Sanjeev Kumar Munka, Patna V. ACIT, Central Circle-1, Patna

ITA 249/PAT/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1770 (ITAT-PATNA)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 19-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Search and seizure; Principle of natural justice; Peak credit; Corroborative evidences
• Section: 143(3); 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH, PATNA , . . , BEFORE SHRI CHANDRA MOHAN GARG, J M AND SHRI L.P. SAHU, AM ./ ITA NO. 2 49 /PAT /20 18 ( / ASSESSMENT YEAR :201 5 - 201 6 ) SHRI SANJEEV KUMAR MUNKA , FLAT NO.ID, DURGA VIHAR APARTMENT, S.P.VERMA ROAD, PATNA VS. ACIT, CENTRAL CIRCLE - PATNA - 800001 ./ PAN NO : A BJPM 3 722 B ( APPELLANT ) .. ( RESPONDENT ) /AS SESSEE B Y : SHRI NISHANT MAITIN, ADV /REVENUE BY : SHRI AJAY KUMAR , DR / DATE OF HEARING : 18 /0 6 /2019 / DATE OF PRONOUNCEMENT : 19 / 06 /2019 / O R D E R PER BENCH : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3, PATNA, DATED 27.07.2018 FOR THE ASSESSMENT YEAR 2015 - 2016 ON THE FOLLOWING GROUNDS OF APPEAL: - 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) ERRED IN PASSING THE ORDER DISMISSING THE APPEAL OF THE ASSESSEE WITHOUT AFFORDING REASONABLE OPPORTUNITY TO EXPLAIN THE CASE. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) ERRED IN UPHOLDING THE ADDITION OF THE LD. AO OF RS.8,516/ - AS UNEXPLAINED CASH DEPOSIT, DISREGARDING PEAK CREDIT THEORY ADOPTED BY THE APPELLANT WHEN THE SAME HAS DULY BEEN ACCEPTED BY VARIOUS COURTS AND TRIBUNALS AND ADDITION OF TH E SAME RESULTS IN DOUBLE TAXATION. FURTHER THE SAME VIEW WAS ALSO APPRECIATED AND ACCEPTED BY THE LD. AO IN THE PREVIOUS ASSESSMENT YEARS LIKE AY 2G09 - 10 WHERE THE APPELLANT HAD ITA NO . 2 49 / PAT /201 8 2 DISCLOSED RS.2,74,449.45/ - AS PEAK BALANCE ON HIS OWN ACCOUNT IN CENTRAL BANK O F INDIA, PATNA (A/C.NO.1320872200). 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) ERRED IN UPHOLDING THE ADDITION OF THE LD. AO OF RS. 15,293/ - AS UNEXPLAINED CASH DEPOSIT, DISREGARDING PEAK CREDIT THEORY ADOPTED BY THE APPELL ANT WHEN THE SAME HAS DULY BEEN ACCEPTED BY VARIOUS COURTS AND TRIBUNALS AND ADDITION OF THE SAME RESULTS IN DOUBLE TAXATION. FURTHER THE SAME VIEW WAS ALSO APPRECIATED AND ACCEPTED BY THE LD. AO IN THE PREVIOUS ASSESSMENT YEARS LIKE AY 2011 - 12 WHERE THE A PPELLANT HAD DISCLOSED RS. 1,001 A AS PEAK BALANCE ON BANK ACCOUNT OF HIS SON ROHIT MUNKA IN SOUTH INDIAN BANK, BANGALORE (A/C. NO.0396053000018750). 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) ERRED IN UPHOLDING THE ADDITIO N OF THE LD. AO OF RS.42,935/ - AS UNEXPLAINED CASH DEPOSIT, DISREGARDING PEAK CREDIT THEORY ADOPTED BY THE APPELLANT WHEN THE SAME HAS DULY BEEN ACCEPTED BY VARIOUS COURTS AND TRIBUNALS AND ADDITION OF THE SAME RESULTS IN DOUBLE TAXATION. FURTHER THE SAME VIEW WAS ALSO APPRECIATED AND ACCEPTED BY THE LD. AO IN THE PREVIOUS ASSESSMENT YEARS LIKE AY 2014 - 15 WHERE THE APPELLANT HAD DISCLOSED RS. 1,14,571.14/ - AS PEAK BALANCE ON HIS OWN ACCOUNT IN IDBI BANK, PATNA (A/C.NO.078110000081254). 5. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) HAD TAKEN DIFFERENT VIEWS IN DIFFERENT YEARS ON ACCOUNT OF PEAK CREDIT THEORY AND THE SAME IS TOTALLY UNJUST AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 6. FOR THAT ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE, ALL THE DOCUMENTS ALONG WITH SUPPORTING EVIDENCES REGARDING THE CASH OF RS.3,56,780/ - FOUND AT THE RESIDENTIAL PREMISES OF THE APPELLANT WAS PRODUCED BEFORE THE LD. CIT(A) BUT THE SAME WAS NOT CONSIDERED AND OVERLOOKED BY THE LD. CIT(A ) WHILE PASSING THE APPELLATE ORDER. 7. FOR THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY GROUNDS OF APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE INCOME - TAX ACT, 1961 WAS CONDUCTED ON 07/08/2014 AT THE RESIDENTIAL AND BUSINESS PREMISES OF GUPTA NUTRITION S GROUP OF CASES. SHRI GUPTA FAMILY IS MAINLY ENGAGED IN THE MANUFACTURING AND SALE OF \ ATTA, MAIDA, SUJJI, BRAN ETC. AND HAS BEEN THE PIONEER OF ESTABLISHING FLOUR MILLS IN BIHAR. M/S DA NAPUR FLOUR MILLS PVT. LT D. AND M/S GUPTA NU TRITION PVT. L TD. ARE THE FLAGSHIP ITA NO . 2 49 / PAT /201 8 3 CONCERNS OF THIS GROUP, WHICH ARE ENGAGED IN MANUFACTURING AND TRADING OF ATTA, MAIDA AND SUJJI. 'KRISHNA BHOG' AND 'RAJ BHOG' ARE FAMOUS BRAND OF WHEAT PRODUCTS IN BIHAR WHICH A RE MANUFACTURED BY THE COMPANIES OF THIS GROUP. IN THE SEARCH PROCEEDING, THE FOLLOWING THREE BANK ACCOUNTS WERE FOUND UNEARTHED WHICH WERE NOT DISCLOSED IN THE RETURN OF INCOME : - SI. NO NAME OF BANK ACCOUNT NO. 1. CENTRAL BANK OF INDIA, PATNA 1320872200 2. IDBI BANK, PATNA 078110000081254 3. SOUTH INDIAN BANK, BANGALORE 0396053000018750 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND SOME CREDITS IN ABOVE NOTED BANK ACCOUNTS, WHICH WAS DETECTED DURING THE SEARCH AND SEIZURE PROCEEDINGS AND THE CASH OF RS.3,56,780/ - WAS ALSO FOUND FROM THE RESIDENCE OF ASSESSEE - SHRI SAN JEEV KUMAR MUNKA AT FLAT NO.ID, DURGA VIHAR APARTMENT, SP VERMA ROAD, PATNA. THIS CASH WAS CLAIMED BY THE ASSESSEE BELONGS TO M/S RIVER VALLEY FLOUR MILLS PRIVATE LIMITED IN WHICH THE ASSESSEE IS A DIRECTOR. HOWEVER, THE ASSESSEE COULD NOT ESTABLISH HIS CL AIM WITH CREDIBLE EVIDENCE IN SUPPORT OF THE OWNERSHIP OF CASH AND THE SAME WAS ADDED BY THE AO TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDINGLY, THE AO COMPLETED THE ASSESSMENT U/S. 143(3) OF THE ACT DETERMINING TOTAL INCOME AT RS. 15,59,900/ - VIDE ORDER DATED 09.12.2016. 4. FEELING AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE APPEALED BEFORE THE CIT(A) AND THE LD.CIT(A) AFTER CONSIDERING ALL THE SUBMISSIONS MADE BY THE ASSESSEE AND RELYING ON SOME CASE LAWS; HE DECIDED THE GROUND NO.1 ITA NO . 2 49 / PAT /201 8 4 BY FOLLOWING THE ASSESSMENT YEAR 2012 - 2013 IN RESPECT OF PEAK CREDIT AND DISMISSED THE APPEAL OF THE ASSESSEE AND OTHER GROUNDS WERE ALSO DISMISSED. 