J PACHIAPPAN, ARKONAM V. ITO WARD 3 , VELLORE

ITA 2684/CHNY/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6556 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 08-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J PAVITRA KUMAR J
• Assessee Lawyers: SALAI VARUN ISAI AZHAGAN
• Keywords: Business income; Peak credit; Set aside
• Section: 69; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI . . . , ! , % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ ITA NOS.2684, 2685,2686 & 2687 /CHNY/2017 & & /ASSESSMENT YEARS: 2009-10,2010-11,2011-12 & 2012-1 3 MR.J.PACHAIAPPAN , 15, SAKTHI VINAYAKAR KOIL STREET, THAKKOLAM-631 151. VELLORE DIST. VS. THE INCOME TAX OFFICER, BUSINESS WARD-(3), VELLORE. [ PAN: AIXPP 0325 L ] ( ) /APPELLANT) ( *+) /RESPONDENT) ) , / APPELLANT BY : MR.SALAI VARUN ISAI AZHAGAN, ADVOCATE *+) , /RESPONDENT BY : MR.J.PAVITRA KUMAR, J.C.I.T, D.R , /DATE OF HEARING : 30.09.2019 , /DATE OF PRONOUNCEMENT : 21.10.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : ALL THESE APPEALS OF THE ASSESSEE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF THE CIT(A) FOR THE ASSESSMENT YEARS 2009-10 TO 2012-13. SINCE COMMON ISSUE ARISES FOR CONSIDERATIO N IN ALL THE APPEALS, WE HEARD THEM TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. THERE WAS A DELAY OF 152 DAYS IN FILING OF EACH APPEALS BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR C ONDONATION OF DELAY. WE ITA NOS.2684 TO 2687 /CHNY/2017 :- 2 -: HAVE HEARD THE LD. REPRESENTATIVE AND THE LD. DR. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN T HE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEA L. 3. MR.SALAI VARUN ISAI AZHAGAN, THE LEARNED COUNSE L FOR THE ASSESSEE SUBMITTED THAT THERE WAS A SURVEY IN THE ASSESSEES BUSINESS PREMISES ON 17.09.2013. THE LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF HIRING LORRI ES, AND THE HIRING CHARGES ARE DEPOSITED CONTINUOUSLY IN THE BANK ACCO UNT. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE CAS H DEPOSIT OF RS.38,59,434/- WAS FROM HIRING CHARGES. APART FROM LORRY HIRING CHARGES, THE ASSESSEE WAS ALSO RECEIVING INCOME FROM BRICK W ORKS AND AGRICULTURAL ACTIVITIES. THE ASSESSEE CLAIMED BEFORE THE ASSESSI NG OFFICER THAT IF AT ALL ANY DOUBT REGARDING SOURCE OF DEPOSIT IN THE BANK A CCOUNT, ONLY PEAK CREDIT SHALL BE TAKEN FOR ASSESSMENT. PLACING RELIA NCE IN THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR S 2003-04 TO 2005-06 IN ITA NOS.1812,1813 & 1846/MDS./2015 DATED 17.08.2 016, THE LD.AR SUBMITTED THAT ON IDENTICAL CIRCUMSTANCES, THIS TRI BUNAL REMITTED BACK THE MATTER TO THE FILE OF ASSESSING OFFICER WITH A DIRE CTION TO TREAT ONLY PEAK CREDIT AS BUSINESS INCOME OF ASSESSEE. THEREFORE, T HE ISSUES RAISED IN THESE APPEALS MAY BE REMITTED BACK TO THE FILE OF A SSESSING OFFICER. 4. THE LD.DR, MR.J.PAVITRA KUMAR, FAIRLY SUBMITTED THAT FOR THE ASSESSMENT YEARS 2003-04 TO 2005-06, IDENTICAL ISSU E WAS REMITTED BACK TO THE FILE ASSESSING OFFICER FOR RE-EXAMINATION. T HEREFORE, WITH VERY SAME DIRECTION, THE MATTER MAY BE REMITTED BACK TO THE F ILE OF ASSESSING OFFICER. ITA NOS.2684 TO 2687 /CHNY/2017 :- 3 -: FOR THE ASSESSMENT YEAR 2012-13, THE ASSESSEE HAS T AKEN A GROUND WITH REGARD TO PURCHASE OF CAR, IN ADDITION TO CASH DEPO SITS. SIMILARLY, FOR THE ASSESSMENT YEAR 2009-10, THE ASSESSEE HAS TAKEN ONE MORE GROUND WITH REGARD TO PURCHASE OF LORRY. SINCE THE MAIN ISSUE I S REMITTED BACK TO THE FILE OF ASSESSING OFFICER, ALL THE ISSUES RAISED IN THESE APPEALS MAY ALSO BE REMITTED BACK TO THE FILE OF ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ON IDENTICAL CIRCUMSTANCES, THIS TRIBUNAL IN THE CASE OF ASSESSE E FOR ASSESSMENT YEAR 2003-04 HAS EXAMINED THE MATTER AND REMITTED BACK T HE MATTER TO THE FILE OF ASSESSING OFFICER FOR RECONSIDERATION. IN FACT, THIS TRIBUNAL HAS OBSERVED AT PARA 5 & 6 OF ITS ORDER DATED17.08.2016 AS FOLLO WS:- 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL, ENGAGED IN TRANSPORT BUSINESS, LIQUOR B USINESS IN PARTNERSHIP WITH OTHERS AND ALSO EARNING AGRICULTUR AL INCOME. THIS IS THE SECOND ROUND OF APPEAL FOR THE ASSESSMENT YE AR 2003-04 AFTER BEING REMITTED BACK BY THE TRIBUNAL VIDE ORDE R DATED 29.02.2012, AND FOR THE ASSESSMENT YEAR 2004-05 THE LEARNED ASSESSING OFFICER HAD PASSED AN EX-PARTE ORDER UNDE R SECTION 144 R.W.S. 147 WHILE AS FOR THE ASSESSMENT YEAR 2005-06 THE LEARNED ASSESSING OFFICER HAS PASSED ORDER UNDER SECTION 14 3(3) R.W.S. 147 OF THE ACT. ASSESSMENT YEAR 2003-04:- GROUND :ADDITION OF PEAK CREDIT AMOUNTING TO `16,66 ,799/-:- 6.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, I T WAS OBSERVED BY THE LEARNED ASSESSING OFFICER THAT THE ASSESSEE HAD PEAK CREDIT OF RS.16,66,799/- IN HIS SAVINGS BANK A CCOUNT FURNISHED BY HIM. SINCE THE SOURCE OF THE SAME WAS NOT EXPLAINED BY THE ASSESSEE, THE LEARNED ASSESSING OFFICER MADE ADDITION OF THE SAME INVOKING THE PROVISION OF SECTION 69 OF TH E ACT. SINCE NO EXPLANATION WAS OFFERED EVEN BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), HE CONFIRMED THE ORDER OF THE LEARNED ASSESSING OFFICER. ITA NOS.2684 TO 2687 /CHNY/2017 :- 4 -: 6.2 BEFORE US, THE LEARNED ASSESSING OFFICER SUBMIT TED THAT SINCE THE ASSESSEE HAS ESTIMATED THE INCOME UNDER P RESUMPTIVE PROVISIONS UNDER SECTION 44AE OF THE ACT ONLY SUCH INCOME CAN BE TAXED AND THEREFORE PEAK CREDIT CANNOT BE BROUGHT U NDER THE AMBIT OF TAX. 6.3 THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND OPPOSED TO THE SUBMISSIONS OF THE LEARNED AUTH ORIZED REPRESENTATIVE AND RELIED ON THE ORDERS OF THE REVE NUE. 6.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM TH E ORDERS OF THE REVENUE, IT IS APPARENT THAT THE ASSESSEE IN HIS BA NK ACCOUNT HAD MADE DEPOSITS ON VARIOUS DATES AND THE PEAK CREDIT ON ANY GIVEN DATE WAS RS.16,65,735/-. SINCE THE ASSESSEE COULD N OT FURNISH ANY EXPLANATION FOR THE SOURCE OF THE AFORESAID AMO UNT OBVIOUSLY THE PEAK CREDIT CONCEPT WILL SURVIVE AND ACCORDINGL Y THE SAME HAS TO BE TAXED WHEN SUCH AMOUNT IS HIGHER THAN THE BUS INESS INCOME OFFERED BY THE ASSESSEE UNDER SECTION 44AE OF THE A CT. HOWEVER, THE INCOME ADMITTED BY THE ASSESSEE UNDER SECTION 4 4AE OF THE ACT HAS TO BE EXCLUDED IF THE PEAK CREDIT IS HIGHER THAN THE BUSINESS INCOME OFFERED UNDER SECTION 44AE OF THE A CT AND IF SUCH DECLARED BUSINESS INCOME FORMS PART AND PARCEL OF T HE PEAK CREDIT. THEREFORE, WE HEREBY DIRECT THE LEARNED ASS ESSING OFFICER TO TREAT ONLY THE PEAK CREDIT OF RS.16,66,799/- AS THE BUSINESS INCOME OF THE ASSESSEE AND EXCLUDE THE BUSINESS INC OME OFFERED BY THE ASSESSEE UNDER SECTION 44AE OF THE ACT IF SU CH BUSINESS INCOME IS LESSER THAN RS.16,66,799/- AND FORMS PART AND PARCEL OF THE PEAK CREDIT. BUT IF THE BUSINESS INCOME OFFERE D BY THE ASSESSEE UNDER SECTION 44AE OF THE ACT IS HIGHER TH AN RS.16,66,799/- THEN ONLY SUCH HIGHER AMOUNT DECLARE D BY THE ASSESSEE UNDER SECTION 44AE OF THE ACT IS TO BE TRE ATED AS BUSINESS INCOME OF THE ASSESSEE AND PEAK CREDIT OF RS.16,66,799/- SHOULD NOT BE TAKEN INTO CONSIDERAT ION IF THE PEAK CREDIT FORMS PART AND PARCEL OF THE DECLARED BUSINE SS INCOME. IT IS ORDERED ACCORDINGLY. 6. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT FOR IDENTICAL ISSUE WAS REMITTED BACK TO THE FILE O F THE ASSESSING OFFICER FOR RE-EXAMINATION FOR ASSESSMENT YEAR 2003-04. HENCE, THIS YEAR ALSO, THE MATTER NEEDS TO BE RE-EXAMINED. ACCORDINGLY, THE OR DERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSU E RAISED BY THE ASSESSEE ITA NOS.2684 TO 2687 /CHNY/2017 :- 5 -: IN ALL THESE APPEALS IS REMITTED BACK TO THE FILE O F ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER IN TH E LIGHT OF THE MATERIALS THAT MAY BE FILED BEFORE THE ASSESSING OFFICER AN D THEREAFTER DECIDE THE ISSUE AFTER CONSIDERING THE DECISION OF THIS TRIBUN AL IN THE ASSESSMENT YEAR 2003-04 (SUPRA). ALL OTHER INVESTMENT IN LORRIES, CAR, ETC., ARE NEE DED TO BE EXPLAINED. THEREFORE, ALL ISSUES INCLUDING THE S URRENDER OF RS.10,00,000/- IS REMITTED BACK TO ASSESSING OFFICE R. THE ASSESSING OFFICER SHALL RE-EXAMINE THE ISSUES AND DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS: 2009-10, 2010-11, 2011-12 & 2012-13 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER, 2019 IN CHENNAI. SD/- SD/- ( ! ) ( RAMIT KOCHAR ) /ACCOUNTANT MEMBER ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 1 /DATED: 21 ST OCTOBER, 2019. K S SUNDARAM , *!2 32 /COPY TO: 1. ) /APPELLANT 4. 4 /CIT 2. *+) /RESPONDENT 5. 2 * /DR 3. 4 ( ) /CIT(A) 6. & /GF