The ITO, Ward-11(3), Ahmedabad V. Shri Arvindbhai Chandulal Shah, Ahmedabad

ITA 2788/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6126 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 09-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SOURYAVANSHI
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI G.D. AGARWAL, VICE-PRESIDENT (AZ) AND SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER DATE OF HEARING : 30/06/2011 DRAFTED ON: 01/0 7/2011 ITA NO.2788/AHD/2009 ASSESSMENT YEAR : 2006-07 THE ITO WARD-11(3) AHMEDABAD VS. SHRI ARVINDBHAI CHANDULAL SHAH C-63, VIMALNATH SOCIETY OPP.JAIN DERASAR BAPUNAGAR, AHMEDABAD PAN/GIR NO. : AFSPS 6636 P (APPELLANT) .. (RESPONDENT) AND CO NO.263/AHD/2009 A.Y. 2006-07 (ARISING OUT OF ITA NO.2788/AHD/2009) SHRI ARVINDBHAI CHANDULAL THE ITO SHAH, AHMEDABAD VS. WARD-11(3) , AHMEDABAD (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : SHRI G.S. SOURYAVANSHI, SR. D.R. ASSESSEE BY: SHRI ASEEM THAKKAR O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THE REVENUE IS IN APPEAL AND THE ASSESSEE IS IN C ROSS OBJECTION ARISING FROM THE ORDER OF THE LD.CIT(A)-XVI, AHMEDA BAD DATED 31/07/2009. RELEVANT GROUNDS RAISED BY THE REVENU E ARE HEREBY DECIDED AS FOLLOWS:- (1) THE LD. CIT(A) ERRED IN FACTS AND ON LAW IN DI RECTING THE A.O. TO WORKED OUT THE PEAK IN RESPECT OF UNEXPLAINED BANK DEPOSIT AMOUNTING TO RS.27,34,639/-. ITA NO.2788/AHD/2009(BY REVENUE) & CO NO.263/AHD/2009 (BY ASSESSEE) ITO VS. SH.ARVINDBHAI CHANDULAL SHAH ASST.YEAR 2006-07 - 2 - (2) THE LD. LEARNED CIT(A) HAS FAILED TO ANALYZE AN D APPRECIATE THAT THE WITHDRAWALS FROM BANK BY CHEQUE AND DEPOSITS ON SUBSEQUENT DATE ARE NOT IDENTICAL AMOUN T AND HENCE, CIT(A) HAS ERRED IN DIRECTING PEAK TO BE ADO PTED AS UNEXPLAINED INVESTMENTS WITHOUT VERIFYING WHETHER T HE SAME HAS COME BACK OR IT IS A DIFFERENT CREDIT/DEPOSIT A LTOGETHER. (3) THE LD. CIT(A) HAS ERRED IN DIRECTING TO TAKE PEAK CASH DEPOSITS IN BANK ACCOUNT AS INCOME WITHOUT VERIFICA TION OF ASSESSEES CLAIM THAT THE EARLIER WITHDRAWAL HAS NO T UTILIZED FOR THE PURPOSE FOR WHICH IT WAS WITHDRAWN AND WAS AVAILABLE FOR HIM TO REINTRODUCE/REDEPOSIT IN THE B ANK. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) R.W.S. 144 OF THE IT ACT, 1961 DATED 04/11/2008 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS IN MONEY LENDING BUSINESS. THE AO HAS ISSUED FEW NOTICES, HOWEVER, EITHER REMA INED UNATTENDED OR ADJOURNMENT SOUGHT BY THE ASSESSEE. THEREAFTER, T HE AO HAS PROCEEDED TO COMPLETE THE ASSESSMENT AND IN THIS REGARD HE HA S CALLED FOR THE DETAILS FROM A BANK, VIZ. NUTAN NAGARIK SAHAKARI BANK LTD. A/C.NO.5739, AHMEDABAD. THE SAID BANK HAD SUBMITTED THE DETAILS . ON THE BASIS OF THE INFORMATION RECEIVED FROM THE SAID BANK, THE AO HAS HELD THAT THE TOTAL DEPOSITS IN THE SAID ACCOUNTS AMOUNTING TO RS .27,34,639/- REMAINED UNEXPLAINED, THEREFORE, TAXED IN THE HANDS OF THE A SSESSEE. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. BEFORE LD.CIT(A), REASON FOR NON-APPEARANCE OF T HE AO WERE FURNISHED ALONG WITH THE EXPLANATION OF THE ASSESSE E IN RESPECT OF THE IMPUGNED ADDITION. AFTER CONSIDERING THE FACTS O F THE CASE, LD.CIT(A) HAS HELD AS UNDER:- ITA NO.2788/AHD/2009(BY REVENUE) & CO NO.263/AHD/2009 (BY ASSESSEE) ITO VS. SH.ARVINDBHAI CHANDULAL SHAH ASST.YEAR 2006-07 - 3 - 4.1. I HAVE CONSIDERED THE SUBMISSIONS MADE AS ABO VE. IN MY OPINION, THE APPELLANT COULD NOT EXPLAIN ANY REASON AS TO WHY THE PAPERS WHICH ARE BEING PRODUCED BEFORE ME NOW WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER WHO HAD GIVEN ABOUT 12 OPPORTUNITIES TO THE APPELLANT. THEREFORE THE ADDI TIONAL EVIDENCES SUBMITTED BEFORE ME IN THE FORM OF CASH BALANCE AVA ILABLE, STATEMENTS ETC. ARE NOT ACCEPTED. THE ASSESSING OF FICER IN THE ASSESSMENT ORDER HAS MENTIONED THAT THIS BANK ACCOU NT HAS BEEN USED BY THE ASSESSEE IN MAKING THE INVESTMENT IN SH ARES WHICH WERE MAINLY PURCHASED FROM THE PRIMARY MARKET. USU ALLY DURING THIS PERIOD IT TOOK APPROX 20 TO 40 DAYS FROM THE D ATE OF MAKING THE APPLICATION OF SHARES TILL THE DATE OF REFUNDS OF THE AMOUNT IN CASE SHARES ARE NOT ALLOTTED IN IPO. THEREFORE, IT WOULD BE FAIR TO HOLD THAT AN THE AVERAGE 30 DAYS TIME IS TAKEN FROM ISSUING A CHEQUE FOR INVESTMENT IN IPO TO THE DATE OF REFUND OF THE CHEQUE. IF NO SHARES ARE ALLOTTED. INSTEAD OF MAKING THE A DDITION OF ALL THE CHEQUE DEPOSITS THE ASSESSING OFFICER IS DIRECTED TO WORK OUT THE PEAK ON 30 DAY BASIS IN RESPECT OF THE ENTRIES MADE BY CHEQUE IN THE BANK ACCOUNT . IN OTHER WORDS, IF CHEQUE IS ISSUED ON DAY ONE FOR RS.50,000/- AND IT IS RECEIVED BACK ON OR AFTER 31 ST DAY THEN IT IS PRESUMED THAT THE DEPOSITS ON OR AFTER 31 ST DAY IS OUT OF THE CHEQUE ISSUED ON 1 ST DAY AND SO ON. THE ASSESSING OFFICER WOULD THEREF ORE COMPUTE THE PEAK AND ASSESS THE PEAK AMOUNT AS THE INCOME OF THE APPELLANT. 4.2. AS REGARDS THE CASH DEPOSITS, THE ASSESSING OF FICER WILL HAVE TO CONSIDER PEAK ON DAY TO DAY BASIS AS THE INCOME OF THE APPELLANT. IN OTHER WORDS, IN RESPECT OF ENTRIES I N BANK ACCOUNT BY CHEQUE THE PEAK OF THE 30 DAYS AND IN RESPECT OF TH E CASH ENTRIES PEAK ON DAILY BASIS IS TO BE WORKED OUT AND THE SAM E IS TO BE TREATED AS INCOME OF THE APPELLANT. 4. FROM THE SIDE OF THE REVENUE, LD.DR MR. G.S. SOU RYAVASHI AND FROM THE SIDE OF THE RESPONDENT-ASSESSEE MR.ASEEM T HAKKAR APPEARED ITA NO.2788/AHD/2009(BY REVENUE) & CO NO.263/AHD/2009 (BY ASSESSEE) ITO VS. SH.ARVINDBHAI CHANDULAL SHAH ASST.YEAR 2006-07 - 4 - AND THEY HAVE RESPECTIVELY PLACED RELIANCE ON THE O RDERS OF THE AO & LD.CIT(A). 5. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES. ONCE THE ADMITTED FACTUAL POSITION WAS THAT THERE WAS ROTATION OF FUN DS BEING APPLIED IN IPOS OR OTHER ALLIED ACTIVITIES, THEREFORE, ON DUE CONSIDERATION OF THE FACTS OF THE CASE AS GATHERED FROM THE ORDERS OF TH E AUTHORITIES BELOW, WE ARE OF THE VIEW THAT LD.CIT(A) WAS JUSTIFIED IN DIR ECTING THE AO TO COMPUTE THE PEAK AMOUNT AS APPEARING IN THE SAID BA NK ACCOUNT AND ACCORDINGLY TO BE TAXED IN THE HANDS OF THE ASSESSE E. WE FIND NO FALLACY IN THE DIRECTIONS OF LD.CIT(A), INTER-ALIA REPRODUC ED AND HENCE AFFIRM THE SAME. RESULTANTLY, THIS GROUND OF THE REVENUE IS DISMISSED. 6. REST OF THE GROUNDS OF THE REVENUE ARE GENERAL I N NATURE, THEREFORE NEED NO INDEPENDENT LEGAL ADJUDICATION. RATHER WE H AVE NOTICED THAT AN ALTERNATE CLAIM OF THE ASSESSEE NOT TO TAX THE IMPU GNED AMOUNT FOUND DEPOSITED IN THE BANK IN THE HANDS OF THE ASSESSEE BUT TO TAX AS AOP; HAS ALREADY BEEN REJECTED BY THE LD.CIT(A), THEREFORE, REVENUE SHOULD NOT HAVE ANY GRIEVANCE IN THIS REGARD. SUCH GROUND IS M ISCONCEIVED AND DISMISSED. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ASSESSEES CO NO.263/AHD/2009 A.Y. 2006-07 (ARISI NG OUT OF ITA NO.2788/AHD/2009 A.Y. 2006-07) ITA NO.2788/AHD/2009(BY REVENUE) & CO NO.263/AHD/2009 (BY ASSESSEE) ITO VS. SH.ARVINDBHAI CHANDULAL SHAH ASST.YEAR 2006-07 - 5 - 8. AS FAR AS THE ASSESSEES CROSS OBJECTION IS CONC ERNED, SEVERAL GROUNDS HAVE BEEN RAISED PRIMARILY REVOLVING AROUND THE EX-PARTE ORDER PASSED U/S.144 OF THE ACT CONFIRMED BY THE LD.CIT(A ). WE FIND NO FORCE IN THESE GROUNDS OF THE CROSS OBJECTOR. IN THE CRO SS OBJECTION THERE IS AN ALTERNATE PLEA TO TAX THE CREDITS IN THE BANK ACCOU NT AS AOP, HOWEVER , THE SAID PLEA OF THE ASSESSEE HAD ALREADY BEEN DISM ISSED BY THE LD.CIT(A) AND WE HAVE ALREADY AFFIRMED THOSE FINDIN GS. THEREFORE, WE FIND NO FORCE IN THIS CROSS OBJECTION, WHICH WAS OT HERWISE NOT SERIOUSLY CONTESTED BY THE RESPONDENT-ASSESSEE. THE CROSS OB JECTION IS, THEREFORE, DISMISSED. 9. IN THE RESULT, REVENUES APPEAL AS WELL AS THE CRO SS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 8 TH JULY, 2011. SD/- SD/- ( G.D. AGARWAL ) ( MUKUL KR. SHRAW AT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 8 / 7 /2011 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED. 4. THE LD. CIT(APPEALS)- XVI, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD ITA NO.2788/AHD/2009(BY REVENUE) & CO NO.263/AHD/2009 (BY ASSESSEE) ITO VS. SH.ARVINDBHAI CHANDULAL SHAH ASST.YEAR 2006-07 - 6 - 1. DATE OF DICTATION.. 30.6.2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30.6.2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S8.7.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8.7.11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER