Janardhan Chokhani, Kolkata V. DCIT, CC-VI, KOLKATA, Kolkata

ITA 272/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0598 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 19-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset converted into stock in trade; Peak credit; Initiation of penalty proceedings; Accommodation entries
• Section: 153A; 234B; 132; 144

Judgement Text

1 ITA NO. 214/KOL/2015 ASSESSMENT YEAR: 2009-2010 & ITA NOS. 272 & 273/KOL/2015 ASSESSMENT YEARS : 2009-2010 2010-2011 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 214/KOL./2015 ASSESSMENT YEAR: 2009-2010 DEPUTY COMMISSIONER OF INCOME TAX,................. ........................APPELLANT CIRCLE-2(1), KOLKATA, AAYAKAR BHAWAN POORVA, E.M. BYE PASS, 110, SHANTI PALLY, KOLKATA-700 107 -VS.- SHRI JANARDAN CHOKHANI,............................ .............................RESPONDENT 67/1/2, NIMTALA GHAT STREET, KOLKATA-700 006 [PAN: ACDPC 0332 Q] & I.T.A. NOS. 272 & 273/KOL./2015 ASSESSMENT YEARS: 2009-2010 & 2010-2011 SHRI JANARDAN CHOKHANI,............................ .............................APPELLANT 67/1/2, NIMTALA GHAT STREET, KOLKATA-700 006 [PAN: ACDPC 0332 Q] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ........................RESPONDENT CIRCLE-2(1), KOLKATA, AAYAKAR BHAWAN POORVA, E.M. BYE PASS, 110, SHANTI PALLY, KOLKATA-700 107 APPEARANCES BY: SHRI PINAKI MUKHERJEE, ADDL. CIT, D.R., FOR THE DEP ARTMENT SHRI A.K. TULSIAN, FCA, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : DECEMBER 20, 2017 DATE OF PRONOUNCING THE ORDER : DECEMBER 22, 2017 2 ITA NO. 214/KOL/2015 ASSESSMENT YEAR: 2009-2010 & ITA NOS. 272 & 273/KOL/2015 ASSESSMENT YEARS : 2009-2010 2010-2011 O R D E R PER SHRI P.M. JAGTAP, ACCOUNTANT MEMBER : OUT OF THESE THREE APPEALS, TWO APPEALS BEING ITA N O. 214/KOL/2015 (REVENUES APPEAL) AND ITA NO. 272/KOL /2015 (ASSESSEES APPEAL) ARE THE CROSS APPEALS FOR ASSES SMENT YEAR 2009-10 WHILE THE REMAINING THIRD APPEAL BEING ITA NO. 273/ KOL/2015 IS THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2010-11, WHICH INVOLVES A SOLITARY ISSUE THAT IS SIMILAR TO THE ONE INVOLVED IN THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10. 2. FIRST WE TAKE UP THE CROSS APPEALS FOR A.Y. 2009 -10 BEING ITA NOS. 214/KOL/2015 AND 272/KOL/2015, WHICH ARE DIRECTED A GAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-20, KOLKATA DATED 27.01.2015. THE APPEAL OF THE REVENUE BEING ITA NO. 214/KOL/2015 INVOLVES A SOLITARY ISSUE RELATING TO THE DELETION BY THE LD. CIT(APPEALS) OF THE TRADING ADDITION OF RS.42,85,878/- MADE BY THE ASSESSING OFFICER BY APPLYING THE HIGHER GROSS PROFIT RATE. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF TRADING OF HOSIERY AND COTTON FABRI CS AS WELL AS MANUFACTURING OF LADIES GARMENTS. THE RETURN OF INC OME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 21.12.2009 DECLARING TOTAL INCOME OF RS.3,33,429/-. DURING THE COURSE OF SURVE Y CARRIED OUT IN THE BUSINESS PREMISES OF THE ASSESSEE UNDER SECTION 133 A OF THE ACT, NO BOOKS OF ACCOUNT FOR THE YEAR UNDER CONSIDERATION W ERE FOUND TO BE MAINTAINED. THE ASSESSEE, THEREFORE, WAS CALLED UPO N BY THE ASSESSING OFFICER TO PRODUCE THE BOOKS OF ACCOUNT AND OTHER D ETAILS REQUIRED FOR THE PURPOSE OF HIS ASSESSMENT. THE ASSESSEE, HOWEVER, F AILED TO COMPLY WITH THIS REQUIREMENT INSPITE OF SUFFICIENT OPPORTUNITY AFFORDED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER, THEREFORE , WAS LEFT WITH NO OPTION BUT TO COMPLETE THE ASSESSMENT UNDER SECTION 144 TO THE BEST OF 3 ITA NO. 214/KOL/2015 ASSESSMENT YEAR: 2009-2010 & ITA NOS. 272 & 273/KOL/2015 ASSESSMENT YEARS : 2009-2010 2010-2011 HIS JUDGMENT. IN THIS REGARD, HE FOUND THAT THE GRO SS PROFIT DECLARED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AT 1. 59% WAS SUBSTANTIALLY LOWER THAN THE GROSS PROFIT RATE OF 7.32% DECLARED BY THE ASSESSEE IN THE IMMEDIATELY PRECEDING YEAR. IN THE ABSENCE OF PRODU CTION OF BOOKS OF ACCOUNT AND OTHER DETAILS BY THE ASSESSEE, THE ASSE SSING OFFICER ESTIMATED THE INCOME OF THE ASSESSEE BY APPLYING THE GROSS PR OFIT RATE OF 7.32%, WHICH RESULTED IN THE TRADING ADDITION OF RS.42,85, 878/-. 4. THE TRADING ADDITION MADE BY THE ASSESSING OFFIC ER BY APPLYING HIGHER GROSS PROFIT RATE OF IMMEDIATELY PRECEDING Y EAR WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT (APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, T HE LD. CIT(APPEALS) DELETED THE SAID ADDITION FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 7 OF HIS IMPUGNED ORDER:- 7. I HAVE PERUSED THE IMPUGNED ORDER AND ALSO CONSIDERED THE SUBMISSIONS OF THE LD AR. IT APPEARS THAT THE BOOKS OF ACCOUNT WERE ADMITTEDLY NOT PRODUCED B EFORE THE AO AT THE ASSESSMENT STAGE. THE AO HOWEVER HAS BROUGHT NO POSITIVE MATERIAL TO SUBSTANTIATE HIS ESTIMATION OF THE GROSS PROFIT. THE AO DOES NOT APP EAR TO BE CONFIDENT ABOUT HIS OWN ACTION WHEN HE NOTED IN THE IMPUGNED ORDER THAT HE HAD NO ALTERNATIVE BUT TO ESTIMATE THE GROSS PROFIT OF THE ASSESSEE. THE DECL INE IN THE GROSS PROFIT RATE CAN BE NO JUSTIFICATION FOR E STIMATING THE GROSS PROFIT. I FIND FROM THE IMPUGL1ED ORDER T HAT THE TAX AUDIT REPORT WAS PRODUCED AT THE ASSESSMENT STA GE BUT THE AO HAS FOUND NO SPECIFIC DEFECT IN THE AUDITED ACCOUNTS OF THE ASSESSEE. I ALSO FIND THAT THE AO H AS NOT REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE JURISDICTIONAL ITAT HAS IN THE CASE OF M/S SRK TEA PROCESSING INDUSTRIES LTD VS ACIT (ITA NO. 1685/KOL/2009) HELD THAT THE FIRST PROVISO TO SECTI ON 145( 1) OR 145(2) CAN BE INVOKED ONLY WHEN THE ELEMENTS ATTRACTING EITHER OF THOSE PROVISIONS ARE FOUND TO EXIST. THE AO HAS TO GIVE A CATEGORICAL FINDING IN THAT RE GARD AND ALSO THE MATERIAL WHICH CONSTITUTED THE BASIS O F SUCH FINDING. THE AO IS THEREFORE NOT COMPETENT TO MAKE AN ASSESSMENT UNDER FIRST PROVISO TO SECTION 145(1) OR 145(2) WITHOUT REJECTING THE BOOKS OF ACCOUNT. I FIND THAT THERE IS NO FINDING OF THE AO IN THE ASSESSMENT ORDER IN RES PECT TO THE FACT THAT THE METHOD OF ACCOUNTING ADOPTED BY T HE 4 ITA NO. 214/KOL/2015 ASSESSMENT YEAR: 2009-2010 & ITA NOS. 272 & 273/KOL/2015 ASSESSMENT YEARS : 2009-2010 2010-2011 ASSESSEE IS NOT REGULARLY EMPLOYED OR THAT HIS INCO ME, PROFITS OR GAINS COULD NOT BE DEDUCED OR ACCOUNTS A RE INCOMPLETE OR INCORRECT IN THE PRESENT CASE. IN ABS ENCE OF SUCH FINDING AND WITHOUT THE REJECTION OF THE BOOKS OF ACCOUNT, IT CANNOT BE HELD THAT THE AO HAS RIGHTLY ESTIMATED THE GROSS PROFIT OF THE ASSESSEE. ACCORDI NGLY, I AM OF THE CONSIDERED VIEW THAT THE AO HAS ERRED IN APPLYING GROSS PROFIT RATE ON THE BASIS OF EARLIER YEAR WITHOUT REJECTING BOOKS OF ACCOUNT. IT ALSO APPEARS THAT THE ESTIMATION OF PROFIT IS BASED MORE ON SUSPICION THAN ON FACTUAL GROUND. THE AO HAS BROUGHT NO MATERIAL O N RECORD TO SHOW THAT THE ASSESSEE MADE MORE PROFIT T HAN WHAT WAS DECLARED IN HIS BOOKS OF ACCOUNT MAINTAINE D IN THE NORMAL COURSE OF THE BUSINESS. THERE WAS ADMITT EDLY NON-COMPLIANCE ON THE PART OF THE ASSESSEE BUT THAT DID NOT AUTHORIZE THE AO TO MAKE A WILD ASSESSMENT AND ESTIMATE THE GROSS PROFIT AT AN ARBITRARY FIGURE WI THOUT THERE BEING ANY SUPPORTIVE MATERIAL TO JUSTIFY SUCH ESTIMATION. THE AO WAS EXPECTED TO BRING SOME MATER IAL ON RECORD TO SUPPORT HIS ESTIMATION OF PROFIT. IN V IEW OF THE ABOVE, I AM OF THE OPINION THAT THE ESTIMATION OF PROFIT AS MADE BY THE AO IN THE IMPUGNED ORDER IS N EITHER SUSTAINABLE IN LAW NOR ON THE FACTS OF THE CASE. TH E ADDITION OF RS.42,85,878/- IS DELETED. GROUND NO 4 IS ALLOWED. IN CONSEQUENCE, GROUND NO 5 FAILS. GROUND NO 6 RELATES TO THE CHARGING OF INTEREST U/S 234A, 234B AND 234C WHICH IS CONSEQUENTIAL. GROUND NO 7 IS DIRECTE D AGAINST THE INITIATION OF PENALTY PROCEEDINGS U/ S 271(1)(B) AND 271(1)(C) WHICH IS PREMATURE FOR ADJUDICATION AT THIS STAGE. GROUND NO 8 IS GENERAL IN NATURE. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON REC ORD. AS RIGHTLY CONTENDED BY THE LD. D.R., THE RELIEF GIVEN BY THE LD. CIT(APPEALS) BY DELETING THE TRADING ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THERE WAS NO REJECTION OF BOOKS OF ACCOUNT BY THE ASSESSING OFFICER IS NOT WELL FOUNDED. WHEN THE ASSESSEE HAD FAILED TO P RODUCE THE BOOKS OF ACCOUNT AND OTHER RELEVANT DETAILS AS REQUIRED BY T HE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS DESPITE SUFFICIENT OPPORTUNITY AFFORDED IN THIS REGARD, THERE WAS NO Q UESTION OF ANY REQUIREMENT ON THE PART OF THE ASSESSING OFFICER TO REJECT THE BOOKS OF 5 ITA NO. 214/KOL/2015 ASSESSMENT YEAR: 2009-2010 & ITA NOS. 272 & 273/KOL/2015 ASSESSMENT YEARS : 2009-2010 2010-2011 ACCOUNT. IN OUR OPINION, THE ASSESSING OFFICER WAS LEFT WITH NO OPTION BUT TO COMPLETE THE ASSESSMENT TO THE BEST OF HIS JUDGM ENT UNDER SECTION 144 AS A RESULT OF THE FAILURE OF THE ASSESSEE TO PRODU CE THE BOOKS OF ACCOUNT AND THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN PUTTI NG THE ENTIRE ONUS ON THE ASSESSING OFFICER TO BRING ANY ADVERSE MATERIAL ON RECORD TO JUSTIFY THE ESTIMATION OF INCOME BY APPLYING A HIGHER GROSS PROFIT RATE. WHEN THE ASSESSEE FAILS TO PRODUCE THE BOOKS OF ACCOUNT IN S UPPORT OF THE BOOK RESULTS DECLARED BY HIM, THE ASSESSING OFFICER IS E NTITLED OR RATHER IS DUTY BOUND TO COMPLETE THE ASSESSMENT UNDER SECTION 144 TO THE BEST OF HIS JUDGMENT ON THE BASIS OF MATERIAL AVAILABLE ON RECO RD AND THERE IS NO REQUIREMENT IN SUCH CASE TO REJECT THE BOOKS OF ACC OUNT WHICH THE ASSESSEE HAS NOT EVEN PRODUCED BEFORE HIM FOR VERIF ICATION. EVEN THE LD. COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO RAISE ANY MATERIAL CONTENTION TO DISPUTE THIS POSITION. HE, HOWEVER, H AS CONTENDED THAT THE GROSS PROFIT RATE OF 7.32% AS APPLIED BY THE ASSESS ING OFFICER ON THE BASIS OF GROSS PROFIT RATE DECLARED IN THE IMMEDIATELY PR ECEDING YEAR IS HIGHLY EXCESSIVE AND UNREASONABLE. IN THIS REGARD, HE HAS INVITED OUR ATTENTION TO THE SPECIFIC SUBMISSIONS MADE BY THE ASSESSING O FFICER BEFORE THE LD. CIT(APPEALS), WHEREIN THE FALL IN GROSS PROFIT RATE IN THE YEAR UNDER CONSIDERATION WAS EXPLAINED BY THE ASSESSEE BY POIN TING OUT THAT THE TURNOVER OF THE ASSESSEE FOR THE YEAR UNDER CONSIDE RATION WAS INCREASED FIVE-FOLDS AS COMPARED TO THE IMMEDIATELY PRECEDING YEAR. IT WAS ALSO EXPLAINED THAT THE ASSESSEES BUSINESS HAD TWO COMP ONENTS, I.E. TRADING AND MANUFACTURING OF HOSIERY GOODS AND THERE WAS A SUBSTANTIAL INCREASE IN THE TRADING SALES AS COMPARED TO MANUFACTURING S ALES IN THE YEAR UNDER CONSIDERATION. THE RELEVANT DETAILS OF TURNOVER OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AS WELL AS FOR THE IMMEDIA TELY PRECEDING THREE YEARS WERE ALSO FURNISHED BY THE ASSESSEE BEFORE TH E LD. CIT(APPEALS) TO SHOW THAT THERE WAS A VARIATION IN THE COMPONENTS O F TOTAL SALES, I.E. TRADING SALE AND MANUFACTURING SALE. KEEPING IN VIE W ALL THESE SUBMISSIONS MADE BY THE ASSESSEE SPECIFICALLY BEFOR E THE LD. CIT(APPEALS), WHICH ARE RELEVANT TO JUSTIFY THE VAR IATION IN THE GROSS 6 ITA NO. 214/KOL/2015 ASSESSMENT YEAR: 2009-2010 & ITA NOS. 272 & 273/KOL/2015 ASSESSMENT YEARS : 2009-2010 2010-2011 PROFIT RATE AS DECLARED BY THE ASSESSEE, WE ARE OF THE VIEW THAT THE GROSS PROFIT RATE OF 7.32% OF THE LAST YEAR AS APPLIED BY THE ASSESSING OFFICER IS EXCESSIVE AND UNREASONABLE AND IT WOULD BE FAIR AND REASONABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE TO APPLY THE AV ERAGE GROSS PROFIT RATE OF THE RELEVANT FIVE YEARS AS WORKED OUT BY THE ASS ESSEE AT 4.42% IN THE SUBMISSIONS MADE BEFORE THE LD. CIT(APPEALS). WE AC CORDINGLY MODIFY THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSU E AND DIRECT THE ASSESSING OFFICER TO RE-COMPUTE THE TRADING ADDITIO N TO BE MADE TO THE TOTAL INCOME OF THE ASSESSEE BY APPLYING THE GROSS PROFIT RATE OF 4.42% INSTEAD OF 7.32%. THE APPEAL OF THE REVENUE FOR A.Y . 2009-10 IS THUS PARTLY ALLOWED. 6. THE SOLITARY ISSUE INVOLVED IN THE APPEAL OF THE ASSESSEE FOR A.Y. 2009-10 RELATES TO THE ADDITION OF RS.14,25,000/- M ADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON AC COUNT OF CASH DEPOSITS FOUND TO BE MADE IN THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE WITH ING VYSYA BANK. 7. IN THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH ING VYSYA BANK, CASH DEPOSITS OF RS.14,25,000/- WER E FOUND TO BE MADE DURING THE YEAR UNDER CONSIDERATION. IN THIS REGARD , IT WAS EXPLAINED BY THE ASSESSEE THAT THE SAID UNDISCLOSED BANK ACCOUNT WAS USED BY HIM FOR PROVIDING ACCOMMODATION ENTRIES ON COMMISSION BASIS . HE, THEREFORE, CONTENDED THAT THE ADDITION ONLY TO THE EXTENT OF S UCH COMMISSION EARNED BY HIM FOR PROVIDING THE ACCOMMODATION ENTRIES COUL D BE MADE. THIS STAND OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY T HE ASSESSING OFFICER IN THE ABSENCE OF ANY DETAILS FURNISHED BY THE ASSESSE E GIVING NAMES AND ADDRESSES OF THE PERSONS TO WHOM THE ACCOMMODATION ENTRIES WERE PROVIDED AS WELL AS THE NATURE OF ENTRIES SO PROVID ED. HE ACCORDINGLY ADDED THE ENTIRE AMOUNT OF RS.14,25,000/- FOUND TO BE DEPOSITED IN THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE. 7 ITA NO. 214/KOL/2015 ASSESSMENT YEAR: 2009-2010 & ITA NOS. 272 & 273/KOL/2015 ASSESSMENT YEARS : 2009-2010 2010-2011 8. THE ADDITION OF RS.14.25 LAKHS MADE BY THE ASSES SING OFFICER ON ACCOUNT OF CASH DEPOSITS MADE IN HIS UNDISCLOSED BA NK ACCOUNT WAS DISPUTED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE LD. CIT(APPEALS), IT WAS CONTENDED BY THE ASSESSEE THAT THERE WAS A SEAR CH CONDUCTED IN HIS CASE ON 02.07.2013 AND AS FOUND DURING THE COURSE O F SEARCH ON THE BASIS OF MATERIAL SEIZED, HE WAS ENGAGED IN PROVIDING ACC OMMODATION ENTRIES. EVEN THE COMMISSION INCOME EARNED FOR PROVIDING SUC H ACCOMMODATION ENTRIES AS DECLARED BY THE ASSESSEE DURING THE RELE VANT ASSESSMENT YEARS INCLUDING THE ASSESSMENT YEAR UNDER CONSIDERATION W AS ALSO ACCEPTED BY THE ASSESSING OFFICER. IT WAS CONTENDED BY THE ASSE SESE BEFORE THE LD. CIT(APPEALS) THAT THE FINDINGS OF SEARCH, WHICH SUP PORTED THE PLEA OF THE ASSESSEE THAT THE CASH DEPOSITS FOUND TO BE MADE IN HIS UNDISCLOSED BANK ACCOUNT WITH ING VYSYA BANK WERE PART OF HIS BUSINE SS ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES, SHOULD BE TAKEN IN TO CONSIDERATION WHILE DECIDING THIS ISSUE. AN ALTERNATIVE CONTENTIO N WAS ALSO RAISED BY THE ASSESSEE THAT ONLY THE PEAK CREDIT AS APPEARING IN HIS UNDISCLOSED BANK ACCOUNT WITH ING VYSYA BANK SHOULD BE ADDED AN D NOT THE TOTAL AMOUNT OF ALL DEPOSITS. 9. THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE S UBMISSIONS BY THE ASSESSEE ON THIS ISSUE AND PROCEEDED TO CONFIRM THE ADDITION OF RS.14.25 LAKHS MADE BY THE ASSESSING OFFICER FOR THE FOLLOWI NG REASONS GIVEN IN PARAGRAPH NO. 5 OF HIS IMPUGNED ORDER:- 5. I HAVE PERUSED THE IMPUGNED ORDER AND CONSIDE RED THE SUBMISSIONS OF THE ASSESSEE. THE LD AR HAS ARGUED T HAT SEARCH U/S 132 WAS CONDUCTED ON 02-07 -2013 IN THE CASE OF THE ASSESSEE AND THE MATERIAL FOUND THEREIN SHOULD BE CONSIDERED WHILE DECIDING THE PRESENT APPEAL. I DO NOT FIND MERIT IN THE CONTENTIONS OF THE LD. AR. THE SECOND PROVISO TO SE CTION 153A(I) CLEARLY STATES THAT ONLY THOSE ASSESSMENT PROCEEDIN GS THAT WERE PENDING ON THE DATE OF INITIATION OF THE SEARCH SHA LL ABATE. THE IMPUGNED ASSESSMENT WAS MADE ON 30-12-2011 WHEN THE SEARCH HAD NOT TAKEN PLACE. UNDER THE CIRCUMSTANCES, THE M ATERIAL FOUND IN THE SEARCH CANNOT BE LAWFULLY CONSIDERED WHILE D ECIDING THE PRESENT APPEAL. ON THE MERITS OF THE CASE, THE LD A R HAS ARGUED 8 ITA NO. 214/KOL/2015 ASSESSMENT YEAR: 2009-2010 & ITA NOS. 272 & 273/KOL/2015 ASSESSMENT YEARS : 2009-2010 2010-2011 THAT THE PEAK CREDIT OF RS.5 LAKHS WHICH APPEARS ON 31-12-2008 SHOULD BE ASSESSED AS THE INVESTMENT IN THE UNDISCL OSED BANK ACCOUNT. THE LD AR HAS ALSO PLACED RELIANCE ON CERT AIN JUDICIAL DECISIONS IN SUPPORT OF HIS CONTENTION. I HAVE CONS IDERED THE SUBMISSIONS AND PERUSEDTHE MATERIAL ON RECORD. THE PEAK CREDIT IS ASSESSABLE WHERE THE BANK ACCOUNT CONTAINS MIXED TRANSACTIONS INVOLVING FREQUENT DEPOSITS AS WELL AS WITHDRAWALS OF CASH OR CHEQUE. I HOWEVER FIND FROM THE BANK STA TEMENT THAT THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE DOES N OT REFLECT SUCH STATE OF AFFAIRS. ON THE CONTRARY, EACH CASH D EPOSIT IN THE BANK ACCOUNT IS FOLLOWED BY ISSUE OF CHEQUE THEREBY RULING OUT THE POSSIBILITY OF SUCH MONEY JUDICIAL DECISIONS IN SUPPORT OF HIS CONTENTION. I HAVE CONSIDERED THE SUBMISSIONS AND P ERUSED THE MATERIAL ON RECORD. THE PEAK CREDIT IS ASSESSABLE W HERE THE BANK ACCOUNT CONTAINS MIXED TRANSACTIONS INVOLVING FREQU EST DEPOSITS AS WELL AS WITHDRAWALS OF CASH OR CHEQUE. I HOWEVER FIND FROM THE BANK STATEMENT THAT THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE DOES NOT REFLECT SUCH STATE OF AFFAIRS. ON THE CONT RARY, EACH CASH DEPOSIT IN THE BANK ACCOUNT IS FOLLOWED BY ISSUE OF CHEQUE THEREBY RULING OUT THE POSSIBILITY OF SUCH MONEY RE TURNING TO THE BANK ACCOUNT. I AM OF THE CONSIDERED VIEW THAT IN S UCH FACTUAL BACKGROUND, PEAK THEORY IS NOT APPLICABLE. THE AO W AS THEREFORE JUSTIFIED IN ADDING THE CASH DEPOSITS TOTALING TO R S.14.25 LAKHS. GROUND NO. 3 IS DISMISSED. 10. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES O N THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON REC ORD. AS RIGHTLY SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, WHEN THE ASSESSEE WAS FOUND TO HAVE INDULGED IN GIVING ACCOMMODATION ENTR IES DURING THE RELEVANT YEARS INCLUDING THE YEAR UNDER CONSIDERATI ON AS A RESULT OF SEARCH CONDUCTED IN HIS CASE SUBSEQUENTLY ON 02.07. 2013, THE SAID FINDING WAS REQUIRED TO BE TAKEN INTO CONSIDERATION WHILE D ECIDING THE ISSUE RELATING TO THE ADDITION MADE ON THE BASIS OF ENTRI ES FOUND REFLECTED IN HIS UNDISCLOSED BANK ACCOUNT WITH ING VYSYA BANK, WHICH THE ASSESSEE HAD CATEGORICALLY EXPLAINED DURING THE COURSE OF ASSESS MENT PROCEEDINGS ITSELF AS PERTAINING TO HIS ACTIVITY OF PROVIDING A CCOMMODATION ENTRIES. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO CONTENDED THAT VARIOUS BANK ACCOUNTS WERE TO FOUND TO BE MAINTAINED IN THE NAME OF THE ASSESSEE AS WELL AS HIS FAMILY MEMBERS DURING THE COURSE OF SEA RCH AND THE CLAIM OF THE ASSESSEE THAT THE SAID BANK ACCOUNTS WERE UTILI ZED FOR PROVIDING 9 ITA NO. 214/KOL/2015 ASSESSMENT YEAR: 2009-2010 & ITA NOS. 272 & 273/KOL/2015 ASSESSMENT YEARS : 2009-2010 2010-2011 ACCOMMODATION ENTRIES WAS ACCEPTED BY THE ASSESSING OFFICER. HE HAS ALSO CONTENDED THAT THE COMMISSION INCOME EARNED BY THE ASSESSEE FOR PROVIDING ACCOMMODATION ENTRIES AS REFLECTED IN ALL THE RELEVANT BANK ACCOUNTS INCLUDING THE BANK ACCOUNT MAINTAINED WITH ING VYSYA BANK WAS DECLARED BY THE ASSESSEE IN THE RETURNS OF INCOME F ILED IN RESPONSE TO THE NOTICES ISSUED BY THE ASSESSING OFFICER UNDER SECTI ON 153A FOR ALL THE RELEVANT YEARS INCLUDING THE YEAR UNDER CONSIDERATI ON AND, THEREFORE, THE IMPUGNED ADDITION MADE IN REGULAR ASSESSMENT ON THE BASIS OF THE SAME ENTRIES HAS RESULTED IN DOUBLE ADDITION. THE LD. D. R., ON THE OTHER HAND, HAS CONTENDED THAT THIS CLAIM MADE BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE LD. CIT(APPEALS) HAS NOT BEEN VERIFIED B Y THE LD. CIT(APPEALS) ON MERIT AS HE DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE MATERIAL FOUND DURING THE COURSE OF SEARCH SHOULD B E CONSIDERED WHILE DECIDING THE ISSUE INVOLVED IN REGULAR ASSESSMENT. HE HAS CONTENDED THAT IF AT ALL THE SAID MATERIAL IS REQUIRED TO BE CONSI DERED, AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE. WE FIND MERIT IN THIS CONTENTION OF THE LD. D.R. AC CORDINGLY THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR D ECIDING THE SAME AFRESH AFTER VERIFYING THE CLAIM OF THE ASSESSEE ON THE BA SIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH. THE APPEAL OF THE ASSE SSEE FOR A.Y. 2009-10 IS ACCORDINGLY TREATED AS ALLOWED. 11. AS REGARDS THE APPEAL OF THE ASSESSEE FOR A.Y. 2010-11 BEING ITA NO. 273/KOL/2015, IT IS OBSERVED THAT THE SOLITARY ISSU E INVOLVED THEREIN RELATING TO THE ADDITION MADE TO THE TOTAL INCOME O F THE ASSESSEE ON THE BASIS OF CASH DEPOSITS FOUND TO BE MADE IN HIS UNDI SCLOSED BANK ACCOUNT WITH ING VYSYA BANK IS SIMILAR TO THE ONE INVOLVED IN ASSESSEES APPEAL FOR A.Y. 2009-10, WHICH HAS ALREADY BEEN DECIDED BY US. FOLLOWING OUR CONCLUSION DRAWN IN A.Y. 2009-10, WE SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) CONFIRMING THE ADDITION MADE BY TH E ASSESSING OFFICER ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF TH E ASSESSING OFFICER FOR 10 ITA NO. 214/KOL/2015 ASSESSMENT YEAR: 2009-2010 & ITA NOS. 272 & 273/KOL/2015 ASSESSMENT YEARS : 2009-2010 2010-2011 DECIDING THE SAME AFRESH AFTER VERIFYING THE CLAIM OF THE ASSESSEE ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH . THE APPEAL OF THE ASSESSEE FOR A.Y. 2010-11 IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL OF THE REVENUE FOR A. Y. 2009-10 IS PARTLY ALLOWED, WHILE THE APPEALS OF THE ASSESSEE F OR A.Y. 2009-10 AND 2010-11 ARE TREATED AS ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF DECEMBER, 2017. SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP ) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 22 ND DAY OF DECEMBER, 2017 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), KOLKATA, AAYAKAR BHAWAN POORVA, E.M. BYE PASS, 110, SHANTI PALLY, KOLKATA-700 107 2) SHRI JANARDAN CHOKHANI, 67/1/2, NIMTALA GHAT STREET, KOLKATA-700 006 (3) CIT(APPEALS)-20, KOLKATA, (4) CIT- , KOLKATA, (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/DDO, INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.