5. AGGRIEVED FURTHER THE ORDER OF THE CIT(A), THE ASSESSEE PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. LD. AR SUBMITTED THAT IN REGARD TO ADDITION OF PEAK CREDIT OF RS.8,516/ - , RS. 15,293/ - AND RS.42,935/ - , THE ID. AO HAS WRONGLY SELECTED THESE FIGURES. HE FURTHER SUBMITTED THAT THE AO HAS NOT CONSIDERED THE ASSESSEE'S CONTENTION REGARDING PEAK CREDIT ON A CCOUNT OF UNDISCLOSED BANK ACCOUNT. HE HAS CONSIDERED THE HIGHEST PEAK CREDIT. IT WAS ALSO THE CONTENTION OF ID. AR THAT BOTH THE DEBIT AND CREDIT SHOULD BE CONSIDERED. FURTHER IN RESPECT OF CASH FOUND OF RS.3,56,780/ - , HE SUBMITTED THAT IT BELONGS TO M/S RIVER VALLEY FLOUR MILL PRIVATE LIMITED, BUT IT HAS WRONGLY BEEN ADDED IN THE HANDS OF THE ASSESSEE. 7. ON THE OTHER HAND, ID. DR RELIED ON THE ORDERS OF LOWER AUTHORITIES AND SUBMITTED THAT IN RESPECT OF PEAK CREDIT, THE ID. CIT(A) HAS DECIDED THIS ISSUE ON THE BASIS OF ASSESSMENT YEAR 2012 - 2013 IN ASSESSEE'S OWN CASE WHEREIN THE ID. CIT(A) HAS RELIED ON MANY CASE LAWS AND ACCORDINGLY HE DISMISSED THE APPEAL OF THE ASSESSEE. THEREFORE, SAME RATIO WILL BE APPLICABLE FOR THE IMPUGNED ASSESSMENT YEAR. F URTHER IN RESPECT OF CASH FOUND DURING THE SEARCH OF RS.3,56,780/ - , THE ASSESSEE WAS UNABLE TO PRODUCE CREDIBLE EVIDENCE REGARDING THE OWNERSHIP OF THE ABOVE CASH THAT IT BELONGS TO M/S RIVER VALLEY FLOUR MILL PRIVATE LIMITED. THEREFORE, THE CIT(A) IS JUST IFIED IN CONFIRMING THE ACTION OF AO. ITA NO . 2 49 / PAT /201 8 5 8 . AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIALS AVAILABLE ON RECORD AS WELL AS ORDERS OF AUTHORITIES BELOW, WE NOTICE THAT THE ASSESSEE HAD NOT DISCLOSED ABOVE THREE ACCOUNTS WHICH WAS UNE ARTHED IN SEARCH PROCEEDINGS. A SIMILAR ISSUE WAS INVOLVED REGARDING ADDITION OF PEAK CREDITS IN THE ASSESSMENT YEAR 2012 - 2013 ALSO WHICH HAS BEEN DECIDED BY THE CIT(A). WHILE DECIDING THE PEAK CREDIT ISSUE, THE ID. CIT(A) HAS FOLLOWED HIS OWN DECISION FOR THE ASSESSMENT YEAR 2012 - 2013 IN RESPECT OF ASSESSEE'S CASE AND HAS DISMISSED THE APPEAL OF THE ASSESSEE. WE HAVE GONE THROUGH THE FINDINGS RECORDED BY THE CIT(A) FOR THE ASSESSMENT YEAR 2012 - 2013, WHEREIN THE CIT(A) OBSERVED THAT THE PEAK CREDIT OF EACH ASSESSMENT YEAR HAS TO BE ARRIVED AT IN ORDER TO BRING THE TRUE PROFIT TO TAX AND REJECTED THE CONTENTION OF ASSESSEE WITH REGARD TO SET OFF THE PEAK CREDIT OF EARLIER ASSESSMENT YEARS AGAINST THE PEAK CREDIT OF SUBSEQUENT ASSESSMENT YEAR. THE FACTS AND CI RCUMSTANCES OF THE ASSESSMENT YEAR 2012 - 2013, BEING SIMILAR TO THE FACTS OF THE IMPUGNED ASSESSMENT YEAR UNDER CONSIDERATION I.E. A.Y.2015 - 2016, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF ID.CIT(A) AND ACCORDINGLY, WE DISMISS THIS GROUND OF APPEAL OF T HE ASSESSEE. 9. FURTHER, WITH REGARD TO THE CASH FOUND DURING THE SEARCH PROCEEDINGS AT THE RESIDENTIAL PREMISES OF ASSESSEE OF RS.3,56,780/ - , THE ASSESSEE WAS UNABLE TO SATISFY TO THE LOWER AUTHORITIES THAT IT BELONGS TO M/S RIVER VALLEY FLOUR MILL PRIVAT E LIMITED. IN THIS REGARD THE RELEVANT OBSERVATIONS OF THE ID. CIT(A) READS AS UNDER : - '5.6 I HAVE PERUSED THE FINDINGS OF THE AO AND THE SUBMISSION O F THE APPELLANT THE APPELLANT DURING THE COURSE OF ITA NO . 2 49 / PAT /201 8 6 APPEAL PROCEEDINGS STATED THAT THE CASH OF RS.3,56,780/ - FOUND AT THE RESIDENTIAL PREMISES OF THE APPELLANT BELONG TO M/S. RIVER VALLEY FLOUR MILLS PRIVATE LTD. IT WAS FURTHER STATED BY THE APPELLANT THAT, HE HAS REQUESTED THE AO VIDE LETTER DATED 12.01.2018 TO A DJUST THE SEIZED CASH AGAINST THE OUTSTANDING DEMAND OF M/S. RIVER VALLEY FLOUR MILLS PRIVATE LTD FOR A.Y.2014 - 15. ACCORDINGLY THE APPELLANT CONTENTED THAT NO ADDITION ON THIS COUNT CAN BE MADE IN THE APPELLANT'S HAND. DURING THE COURSE OF ASSESSMENT PROCE EDINGS THE APPELLANT HAS NOT BROUGHT ANY MATERIAL ON RECORD BY WAY OF CASH BOOK TO SUGGEST THAT THE SEIZED CASH BELONG TO M/S. RIVER VALLEY FLOUR MILLS PRIVATE LTD AND THE SAME WAS DULY ACCOUNTED AND OFFERED FOR TAX IN THE HANDS OF THE COMPANY. FURTHER, EV EN DURING THE COURSE OF APPELLATE PROCEEDINGS NO MATERIAL EVIDENCE IS BROUGHT ON RECORD. THE ONUS IS ON THE APPELLANT TO PROVE THAT THE CASH SEIZED AT HIS RESIDENCE BELONGS TO THE COMPANY. IT MAY BE DUE TO THE RECOVERY PROCEEDINGS INITIATED AGAINST THE COM PANY BY THE DEPARTMENT THAT THE APPELLANT MAY HAVE WRITTEN A LETTER DATED 12/1/2018 TO THE AO TO ADJUST THE SEIZED CASH LYING IN THE PD A/C. AGAINST THE OUTSTANDING DEMAND OF THE COMPANY. IT IS IMPORTANT TO NOTE THAT, MERE FILING OF A LETTER BEFORE THE AO TO ADJUST THE SEIZED CASH AGAINST THE OUTSTANDING DEMAND OF THE COMPANY ACTS AS AN ESTOPPEL AGAINST THE DEPARTMENT TO PRESUME THAT THE SEIZED CASH BELONGS TO THE COMPANY AND NOT THE APPELLANT. IN VIEW OF THESE FINDINGS, THE ACTION AO IN MAKING AN ADDITION OF RS.3,56,780/ - IN THE HANDS OF THE APPELLANT IS HEREBY UPHELD.' 10. FROM THE ABOVE ORDER OF CIT(A), WE FIND THAT THE ASSESSEE WAS UNABLE TO PROVE THAT THE DISPUTED AMOUNT HAS DULY BEEN RECORDED AND REFLECTED IN THE BOOKS OF ACCOUNT OF RIVER VALLEY FLOUR MILL PRIVATE LIMITED. FURTHER, A LETTER FILED BY THE ASSESSEE WITH ACIT, PATNA, PLACED IN PAPER BOOK AT PAGE NO.5, DOES NOT FAVOUR THE ASSESSEE TO DEVIATE FROM THE FINDINGS OF THE AUTHORITIES BELOW. IN VIEW OF THE ABOVE, WE DO NOT SEE ANY GOOD REASON TO IN TERFERE IN THE FINDINGS OF THE CIT(A). ACCORDINGLY, WE UPHOLD THE SAME AND DISMISS THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. ITA NO . 2 49 / PAT /201 8 7 1 1 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 19 /06/2019. SD/ - ( C.M.GARG ) S D/ - ( L.P.SAHU ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PATNA ; DATED 19/06 /2019 PRAKASH KUMAR MISHRA , SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, PATNA 1. / THE APPELLANT - . SHRI SANJEEV KUMAR MUNKA , FLAT NO.ID, DURGA VIHAR APARTMENT, S.P.VERMA ROAD, PATNA 2. / THE RESPONDENT - ACIT, CENTRAL CIRCLE - PATNA - 800001 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, PATNA 6. / GUARD FILE. //TRUE COPY//