Sh. Gurmail Singh, Moga V. The Income Tax Officer, Moga

ITA 252/ASR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9557 (ITAT-AMRITSAR)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Peak credit; Corroborative evidences
• Section: 234B; 68

Judgement Text

ITA NO.252/ASR/2016 A.Y. 2009-10 2 PEAK THEORY. THE BASIC IDEA BEHIND THE PEAK CREDIT THEORY IS TO AVOID DOUBLE ADDITION AND TO BRING ONLY THE ACTU AL INCOME OF THE ASSESSEE TO SUFFER TAX. 4. THAT THE LD. CIT(A) HAS FAILED TO CONSIDER THAT THE APPELLANT DEPOSITED THE CASH IN THE BANK AGAINST TH E SELF WITHDRAWAL FROM THE BANK ACCOUNT. THE ASSESSEE IS H AVING SUFFICIENT OPENING BANK BALANCE OF RS 5,11,556/- IN THE BANK ACCOUNT. 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) MA DE THE ADDITION MERELY ON ESTIMATE BASIS AND THE LD. A SSESSING OFFICER WITHOUT BRINGING ON RECORD ANY MATERIAL TO SHOW THAT THE ASSESSEE HAS EARNED ANY INCOME IN EXCESS OF THE AMOUNT DISCLOSED IN THE RETURN. 6. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CHARGING INTEREST U/S 234A VIDE HIS DE MAND NOTICE. IN THE ASSESSMENT ORDER THE LD. ASSESSING O FFICER HAS NOT MENTIONED ABOUT THE CHARGE OF INTEREST UNDER SE CTION 234A OF THE INCOME TAX ACT. 1961. 7. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CHARGING THE INTEREST UNDER SECTION 23 4A & 234B OF THE INCOME TAX ACT, 1961 VIDE HIS DEMAND NO TICE. 2. THE FOLLOWING ADDITIONAL GROUNDS HAVE ALSO BEEN TAKEN: (I) THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT, 196 1 AND THEREBY MAKING ADDITION OF RS.7,39,750/-. (II) THAT THE AUTHORITIES BELOW DID NOT APPRECIATE THAT THE PROVISIONS OF SECTION 68 ARE NOT AT ALL APPLICABLE IN THIS CASE, AS THE ASSESSEE ADMITTEDLY IS NOT MAINTAINING ANY B OOKS OF ACCOUNTS. AS SUCH, THE PROVISIONS OF SECTION 68 ARE NOT AT ALL APPLICABLE AND THE VERY BASIS ON WHICH THE ADDITION WAS MADE IS LIABLE TO BE DELETED. HENCE, THIS GROUND M AY BE CONSIDERED AND ALLOWED. 3. THE ADDITIONAL GROUNDS ARE ADMITTED, BEING LEGAL GROUNDS, NOT REQUIRING ANY FRESH FACTS TO BE GONE INTO. ITA NO.252/ASR/2016 A.Y. 2009-10 4 ACKNOWLEDGEMENT OF THE SAID NOTICE. HAD THE RETURN FILED VOLUNTARILY ON 27-07-2012 AS CLAIMED BY THE ASSESSE E MAY BE TREATED AS A RETURN FILED WITHIN TIME IS NOT CORREC T AS THE SAME HAS BEEN FILED BELATED RETURN THAT HAS BEEN PROVIDE D IN THE SECTION 139(4) OF THE I.T.ACT,1961. KEEPING IN VIEW THE ABOVE MENTIONED FACTS IT IS CRYSTAL CLEAR THAT THE ASSESS EE COULD NOT ESTABLISH THE SOURCE OF CASH DEPOSITS BY PRODUCING CORROBORATIVE EVIDENCES OF SALES & PURCHASE, SO, I HEREBY MAKE AN ADDITION OF RS.14,63,000/- I.E. CASH DEPOSI TS OF RS.14,98,000/- LESS PROFIT SHOWN AT RS.34,912/- IN THE RETURN OF INCOME ON ACCOUNT OF CASH DEPOSITS MADE IN HIS S AVING BANK ACCOUNT NO4410 MAINTAINED WITH THE UNION BANK OF INDIA, DALHOUSIE ROAD, PATHANKOT DURING THE RELEVAN T FINANCIAL YEAR UNDER SECTION 68 OF THE INCOME-TAX ACT 1961, B Y TREATING THE AFORESAID CASH DEPOSITS AS UNEXPLAINED CASH DEP OSIT. I AM THUS SATISFIED THAT THE ASSESSEE HAS CONCEALED HIS TRUE PARTICULARS OF HIS INCOME, PENALTY PROCEEDINGS UNDE R SECTION 271(1) (C) OF THE INCOME-TAX ACT 1961 ARE HEREBY I NITIATED SEPARATELY FOR CONCEALING HIS TRUE PARTICULARS OF H IS INCOME BY ISSUING PENALTY NOTICE UNDER THE AFORESAID SECTION READ WITH SECTION 274 OF THE INCOME-TAX ACT 1961. SIMILARLY, FINDINGS HAS BEEN RECORDED BY ASSESSING OFFICER IN ALL THE YEARS. SINCE THE FACT THAT ASSESSEE WAS NOT MAINTAI NING BOOKS OF ACCOUNTS AND THAT ASSESSING OFFICER HAD MADE ADDITI ONS U/S 68 HAS BEEN ESTABLISHED, THEREFORE, WE HAVE TO DECIDED AS TO WHETHER UNDER THESE CIRCUMSTANCES THE ADDITION COULD HAVE BEEN MA DE OR NOT. THE HONBLE ITAT, DELHI BENCH, IN ITA NO.2256/DELH/2009 IN ITS ORDER DATED 13.05.2011 UNDER SIMILAR FACTS AND CIRCUMSTAN CES HAS DISMISSED THE APPEAL FILED BY REVENUE BY HOLDING AS UNDER: 9. COMING TO THE MERITS OF THE CASE, UNDISPUTEDLY, THE ADDITION OF RS.913000 WAS BASED ONLY ON SOME ENTRIE S IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE WAS FOUN D NOT TO HAVE MAINTAINED ANY BOOKS OF ACCOUNT. NOW, AS CORRE CTLY OBSERVED BY THE CIT(A), THE PASSBOOK/BANK STATEMENT SUPPLIED BY THE BANK TO THE ASSESSEE DOES NOT AMOUN T TO A BOOK OF ACCOUNT OF THE ASSESSEE. IT BEING ONLY A CO PY OF CUSTOMERS' ACCOUNT IN THE BOOKS MAINTAINED BY THE B ANK, A BANK DOES NOT ACT AS AN AGENT OF ITS CUSTOMER. IT A LSO CANNOT BE SAID THAT BANKER MAINTAINS A PASSBOOK UND ER THE INSTRUCTIONS OF THE ACCOUNT HOLDER. THE PROVISIONS OF SECTION 68 OF THE ACT ARE, THEREFORE, NOT ATTRACTED WHERE T HE ASSESSEE DOES NOT MAINTAIN BOOKS OF ACCOUNT. THE CI T(A), IN THIS REGARD, HAS RIGHTLY PLACED RELIANCE ON 'CIT VS . BHAICHAND ITA NO.252/ASR/2016 A.Y. 2009-10 6 9. NOW, IN THE PRESENT CASE, IT REMAINS UNDISPUTED THAT THE. ASSESSEE HAS NOT MAINTAINED ANY BOOKS DURING THE YE AR. THUS, THE PROVISIONS OF SECTION 68 OF THE ACT ARE N OT AT ALL ATTRACTED AND THEY HAVE BEEN WRONGLY APPLIED BY THE AUTHORITIES BELOW. THIS POSITION HAS BEEN DULY RECO GNIZED IN SH. OM PARKASH SHARMA, FARIDABAD (SUPRA). NO CONT RARY DECISION HAS BEEN CITED BEFORE THIS BENCH. 10. IN VIEW OF THE ABOVE, THE GRIEVANCE OF THE A SSESSEE BY WAY OF THE ADDITIONAL GROUNDS TAKEN IS JUSTIFIED AN D IS ACCEPTED AS SUCH. DUE TO SUCH ACCEPTANCE, SINCE THE PROVISIONS OF SECTION 68 OF THE ACT ARE THEMSELVES HELD TO BE NOT APPLICABLE AND MIS-APPLIED, NOTHING FURTHER REM AINS TO BE ADJUDICATED. 11. ACCORDINGLY, THE ORDER UNDER APPEAL IS REVERSED . THE ADDITION IS CANCELLED. FOLLOWING THE ABOVE JUDICIAL PRECEDENTS WE ALLOW TH E ADDITIONAL GROUNDS OF APPEALS RAISED BY ASSESSEE IN HIS FAVOUR AND HOLD THAT ADDITION U/S 68 WERE NOT WARRANTED AND THEREFORE, A PPEALS FILED BY ASSESSEE IN ITA NO.445,446,447 &449 ARE ALLOWED WHE REAS ITA NO.448 IS DISMISSED AS NOT PRESSED. 5. THE LD. DR HAS SOUGHT TO PLACE RELIANCE ON ACTI ON FOR WELFARE & AWAKENING IN RURAL ENVIRONMENT VS. DCIT, 130 TAXMA N 82 (AP). ACCORDING TO THE LD. DR, AS PER THIS DECISION, MER E MENTIONING OF A WRONG PROVISION ITSELF WOULD NOT BE FATAL TO THE ASSESSMENT PROCEEDINGS, WHEN THE AO WAS JUSTIFIED IN HIS ACTION UNDER SOME OTHER PROVISIONS OF THE ACT. 6. HOWEVER, IT IS SEEN THAT ALL THROUGH, THIS HAS N EVER BEEN THE CASE OF THE DEPARTMENT. THE LD. CIT(A), WHILE DISMISSING TH E ASSESSEES APPEAL, HELD AS FOLLOWS: ITA NO.252/ASR/2016 A.Y. 2009-10 8 9. THUS, FOLLOWING SH. SANJEEV KUMAR (SUPRA) AN D SH. YADWINDER SINGH (SUPRA), THE GRIEVANCE OF THE ASSESSEE BY W AY OF ADDITIONAL GROUNDS TAKEN, IS ACCEPTED. 10. IN VIEW OF THE ABOVE, THE ADDITIONAL GROUNDS HA VING BEEN ACCEPTED, NOTHING ELSE SURVIVES FOR ADJUDICATION. 11. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/09/20 16. SD/- (A.D. JAIN) JUDICIAL MEMBER /SKR/ DATED: 15/09/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. GURMAIL SINGH S/O SH. BALWANT SING H, VPO FATEHGARH KPORTANA, MOGA. 2. THE ITO WARD-1, MOGA, 3. THE CIT(A), BATHINDA 4. THE CIT, BATHINDA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.