ITO, Erode V. N.Saravanan, Erode

ITA 2439/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86265 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-12-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 29-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained cash credit; Peak credit; Additional evidence
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! # $ , % & BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 2439/MDS/2014 ( / ASSESSMENT YEAR: 2010-11) INCOME TAX OFFICER, WARD-II(4), ERODE. VS MR. N.SARAVANAN, F-28, HOUSING UNIT, NARAYANANAVALASU, ERODE-638 011. PAN:CEVPS2541R ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. P.RADHAKRISHNAN, JCIT /RESPONDENT BY : MR. S.SRIDHAR, ADVOCATE /DATE OF HEARING : 24 TH DECEMBER, 2014 /DATE OF PRONOUNCEMENT : 30 TH JANUARY, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBA TORE DATED 04.07.2014 FOR THE ASSESSMENT YEAR 2010-11 AR ISING OUT OF THE ASSESSMENT ORDER PASSED UNDER SECTION 14 3(3) OF THE ACT. THE ONLY ISSUE IN THE APPEAL OF THE REVEN UE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DIREC TING THE ASSESSING OFFICER TO RECOMPUTE THE INCOME BY DELETI NG THE ADDITION OF ` 20,11,710/- MADE TOWARDS UNEXPLAINED CREDIT ON 2 ITA NO.2439/MDS/2014 ACCOUNT OF BANK DEPOSITS AND DIRECTING THE ASSESSIN G OFFICER TO ADOPT PEAK CREDIT OF ` 1,36,163/- AS UNEXPLAINED INCOME. 2. THE ASSESSEE FILED RETURN OF INCOME ADMITTING I NCOME OF ` 1,35,165/-. THE ASSESSMENT WAS COMPLETED UNDER SECT ION 143(3) OF THE ACT DETERMINING THE INCOME AT ` 21,46,875/-. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFI CER MADE ADDITION OF ` 20,11,710/- AS UNEXPLAINED CASH DEPOSIT INTO SAVINGS BANK ACCOUNT BY THE ASSESSEE, AS THE ASSESSEE COULD NOT EXPLAIN SOURCES FOR SUCH CASH DEPOSITS IN TO THE BANK ACCOUNT. ON FURTHER APPEAL, COMMISSIONER OF I NCOME TAX (APPEALS) CONSIDERING THE EVIDENCES PRODUCED BY THE ASSESSEE AND THE SUBMISSIONS THEREON DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION OF ` 20,11,710/- AND CONSIDER ONLY THE AMOUNT OF ` 1,36,163/- BEING PEAK CREDIT AS UNEXPLAINED CASH CREDIT. THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 3. DEPARTMENTAL REPRESENTATIVE REFERRING TO THE ASSESSMENT ORDER SUBMITS THAT ASSESSEE IN SPITE OF GIVING 3 ITA NO.2439/MDS/2014 SEVERAL OPPORTUNITIES DID NOT PRODUCE ANY EVIDENCES FOR THE SOURCE OF DEPOSITS INTO BANK ACCOUNT. THEREFORE DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ASSESSING OFFICER HAS RIGHTLY MADE ADDITION. DEPARTMENTAL REPRESENTAT IVE SUBMITS THAT THE ASSESSEE IS DOING BUSINESS IN TEXT ILES AND INCOME FROM SUCH BUSINESS IS ROUTED IN BANK ACCOUNT . THE ASSESSEE IS STILL INTO BUSINESS AND BUSINESS WAS NO T STOPPED IN THE YEAR 2005. DEPARTMENTAL REPRESENTATIVE FURTH ER SUBMITS THAT ASSESSEE PRODUCED EVIDENCES BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, HE SUBMITS THAT THE MATTER MAY BE RESTORED TO THE ASSE SSING OFFICER TO DECIDE THE ISSUE AFRESH. 4. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE STOPPED THE BUSINESS LONG BACK IN 2005 AND HE IS NO T DOING ANY BUSINESS NOW AND IS ONLY A SALARIED EMPLOYEE. C OUNSEL SUBMITS THAT INFORMATION CALLED FOR BY THE ASSESSIN G OFFICER COULD NOT BE PRODUCED IN THE COURSE OF ASSESSMENT PROCEEDINGS AS THE ADVOCATE OF THE ASSESSEE MR. P. KUMAR COULD NOT FILE THE DETAILS AS HIS FATHER DIED ON 3. 3.2013. COUNSEL SUBMITS THAT ALL THE DETAILS WERE FURNISHED BEFORE THE 4 ITA NO.2439/MDS/2014 COMMISSIONER OF INCOME TAX (APPEALS) INCLUDING BANK STATEMENT AND CASH FLOW STATEMENTS TO SUBSTANTIATE THE BANK DEPOSITS BY THE ASSESSEE. COUNSEL FOR THE ASSESSEE STRONGLY RELIES ON THE ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) IN DELETING THE ADDITION. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. THE COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE BEFOR E HIM AND THE SUBMISSIONS MADE AND ON CONSIDERING THE EVI DENCES FURNISHED BY THE ASSESSEE, THE COMMISSIONER OF INCO ME TAX (APPEALS) DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION AND TO CONSIDER ONLY PEAK CREDIT OBSERVING AS UNDER:- THE ISSUE IN THE GROUNDS OF APPEAL IS AGAINST TH E ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CASH DE POSITS MADE IN THE SAVINGS BANK ACCOUNT WITH ICICI BANK IN ERODE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE DID NOT GIVE ANY EXPLANATION FOR THE DEPOSITS MADE. IN THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT FILE D AN AFFIDAVIT STATING THAT ADVOCATE SHRI P.KUMAR WHO WA S REPRESENTING THE CASE DID NOT FILE THE DETAILS GIVE N TO HIM BEFORE THE ASSESSING OFFICER. THE APPELLANT IN THE AFFIDAVIT FURTHER STATED THAT ADVOCATES FATHER SRI G.PADMANA BAN, C.A PASSED AWAY ON 3.3.2003 AND THE REPRESENTATIVE BEIN G THE ONLY SON HAD TO PERFORM CEREMONIES AND DID NOT FILE THE DETAILS BEFORE THE ASSESSING OFFICER. THE APPELLA NT ALSO SUBMITTED THAT HE WAS INITIALLY DOING TEXTILES BUSI NESS AND BECAUSE OF LOSS STOPPED THE BUSINESS IN 2005. LATER HE HAS STARTED ACTING AS AN INSURANCE AGENT. IN ORDER TO A PPLY FOR A BANK LOAN AND AS PER ADVICE OF HIS FRIENDS, HE HAS STARTED DEPOSITING THE CASH AVAILABLE WITH HIM INTO SB ACCO UNT WHICH 5 ITA NO.2439/MDS/2014 WAS VERY MEAGER. SINCE HE DID NOT HAVE ENOUGH MONEY , HE STARTED WITHDRAWING MONEY SO DEPOSITED EARLIER AND REDEPOSITED THE SAME IN ORDER TO SHOW FREQUENT TRAN SACTIONS IN THE BANK ACCOUNT. I HAD GONE THROUGH THE AFFIDAVIT FILED BY THE APPELLANT AND HIS ADVOCATES SUBMISSION. I HAVE ALSO GONE THR OUGH ICICI BANK ACCOUNT IN WHICH THE CASH AMOUNTS WERE DEPOSITED. SINCE THE DETAILS OF BANK TRANSACTIONS COULD NOT BE EXPLAINED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER TREAT ED THE ENTIRE CASH DEPOSITS AS INCOME. AS SEEN FROM THE BA NK ACCOUNT, THE APPELLANT WAS WITHDRAWING FROM ATM AM OUNTS OF ` 2000/- TO ` 15000/- PER DAY. MAJORITY OF THE WITHDRAWALS WERE ONLY MADE THROUGH ATM AND THE CASH DEPOSITS WE RE ALSO SUBSEQUENTLY MADE. AT EACH TIME THE AMOUNT OF DEPOSITS WERE IN THE RANGE OF ` 10,000/- TO ` 45,000/-. AS SEEN FROM THE FACTS OF THE CASE THE ASSESSEE WAS WITHDRAWING CASH FROM ATM AND IN SUBSEQUENT DAYS DEPOSITING CASH IN HIS BANK ACCOUNT. THE APPELLANT HAS GIVEN DETAILS OF MONTHLY WI THDRAWALS FROM BANK AND THE DEPOSITS OF CASH AND INSURANCE COMMISSION MADE INTO THE BANK. THE MAXIMUM BALANCE IN THE SAID ACCOUNT WAS AN AMOUNT OF ` 1,36,163/- AS ON 3.2.2010. REGARDING THIS DEPOSIT NO PLAUSIBLE EXPL ANATION WAS FURNISHED BY THE APPELLANT. REGARDING THE OTHER CASH DEPOSITS, SOURCE WAS EXPLAINED AS WITHDRAWALS WERE MADE ONE OR TWO DAYS PRIOR TO CASH DEPOSITS.AS SEEN FROM THE BANK ACCOUNT AND ALSO CONSIDERING THE STATUS OF THE ASSE SSEE, IT CANNOT BE STATED THAT ASSESSEE IS DOING ANY BUSINES S WHICH WAS NOT DISCLOSED TO THE DEPARTMENT. THE APPELLANT SEEMS TO BE A SMALL TIME INSURANCE AGENT AND TO SHOW NUMBER OF BANK TRANSACTIONS, SEEMS TO HAVE WITHDRAWN CASH AND DEPO SITED CASH. CONSIDERING THE FACTS OF THE CASE, THE ASSESS ING OFFICER IS DIRECTED TO DELETE ADDITION OF ` 20,11,710/- AND CONSIDER ONLY THE AMOUNT OF ` 1,36,163/- (THE PEAK DEPOSIT ON 3.2.2010) AS UNEXPLAINED CASH CREDIT. THE GROUNDS O F APPEAL ARE PARTLY ALLOWED. 6. ON GOING THROUGH THE ORDER OF THE COMMISSIONER O F INCOME TAX (APPEALS) WE DO NOT FIND ANY GOOD REASON TO 6 ITA NO.2439/MDS/2014 INTERFERE WITH THE DIRECTIONS GIVEN BY THE COMMISSI ONER OF INCOME TAX (APPEALS). THE ASSESSEE FILED ADDITIONAL EVIDENCES AND BY INVOKING RULE 46A OF THE INCOME-T AX RULES THE ADDITIONAL EVIDENCES WERE ADMITTED. THE POWERS OF COMMISSIONER OF INCOME TAX (APPEALS) ARE CO-TERMIN US OF THE ASSESSING OFFICER. THE REVENUE DID NOT OBJECT ASSESSEE FILING ADDITIONAL EVIDENCES BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) . THEREFORE, IN SUCH CIRCUMSTA NCES, WE ARE NOT INCLINED TO REMIT THE MATTER BACK TO THE FI LE OF THE ASSESSING OFFICER. THE GROUNDS RAISED BY THE REVENU E ARE REJECTED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 30 TH DAY OF JANUARY, 2015 AT CHENNAI. SD/- SD/- ( . ) ( ( *+ ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDRA PRASAD ) - / ACCOUNTANT MEMBER * - / JUDICIAL MEMBER * /CHENNAI, / /DATED 30 TH JANUARY, 2015 SOMU 12 32 /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 4 () /CIT(A) 4. 4 /CIT 5. 2 7 /DR 6. /GF .