Shri Rajesh Dahyabhai Prajapati, Bharuch V. The Income Tax Officer, Ward-4, Bharuch

ITA 2767/AHD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9305 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 16-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LALA PHILIPS
• Keywords: Unexplained cash credit; Income from undisclosed sources; Peak credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER SHRI RAJESH DAHYABHAI PRAJAPTI, 88/3 - 11. RCC NEW C OLON Y, GIDC , IND ESTATE, ANKLESHWAR, BHARUCH - 393002 PAN: AEBPP36002 (APPELLANT) VS THE ITO, WARD - 4, BHARUCH (RESPONDENT) REVENUE BY : MR. LALA PHILIPS , SR. D . R. ASSESSEE BY: MR. HARDIK VORA , A.R. DATE OF HEARING : 03 - 03 - 2 016 DATE OF PRONOUNCEMENT : 03 - 03 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2010 - 11 , AR I SES FROM ORDER OF THE CIT(A) - VI, BARODA DATED 01 - 08 - 2014 IN APPEAL NO. CAB/VI - I T A NO . 2767 / A HD/20 14 A SSESSMENT YEAR 2010 - 11 I.T.A NO. 2767 /AHD /2014 A.Y. 2010 - 11 PAGE NO SHRI RAJESH DAHYABHAI PRAJAPTI VS. ITO 2 125 /2013 - 14 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE S TWIN SUBSTANTI VE GROUNDS CHALLENGE THE ASSESSING OFFICER S ACTION INTER ALIA MAKING ADDITIONS OF UNEXPLAINED CASH CREDIT U/S. 68 AND UNACCOUNTED INCOME FROM UNDISCLOSED SOURCES OF RS. 13,22,400/ - AND RS. 12,55,501/ - ; RESPECTIVELY AS AFFIRMED IN THE LOWER APPELLATE PROCE EDINGS. IT EMERGES THAT FACTUAL BACKGROUND OF BOTH THESE ISSUES IS COMMON. THE ASSESSEE - INDIVIDUAL IS AN EMPLOYEE OF M/S. SKY AND SKYLARK INDUSTRIAL PRODUCTS, GIDC ANKLESHWAR AND A PARTNER IN M/S. ROHAN CHEMICALS . THE ASSESSING OFFICER IN THE COURSE OF SCRUTINY NOTICED HIM TO HAVE MAINTAINING TWO BANK ACCOUNTS WITH HDFC BANK AND THE ANKLESH UDHOGNAR CO - OPERATIVE BANK. HE HAD MADE CASH CREDIT OF RS. 13,22,400/ - IN THE FORMER ACCOUNT AND CREDIT ENTRIES OF RS. 12,55,501/ - IN THE LATTER ONE. THE CO - OPERATI VE BANK ACCOUNT DEMONSTRATED CASH WITHDRAWAL OF RS. 10,71,500/ - IMMEDIATELY AFTER CHEQUE CLEARING. THE ASSESSING OFFICER SOUGHT TO KNOW ALL THE RELEVANT DETAILS THEREOF. 3. THE ASSESSEE PUT IN HIS APPEARANCE. THE ASSESSING OFFICER ASKED HIM ABOUT THE AB OVE STATED CREDIT AND DEBIT ENTRY. HE COULD NOT EXPLAIN THE FORMER. HE PLEADED THAT DEBIT ENTRIES REPRESENTED ATM WITHDRAWAL. THE ASSESSING OFFICER SOUGHT TO KNOW HDFC BANK CASH DEPOSIT MADE FROM SAHARANPUR, SIKAR, BALOTRA, SILIGURI, SONIPAT, SATNA, HYD RABAD, KOLKATTA, CHURU, INDORE, VIJAYWADA, RAJAMUNDRI, I.T.A NO. 2767 /AHD /2014 A.Y. 2010 - 11 PAGE NO SHRI RAJESH DAHYABHAI PRAJAPTI VS. ITO 3 ATBAL, AHMEDABAD, KANDIWALI, PATNA, MADURAI AND BH IWANI. THE ASSESSEE STATED THAT HIS FRIENDS HAD MADE ALL THESE DEPOSITS AS WITHDRAWN IN ANKLESHWAR FOR RS. 500/ - TO RS. 1000/ - IN HIS FAVOURS. HE DID NOT SUBMIT PARTICULARS OF HIS FRIENDS ALONG WITH NAMES AND ADDRESSES. THE ASSESSEE CLAIMED TO HAVE GIVEN CASH SUMS TO HIS FRIENDS. THEN CAME DEPOSITS MADE IN THE ABOVE STATED CO - OPERATIVE BANK. THE ASSESSEE S EXPLANATION WAS IDENTICAL TO EARLIER ONE NO T DISCLOSING EVEN A SINGLE PARTICULAR OF EVEN HIS FRIENDS NAME. THE ASSESSING OFFICER DREW AN INFERENCE BASED ON HIS QUALIFICATION AND STATUS AS WELL AS THE ABOVE S AID DEPOSITS MADE FROM THROUGHOUT THE COUNTRY. HE WAS OF THE VIEW THAT THE FORMER CASH DE POSIT COULD BE A PART OF HAWALA RACKET AS WELL. ALL THIS MADE HIM TO INVOKE SECTION 68 FOR MAKING ADDITION OF RS. 13,22,400/ - AS UNEXPLAINED CASH CREDITS. THE ASSESSING OFFICER THEREAFTER ADVERTED TO ASSESSEE S COOPERATIVE BANK ACCOUNT. HIS VERIFICA TION REVEALED THAT THE ABOVE STATED CHEQUES WERE SELF DRAWN TO PROVE ALL THE DEBIT ENTRIES WERE WITHDRAWALS BY THE ASSESSEE HIMSELF. THE ASSESSING OFFICER TREATED THESE SUMS AS UNACCOUNTED INCOME FROM UNDISCLOSED SOURCES FOR MAKING THE IMPUGNED ADDITIONS O F R S. 12,55, 501/ - . 4. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) HAS AFFIRMED THE ASSESSING OFFICER S FINDINGS. HE FURTHER REJECTS ASSESSEE S PLEA TO TAKE PEAK CREDIT OF THE DEPOSITS IN QUESTION ON THE GROUND THAT THE I.T.A NO. 2767 /AHD /2014 A.Y. 2010 - 11 PAGE NO SHRI RAJESH DAHYABHAI PRAJAPTI VS. ITO 4 RELEVANT CREDIT/DEPOSIT ENT RIES DID NOT PROVE THAT IT WAS THE SAME CASH WITHDRAWN AND RE - DEPOSITED BUT INVOLVED THIRD PARTIES/FRIENDS. THIS MAD E THE ASSESSEE TO PREFER THE INSTANT APPEAL. 5. WE HAVE HEARD RIVAL CONTENTIONS . CASE FILE PERUSED . BOTH PARTIES REITERATE THEIR RES P EC TIVE STANDS IN SUPPORT AND AGAINST THE TWIN SUBSTANTIVE GROUNDS RAISED IN THE INSTANT APPEAL . WE HAVE ALREADY NARRATED THE RELEVANT FACTS IN PRECEDING PARAGRAPHS. THE SOLE ISSUE IN THE INSTANT APPEAL IS AS TO WHETHER BOTH THE LOWER AUTHORITIES HAVE RIGHTLY AD DED CASH DEPOSITS/CHEQUES CREDITED IN ASSESSE S S TWO BANK ACCOUNTS IS UNEXPLAINED OR NOT. THERE IS NO DISPUTE THAT THESE DEPOSITS HAVE BEEN MADE FROM VARIOUS DESTINATIONS THROUGH OUT THE COUNTRY. THE ASSES S EE S FIRST CONTENTION THAT HE IS ENGAGED IN CHEMI CALS BUSINESS AND IMPUGNED DEPOSITS ARE HIS BUSINESS TRANSACTIONS . WE FIND THIS PLEA TO BE A U - TURN TO THE EXPLANATION GIVEN BEFORE THE LOWER AUTHORITIES ATTRIBUTING T HE DEPOSITS MADE/CHEQUES CREDITED IN THE TWO BANK ACCOUNTS TO ASSESSEE S FRIENDS WHOSE N AMES EVEN HAVE NOT SEEN LIG HT OF THE DAY. THE ASSESSEE DOES NOT PLACE ANY SUPPORTIVE EVIDENCE AS WELL BY WAY OF RELEVANT BOOKS AND ACCOUNTS MAINTAINED WITH HIS SO - CALLED FRIENDS/CUSTOMERS ENGAGED IN CHEMICALS BUSINESS. WE REITERATE THAT IT IS OPEN FOR A N ASSESSEE TO T E NDER AN EXPLANATION ALONG WITH COGENT EVIDENCE IN SUPPORT THEREOF IS SUCH KIND OF PROCEEDINGS. HOWEVER, THE ONLY LIMITATION IS THAT THE SAME MUST HAVE ELEMENT OF GENUINENESS AND CREDITWORTHINESS TO FURTHER BUTTRESS ED BY IDENTITY OF THE PAR TI ES CONCERNED. NO SUCH COURSE OF ACTION HAS BEEN ADOPTED IN THE INSTANT I.T.A NO. 2767 /AHD /2014 A.Y. 2010 - 11 PAGE NO SHRI RAJESH DAHYABHAI PRAJAPTI VS. ITO 5 CASE. THE ASSESSEE S NEXT ARGUMENT OF HAVING CHARGED RS. 500/ - TO RS. 1000/ - IN EACH CASE ALSO SUFFERS FROM THE SAME LACUNA OF COGENT EVIDENT. WE FIND NO SUBSTANCE IN HIS ARGUMENT CH ALLENGING TH E IMPUGNED ADDITIONS ON MERITS. 6. THE ASSESSEE S NEXT ARGUMENT SEEK S TO INVOKE PEAK CREDIT PRINCIPLE IN THE IMPUGNED ADDITION. HIS CASE IS THAT THE RELEVANT CREDIT TRANSACTIONS HAVE CORRESPONDING DEBIT TRANSACTION S WHEREIN THE VERY AMOUNT H AS BEEN RE - DEPOSITED. WE FIND THE SAME TO BE ENTIRELY A MISCONCEIVED PLEA. WE REVERT BACK TO HIS EXPLANATION THAT HIS FRIENDS THROUGHOUT THE COUNTRY HAVE MADE THE IMPUGNED DEPOSITS/CREDITS WITHOUT SPECIFYING THEIR IDENTITY. THIS IS HIS CASE FROM THE BEG INNING T HAT HE HA D BEEN INVOLVED IN TRANSFERRING IN AND OUT THE VERY SUM OF MONEY. WE ARE OF THE O PINION IN THIS BACKDROP OF FACT THAT THIS THIRD PARTY INDULGENCE IN MAKING THE IMPUGNED CREDITS AND DEPOSITS FALSIFIES HIS ENTIRE EXPLANATION. IT GOES AG AINST THE BASIC TENET OF THE PEAK CREDIT PRINCIPLE WHEREIN AN ASSESSEE PROVES WITHDRAWAL AND RE - DEPOSITS OF VERY MONEY BY LINKING THE SAME THROUGH EVIDENCE OF BANK STATEMENT ETC. WE FIND NO MERIT IN THIS PEAK CREDIT AR GUMENT IN THESE FACTS AND CIRCUMSTANC ES . THE ASSESSE E S CASE LAW REFERRED TO DEAL WITH A SITUATION WHEREIN THE RELEVANT FACTS WOULD PROVE THE ABOVE STATED ESSENTIAL ARGUMENTS ON PEAK CREDIT PRI NCIPLE AS AGAINST THOSE INVOLVED IN THE INSTANT CASE. WE FIND NO FORCE IN THIS LATTER ARGUMENT. T HE SAME IS ACCORDINGLY REJECTED . THE CIT(A) S ORDER STANDS AFFIRMED. I.T.A NO. 2767 /AHD /2014 A.Y. 2010 - 11 PAGE NO SHRI RAJESH DAHYABHAI PRAJAPTI VS. ITO 6 7. THIS ASSESSEE S APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT AFTER CONCLUSION OF HEARING ON 03 - 03 - 2016. SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 03 /03 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,