Assessment Year: 2012-13 Bijoy Kesh. Page 5 of 5 Copy of the order forwarded to: 1. Bijoy Kesh, Vill.-Asindagram, P.O.-Barabelagon, Burdwan- 743 141. 2. ITO, Ward-1(2), Burdwan. 3. CIT(A)-Burdwan. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata