Kochi Cherikal Mohanan, CHENNAI V. ITO, CHENNAI

ITA 2354/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9633 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 31-12-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI JCIT
• Assessee Lawyers: R VISWANATHAN C A
• Keywords: Unexplained cash credit; Peak credit

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , ! . ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.2354 /MDS./2015 ( / ASSESSMENT YEAR :2011-12) MR.KOCHI CHERIKAL MOHANAN , 3/55,VETERAN LANE, PALLAVARAM, CHENNAI-43. VS. INCOME TAX OFFICER-III(1), COMPANY WARD-III(1), CHENNAI-34. PAN AAIPM 4795 N ( %& / APPELLANT ) ( '(%& / RESPONDENT ) / APPELLANT BY : MR.R.VISWANATHAN,C.A / RESPONDENT BY : MR.A.B.KOLI,JCIT, D.R ! / DATE OF HEARING : 10.03.2016 '# ! /DATE OF PRONOUNCEMENT : 06.04.2016 ) / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-11, CH ENNAI DATED 28.10.2015 PERTAINING TO THE ASSESSMENT YEAR 2011-1 2 . ITA NO.2354/MDS/2015 2 2. THE GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO NOT CONSIDERING THE PEAK CREDIT BY THE REVENUE AUTHORITIES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND MANAGING DIRECTOR OF M/S.WE TWO ENGINEERING PVT . LTD. THE ASSESSEE FILED E-RETURN ON 04.08.2011 ADMITTING HIS INCOME OF ` 11,62,000/- FOR ASSESSMENT YEAR 2011-12. SUBSEQUEN TLY THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE ASSESS MENT U/S.143(3) OF THE ACT WAS COMPLETED ON 24.03.2014 BY MAKING FO LLOWING ADDITIONS:- UNEXPLAINED CASH DEPOSITS IN BANK 35,62,499 INCOME FROM BUSINESS/PROFESSION 15,24,200 UNEXPLAINED CREDIT BY RTGS 10,00,000 AGAINST THIS ADDITION, THE ASSESSEE WAS IN APPEAL B EFORE THE LD.CIT(A). ON APPEAL, THE LD.CIT(A) CONFIRMED THE ORDER OF THE LD. ASSESSING OFFICER. 4. BEFORE US, LD.A.R SUBMITTED THAT THE ASSESSEE I S HAVING BANK ACCOUNTS WITH CATHOLIC SYRIAN BANK, PALLAVARAM BRAN CH, STATE BANK OF HYDERABAD, THOUSAND LIGHTS BRANCH AND BANK OF IN DIA CHROMEPET BRANCH AND THE ASSESSEE HAS WITHDRAWN CASH FROM ONE BANK AND ITA NO.2354/MDS/2015 3 DEPOSITED TO OTHER BANKS AND THE ONLY PEAK CREDIT T O BE CONSIDERED AFTER CONSOLIDATING ALL THE ACCOUNTS. 5. ON THE OTHER HAND, LD.D.R SUBMITTED THAT FROM T HE CASH FLOW STATEMENT FILED BY THE ASSESSEE HIMSELF, IT IS NOTI CED THAT THE ASSESSEE HAD CASH AT HAND FROM EARLIER WITHDRAWALS WHEN HE MAKES FURTHER WITHDRAWALS FROM ONE BANK ACCOUNT WHICH IS STATED TO BE THE SOURCE FOR DEPOSIT IN ANOTHER. THE ASSESSEE HAS NO T FURNISHED ANY REASON REGARDING NEED FOR TAKING SUCH CASH LOANS AS STATED OR THE COMMERCIAL EXIGENCIES AS IN THE CASE OF A BUSINESSM AN. THE ASSESSEE HAS ALSO NOT SHOWN THE APPLICATION OF THES E FUNDS. FURTHER, LD.D.R RELIED ON THE FOLLOWING DECISIONS:- I) BHAIYALAL SHYAM BEHARI VS. CIT REPORTED IN [2 005] 276 ITR 38(ALLAHABAD). II) CIT VS. VIJAY AGRICULTURAL INDUSTRIES REPORT ED IN [2007] 294 ITR 610(ALLAHABAD) 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HEREIN WANTS TO CONSIDER CASH WITHDRAWAL FROM ONE BANK WITH CASH DEPOSIT IN ANOTHER BANK TO DETER MINE THE PEAK CREDIT. IN OUR OPINION, THE PRINCIPLE OF PEAK CRED IT IS NOT APPLICABLE IN A CASE WHERE THE DEPOSITS REMAIN UNEXPLAINED U/S.68 OF THE ACT. MORE SO, IT CANNOT APPLY IN A CASE OF DEPOSITS IN D IFFERENT BANK ITA NO.2354/MDS/2015 4 ACCOUNTS WHERE THERE WERE MANY DAYS OF GAP IN WITHD RAWING AND DEPOSITING TO ANOTHER BANK. THE PLEA OF THE ASSESS EE IS NOT TENABLE TO HOLD THAT ASSESSEE HAS KEPT THE CASH WITHDRAWN F ROM ONE BANK FOR SUCH A LONG PERIOD, SOMETIMES MORE THAN 34 DAYS TO DEPOSIT INTO ANOTHER BANK. IT IS NOT BELIEVABLE AS SUCH THE BEN EFIT OF PEAK CREDIT CANNOT BE GIVEN TO THE ASSESSEE. ACCORDINGLY, THE A PPEAL OF ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMIS SED. ORDER PRONOUNCED ON WEDNESDAY, THE 6 TH OF APRIL,2016 AT CHENNAI. SD/- SD/- ( . ) (G.PAVAN KUMAR) ( ( $% & ) ) ' CHANDRA POOJARI () JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 6 TH APRIL,2016. K S SUNDARAM. *+)),-).- /COPY TO: ) 1. /APPELLANT 2. /RESPONDENT 3. ) /)'( /CIT(A) 4. ) / /CIT 5. -01 )2 /DR 6. 13)4 /GF