The Income Tax Officer, Amritsar. V. Sh. Harjinder Singh, Amritsar.

ITA 272/ASR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89851 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 01-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TARSEM LAL
• Assessee Lawyers: PADAM BAHL
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. PRAMOD KUMAR, ACCOUNTANT MEMBER AND SH. A.D.JAIN, JUDICIAL MEMBER I.T.A. NO. 272 (ASR)/2014 ASSESSMENT YEAR: 2005 - 06 PAN: ABSPS9344Q THE INCOME TAX OFFICER, WARD 4(2), AMRITSAR VS. SH. HARJINDER SINGH, H. NO.10, OPP POWER STATION, NEW TEHSILPURA, AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARSEM LAL, DR. RESPONDEN T BY: SH. PADAM BAHL, CA. DATE OF HEARING: 03.06.2015 DATE OF PRONOUNCEMENT : 04 .06.2015 ORDER PER A.D.JAIN (JM): THIS IS DEPARTMENTS APP EAL FOR THE ASSESSMENT YEAR 2005 - 06, CONTENDING THAT THE LEAREND CIT(A) HAS ERRED IN REDUCING THE ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPLAINED DEPOSITS AT RS.16,06,000/ - TO RS.2,03,314/ - GRANTING RELIEF OF RS.14,02,686/ - ON THE BASIS OF PEAK APPEARING IN THE BANK ACCOUNT WHEREAS THE ASSESSEE NEVER DISCHARGD HIS ONUS REGARDING THE SOURCE AND NATURE OF CASH CREDITS IN HIS BANK ACCOUNT. 2. THE ASSESSING OFFICER HAD MADE AN ADDITION OF RS.16,06,000/ - , ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT. THESE DEPOSIT S WERE MADE IN AN 2 . ITA NO. 272(ASR)/2014 ASST. YEAR 2005 - 06 ACCOUNT MAINTANED WITH THE IDBI BANK. THE STAND OF THE ASSESSEE WAS THAT THE SAID BANK ACCOUNT WAS A JOINT ACCOUNT OF THE ASSESSEE AND HIS SON , S. AMANPREET SINGH. THE AO ASKED THE ASSESSEE TO EXAPLAIN THE SOURCE OF THESE DEPOSITS. THE ASSESSEE EXPLAINED THAT THESE DEPOSITS HAD COME FROM PAYMENTS RECEIVED BY THE ASSESSEE FROM CUSTOMERS/C ONTRACTORS ON ACCOUNT OF MARBLE / TILES/ STONES ARRANGED BY THE ASSESSEE FOR THEM. THE ASSE SSEE EXPLAINED THAT THE AMOUNTS WITHDRAWN REPRESENTED PAYMENTS MADE BY THE ASSESSEE FOR GOODS, FOR HIS CUSTOMERS/ CONTRACTORS. THE ASSESSEE CLAIMED THAT HE HAD OFFERED THIS COMMISSION IN HIS INCOME TAX RETURN, AT RS.85,700/ - THE ASSESSEE ALSO CLAIMED THAT HIS SON HAD ALSO SHOWN COMMISSION INCOME FROM THIS BUSINESS. IN THE ALTERNATIVE, THE ASSESSEE CLAIMED THAT THE COMMISSION INCOME BE TREATED AS INCOME FROM TRADING OF M ARBLE / STONES/ TILES/ ETC. , U/S. 44 AF OF THE IT ACT. IT WAS EXPLAINED THAT BOTH, THE DEPOSITS AS WELL AS THE WITHDRAWALS WERE IN SMALL AMOUNTS. AS A FU RTHER ALTERNATIVE, IT WAS SUBMITTED BY THE ASSEESSEE THAT THE PEAK CREDIT OF THE AMOUNT SHOWN IN THE NET ASSESSABLE INCOME AS COMMISSION INCOME FROM THE CUSTOMERS, AMOUNTING TO RS.2,03,314/ - BE ONLY TAKING INTO CONSIDERATION, SINCE THE ASSESSEE HAD NOT MA DE ANY INVESTMENT DURING THE YEAR, WHICH WOULD REFLECT THE AMOUNT FROM UNDISCLOSED SHOURCES. AS EVIDENCE, THE ASSESSEE FILED THE EVIDENCE OF FOUR CUSTOMERS/ CONTRACTORS, MONTHWISE DETAILS OF COMMISSION 3 . ITA NO. 272(ASR)/2014 ASST. YEAR 2005 - 06 EARNE D BY AND COPY OF ASSESSMENT ORDER OF HIS SON, SH . AMANPREET SINGH. THE AO SOUGHT FOR CONFIRMATION FROM THE PERS ONS WHO HAD GIVEN THE AFFIDAVITS , BUT NO CONFIRMATION WAS RECEIVED FROM THEM. THE AO TREATED THE ENTIRE CASH DEPOSITS AS UNEXPALINED DEPOSITS OF THE ASSESSEE AND MADE THE ADDITION OF RS.16, 06,0 00/ - . THE LEARNED CIT(A) REDUCED THE ADDITION TO RS.1,44,614/ - . 3. THE LEAREND DR CONTENDS THAT IT REMAINS UND ISPUTED THAT THE PERSONS WHO HAD FILED AFFIDAVIT S , DID NOT FILE ANY CONFIRMATION. THIS HAS NOT BEEN TAKING INTO CONSIDERATION BY THE LEARNED CI T(A). 4. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED STRON LY RELAINCE ON THE IMPUGNED ORDER, CONTENDING THAT AS AVAILABLE FROM THE COPY OF THE BANK STATEMENT OF THE ACCOUNT MAINTAINED BY THE ASSESSEE WITH IDBI BANK JOINTLY IN HIS O WN NAME AND IN THE NAME OF HIS SON (APB1 - 5), THERE WERE REGULAR DEPOSITS AND WITHDRAWALS. IT HAS BEEN CONTENDED THAT THE ALTERNATIVE CONTENTION OF THE ASSESSEE, I.E., TO TAKE THE PEAK CREDITS INTO ACC OUNT ONLY, WHICH WAS NOT TAKEN INTO CONSIDERATION BY THE AO, HAS RIGHTLY BEEN ACCEPTED BY THE LEARNED CIT(A). 5. IN THIS REGARD, THE CONTENTION OF THE ASSESSEE IS FOUND TO BE CORRECT. THE BANK STATEMENT SHOWS THAT INDEED , THE DE POSITS AND WITHDRAWALS IN THE BANK ACCOUNT WERE REGULAR TRANSA CTIONS. THE PEAK DEPOSIT WAS ONLY OF 4 . ITA NO. 272(ASR)/2014 ASST. YEAR 2005 - 06 RS.3,10,62 9/ - , AND THAT TO O , ON AN OPENING BALANCE OF RS. 1,07,315/ - THE AO DID NOT RECORD ANY FINDING QUA THE FREQUENT SMALL WITHDRAWAL S . FURTHER , UNDSIPUTEDLY, THE ASSESSEE IS A SMALL BUSINESS MAN AND THE CASH DEPOSIT S FOUND THEIR SOURCE IN THE CASH RECEIVED FROM CUSTOMERS/ BUILDERS, FOR WHICH, OBVIOUSLY, NO BILLS COULD BE IN EXISTENCE. MOROVER, THE AO DID NOT BRING ANY MATERIAL ON RECORD, THROUGH ANY INVESTIGATION, THAT THE CASH WITHDRAWAL S HAS BEEN USED FOR ANY UNAC COUNTED UNINVESTMENT AND EXPE NDITURE. THEREFORE, THE LEARNED CIT(A) WAS CORRECT IN ACCEPTING THE ALTERNATIVE PLEA OF THE ASSESSEE AND REDUCING THE ADDITION ON THE BASIS OF PEAK CASH CREDIT. AS SUCH, THE LEARNED CIT(A) CANNOT BE HELD UNJUSTIFIED IN REDUDING THE ADDITION OF RS.16,06,000/ - T O THAT OF RS.1,44,614/ - , ON THE BASIS OF PEAK CASH CREDIT. ACCORDINGLY, FINDING NO MERIT IN THE GROUND TAKEN BY THE DEPARTMENT, IT IS REJECTED. 6 . IN THE RESULT, THE APPEAL FIELD BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 0 4 . 0 6 . 2015. S D / - S D / - (PRAMOD KUMAR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 0 4 .06.2015 /PK/ 5 . ITA NO. 272(ASR)/2014 ASST. YEAR 2005 - 06 COPY OF THE ORDER FORWARDED TO: 1 . THE ASSESSEE: SH. HARJINDER SINGH, H. NO.10, OPP POWER STATION, NEW TEHSILPURA, AMRITSAR. 2. THE INCOME TAX OFFICER, WARD 4(2), AMRITSAR. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSA