ITO, New Delhi V. Sh. Rajender Dev Bhanot, New Delhi

ITA 2775/DEL/2012

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5555 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 12-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 06-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Peak credit
• Section: 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2775/DEL /2012 ASSESSMENT YEAR: 2008-09 INCOME TAX OFFICER, WARD 2(4), NEW DELHI. VS SHRI RAJENDER DEV BHANOT, 310-311, BHANOT CORNER, PAMPOSH ENCLAVE, GREATER KAILSAH-I, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ATIQ AHMAD, SR. DR RESPONDENT BY : NONE DATE OF HEARING: 15.01.2018 DATE OF PRONOUNCEMENT : 13.04.2018 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT A GAINST ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-V {CIT (A)}, NEW DELHI FOR ASSESSMENT YEAR 2008-09 WH EREIN, VIDE ORDER DATED 22.03.2012, THE LD. COMMISSIONER OF INC OME TAX (APPEALS) HAS ALLOWED RELIEF TO THE ASSESSEE BY DEL ETING ADDITION OF RS. 28,40,000/- MADE BY THE ASSESSING OFFICER U/S 6 8 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED 'THE ACT') AND ANOTHER ITA NO. 2775/DEL/2012 ASSESSMENT YEAR 2008-09 2 ADDITION OF RS. 5,60,000/- ON ACCOUNT OF UNEXPLAINE D CASH DEPOSITS. 2. BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF I NCOME WAS FILED DECLARING INCOME OF RS. 7,94,823/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. AS PER THE ANN UAL INFORMATION REPORT, THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS. 28,40,000/- IN THE SYNDICATE BANK ACCOUNT. THE ASSESSEE WAS ASKED TO PROVIDE COPIES OF ALL THE BANK ACCOUNT S AND ALSO EXPLAIN THE SOURCE OF AMOUNTS DEPOSITED IN THE BANK . AS PER THE ASSESSING OFFICER, ALTHOUGH THE ASSESSEE FILED BANK STATEMENTS OF SYNDICATE BANK, PUNJAB & SIND BANK AND STATE BANK O F INDIA, THE SOURCE OF CASH DEPOSITS REMAINED UNEXPLAINED. ACCORDINGLY, THE ASSESSING OFFICER MADE AN ADDITION OF RS. 28,40 ,000/- ON ACCOUNT OF DEPOSITS AS PER AIR, ADDITION OF RS. 9,2 0,000/- BEING CASH DEPOSITED IN SYNDICATE BANK, AN AMOUNT OF RS. 6,65,000/- BEING CASH DEPOSITED IN PUNJAB & SIND BANK. THE AS SESSMENT WAS COMPLETED AT AN INCOME OF RS. 52,19,823/-. 2.1 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. COMM ISSIONER OF INCOME TAX (APPEALS). THE LD. COMMISSIONER OF I NCOME TAX (APPEALS) DELETED THE ADDITION OF RS. 28,40,000/- B Y GIVING A FINDING THAT THERE WAS NO DEPOSIT OF RS. 28,40,000/ - IN SYNDICATE ITA NO. 2775/DEL/2012 ASSESSMENT YEAR 2008-09 3 BANK DURING THE YEAR UNDER CONSIDERATION. THE LD. CIT (A) ALSO GAVE RELIEF TO THE ASSESSEE IN RESPECT OF OTHER CAS H DEPOSITS OF RS. 15,85,000/- BY RESTRICTING THE ADDITION TO RS. 10,2 5,000/- ONLY. NOW THE DEPARTMENT HAS APPROACHED THE INCOME TAX AP PELLATE TRIBUNAL (ITAT) AND HAS CHALLENGED THE ACTION OF TH E LD. COMMISSIONER OF INCOME TAX (APPEALS) BY RAISING THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF R S. 28,40,000/- MADE BY ASSESSING OFFICER U/S 68 OF THE I.T.ACT ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. 2. THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRE D ON FACTS AND IN LAW IN DELETING ADDITION OF RS. 5,60,000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. 3. NONE WAS PRESENT ON BEHALF OF THE ASSESSEE/RESPO NDENT WHEN THE APPEAL WAS CALLED OUT FOR HEARING NOR WAS ANY APPLICATION FOR ADJOURNMENT RECEIVED ON BEHALF OF T HE ASSESSEE/RESPONDENT. A PERUSAL OF THE ORDER SHEET ENTRIES SHOWS THAT THIS APPEAL WAS FIRST FIXED FOR HEARING ON 23. 11.2015 AND, THEREAFTER, IT WAS ADJOURNED ON FOUR MORE DATES WIT H THE ASSESSEE/ RESPONDENT REMAINING UNREPRESENTED ON ALL THE DATES. THE NOTICES ISSUED BY THE REGISTRY OF THE ITAT WITH RESPECT TO THE ITA NO. 2775/DEL/2012 ASSESSMENT YEAR 2008-09 4 HEARING BEFORE THE TRIBUNAL HAVE ALSO BEEN RETURNED UN-SERVED AND HAVE BEEN PLACED ON RECORD. THEREFORE, GIVEN T HE FACT THAT THIS APPEAL IS MORE THAN FIVE YEARS OLD, WE DEEM IT EXPEDIENT TO HEAR THE APPEAL EX PARTE QUA THE ASSESSEE/RESPONDENT. 4. LD. SENIOR DEPARTMENTAL REPRESENTATIVE (SR. DR) READ OUT FROM THE ORDER OF ASSESSMENT AND SUBMITTED THAT THE ASSESSEE HAD BEEN UNABLE TO SUBSTANTIATE THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNTS AND, THEREFORE, THE ADDITION HAD BEEN RIGHTLY MADE BY THE ASSESSING OFFICER. THE LD. SR. DR VEHEMENTL Y ARGUED THAT THE DEMAND MADE BY THE LD. COMMISSIONER OF INCOME T AX (APPEALS) BE REVERSED. 5. WE HAVE HEARD THE LD. SR. DR AND ALSO PERUSED TH E MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) SHOWS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOTED THAT FROM A COPY OF THE BANK STATEMENT OF THE ASSESSEE WITH SYN DICATE BANK, IT IS SEEN THAT THERE WAS NO DEPOSIT OF CASH AMOUNT ING TO RS. 28,40,000/- DURING THE YEAR UNDER CONSIDERATION. T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO OBSER VED THAT AS PER THE ASSESSMENT ORDER ITSELF, THE TOTAL CASH DEP OSITS IN THE SYNDICATE BANK AMOUNTED TO RS. 9,20,000/- ONLY. TH E LD. ITA NO. 2775/DEL/2012 ASSESSMENT YEAR 2008-09 5 COMMISSIONER OF INCOME TAX (APPEALS) HAS GIVEN A FU RTHER FINDING THAT AFTER PERUSAL OF THE BANK ACCOUNT STATEMENTS O F THE SYNDICATE BANK AND THE PUNJAB & SIND BANK AS WELL A S THE CASH FLOW STATEMENT, IT IS SEEN THAT THE PEAK CREDIT WOR KED OUT TO RS. 10,25,000/- ONLY WHEREAS THE ADDITION ON ACCOUNT OF CASH DEPOSITS WAS OF RS. 15,85,000/-. THE LD. COMMISSIO NER OF INCOME TAX (APPEALS) HAS HELD THAT NOTHING BEYOND T HE PEAK CREDIT COULD HAVE BEEN ADDED BY THE ASSESSING OFFIC ER AND HE HAS RESTRICTED THE ADDITION TO RS. 10,25,000/- ONLY. T HE LD. SR. DR COULD NOT POINT OUT ANY FACTUAL INACCURACY IN THIS WORKING BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). IT IS UN DISPUTED THAT THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS. 28,40,000/- ON THE BASIS OF INFORMATION RECEIVED FROM ANNUAL IN FORMATION REPORT BUT THIS INFORMATION WAS INCORRECT INASMUCH AS THERE WERE CASH DEPOSITS OF RS. 15,85,000/- ONLY IN THE T WO BANK ACCOUNTS OF THE ASSESSEE. THUS, THIS ADDITION OF R S. 28,40,000/- HAS BEEN RIGHTLY DELETED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND WE FIND NO REASON TO INTERFERE WITH T HE FINDINGS IN THIS REGARD. 5.1 AS FAR AS THE ACTION OF THE LD. CIT (A) IN REST RICTING THE ADDITION TO RS. 10,25,000/- ONLY, BEING THE PEAK CR EDIT, IN BOTH ITA NO. 2775/DEL/2012 ASSESSMENT YEAR 2008-09 6 THE BANK ACCOUNTS IS CONCERNED, IT IS SEEN THAT IT IS UNDISPUTED THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF T HESE DEPOSITS. THE ASSESSEE HAS ALSO NOT MADE ANY CLAIM THAT THE D EPOSITS PERTAINED TO THE TURNOVER OF HIS BUSINESS. THE HON BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VIJAY AGRICULTURA L INDUSTRIES REPORTED IN 294 ITR 610 (ALLD.) HAS HELD THAT THE P RINCIPLE OF PEAK CREDIT IS NOT APPLICABLE IN CASE WHERE THE DEPOSITS REMAINED UNEXPLAINED UNDER SECTION 68 OF THE ACT. THE HONBL E DELHI HIGH COURT HAS FOLLOWED THIS JUDGMENT IN THE CASE OF CIT VS. DK GARG IN JUDGMENT DATED 4 TH AUGUST 2017 IN ITA 115/2005. ACCORDINGLY, WE ARE UNABLE TO CONCUR WITH THE FINDI NGS OF THE LD. CIT (A) ON THIS ISSUE AND WE RESTORE THE ORIGINAL A DDITION OF RS. 15,85,000/- AS REMAINING UN-SUBSTANTIATED BY THE AS SESSEE. 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT STAN DS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.04.2018. SD/- SD/- (PRASHANT MAHARISHI) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 13.04.2018 GS ITA NO. 2775/DEL/2012 ASSESSMENT YEAR 2008-09 7 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR