ITO, Sawai Madhopur V. SMT SUSHMA JINDAL, KARAULI

ITA 281/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5623 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 18-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PURUSHOTTAM KASHYAPAD CIT DHK
• Keywords: Peak credit
• Section: 143(3); 69; 6

Judgement Text

ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO. 281/JP/13 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR 2009-10 THE ITO, WARD-3, SAWAI MADHOPUR CUKE VS. SMT. SUSHMA JINDAL W/O SH. MADAN MOHAN JINDAL, SAINATH KHIDKIYA, KARAULI ` LFKK;H YS[KK LA - @THVKBZVKJ LA - @ PAN NO. AIHPJ 4408 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ CO NO. 31/JP/13 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR 2009-10 SMT. SUSHMA JINDAL W/O SH. MADAN MOHAN JINDAL, SAINATH KHIDKIYA, KARAULI CUKE VS. THE ITO, WARD-3, SAWAI MADHOPUR ````````````````````LFKK;H YS[KK LA - @THVKBZVKJ LA - @ PAN NO. AIHPJ 4408 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI PURUSHOTTAM KASHYAP(AD.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05.11.2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 05 /01/2016 VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AND THE CRO SS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), KOTA DATE D 24,01,2013 WHEREIN THE REVENUE HAS TAKEN THE FOLLOWING GROUND: ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 2 ON THE FATS AND IN THE CIRCUMSTANCES O THE CASE TH E LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 40,39,131/- OUT OF TOT AL ADDITION AT RS. 49,45,919./- ON ACCOUNT OF UNEXPLAINED DEPOSITS IN THE SAVING BANK ACCOUNT. THE GROUND TAKEN BY THE ASSESSEE IN ITS CROSS OBJEC TION AS UNDER: (I) THE LD. CIT(A) HAS ERRED IN LAW IN CONFIRMING THE ADDITION OF RS. 9,33,788/- ON ACCOUNT OF PEAK DEPOSIT IN THE BANK A CCOUNT OF THE ASSESSEE BY HOLDING THE SAME AS UNEXPLAINED INCOME OF THE A SSESSEE. HE HAS ALSO IGNORED THE FACT THAT THE AMOUNT DEPOSITED IN THE BANK ACCOUNT IS FROM THE AMOUNT RECEIVED FROM THE CUSTOMERS & THEREFORE THE SAME NOT THE INCOME OF THE ASSESSEE. (II) THE LD. CIT(A) HAS ERRED ON THE FACTS AND IN LAW IN NOT CONSIDERING THE FACT THAT WHEN THE AO HAS ASSESSED THE COMMISSION INCOM E ON THESE TRANSACTIONS IN THE BANK ACCOUNT THE PEAK DEPOSIT IN THE BANK ACCOUNT CANNOT BE CONSIDERED AS UNEXPLAINED INCOME OF THE ASSESSEE. HE HAS FURTHER ERRED IN NOT ALLOWING THE SET OFF OF INCOM E SO ASSESSED AGAINST THE ADDITION OF PEAK DEPOSIT CONFIRMED BY HIM. 2. THE ASSESSEE IS AN INDIVIDUAL WHO HAS EARNED I NCOME FROM COMMISSION AGENCY AND FILED ITS RETURN OF INCOME DECLARING INC OME OF RS. 1,38,110/- WHICH WAS SELECTED FOR SCRUTINY AND ASSESSMENT ORDER WAS PASSED U/S 143(3) DATED 23.12.2011. DURING THE COURSE OF ASSESSMENT PROCEED INGS, THE AO ADDED THE AMOUNT OF RS. 49,72,919/- U/S 69A OF THE ACT 1961 U PHOLDING THE SAME IN NATURE OF UNEXPLAINED DEPOSITS. 2.1 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATT ER IN APPEAL BEFORE THE LD.CIT(A) WHO INVOKED THE THEORY OF PEAK CREDIT AN D HELD THAT THE ENTIRE AMOUNT OF BANK DEPOSITS CANNOT BE ADDED IN THE HANDS OF T HE ASSESSEE AND ONLY THE AMOUNT OF RS. 9,33,788/- AS DETERMINED BY HIM BEING PEAK AMOUNT OF BANK BALANCE SHOULD BE ADDED IN THE HANDS OF THE ASSESSE E. 2.2 AGAINST THE SAID ORDER OF THE LD. CIT(A), THE R EVENUE IS IN APPEAL AND AT THE SAME TIME THE ASSESSEE IN HIS CROSS OBJECTION I S CONTESTING THE ADDITION OF ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 3 RS. 9,33,788/- ON ACCOUNT OF PEAK DEPOSIT AND SECON DLY NOT ALLOWING THE SET OFF THE COMMISSION INCOME AGAINST THE ADDITION OF PEAK DEPOSIT CONFIRMED BY THE LD. CIT(A). 2.3 DURING THE COURSE OF HEARING, THE LD.AR REITERA TED ITS SUBMISSION MADE BEFORE THE LD. CIT(A) AND ALSO BROUGHT TO THE NOTIC E OF THE BENCH, THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF SI ND MEDICAL STORE VS. CIT 117 DTR(RAJ) 78. 2.4 THE FINDING OF THE LD. CIT(A) ARE CONTAINED AT PARA 4.22 WHICH READS AS UNDER; I HAVE GONE THROUGH ASSESSING OFFICERS FINDINGS AND ASSESSEES SUBMISSIONS. IN MY VIEW ADDITION OF ENTI RE AMOUNT OF BANK DEPOSITS WAS NOT CORRECT. IN THE GIVEN CIRCUMS TANCES ONE HAS TO APPLY PEAK THEORY. IN THE CASE OF PEAK AMOUN T OF BANK BALANCE WAS RS. 5,33,763/- ON 19.02.2009. HOWEVER, THERE WAS A DEBIT ENTRY OF RS. 4,00,02/- ON 18.02.2009. THIS AMOUNT WAS PAID BY CHEQUE TO HEM MULTI COMMODITIES PVT. LTD. A ND IT CANNOT BE PRESUMED THAT THE SAME AMOUNT WAS RECEIVE D BACK ON THE SAME DAY AND WAS AVAILABLE FOR DEPOSIT OF RS . 4,10,000/- (DEPOSITED ON THE SAME DAY). THEREFORE THE PEAK COM ES TO RS. 5,33,763/- + 4,00,025/- = 9,33,788/-. THEREFORE ADD ITION OF RS. 9,33,788/- IS CONFIRMED. THE ASSESSING OFFICER IS D IRECTED TO DELETE THE BALANCE ADDITION OF RS. 40,39,131/-. 2.5 THE LD. DR RELIED ON THE ORDER O THE LOWER A UTHORITIES 2.6 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LIMITED ISSUE UNDER DISPUT E RELATES TO SOURCE OF DEPOSIT OF RS.49,72,919/- IN TWO BANK ACCOUNTS MAIN TAINED BY THE ASSESSEE. AS PER THE AO, THE ASSESSEE FAILED TO PROVE THE S OURCE OF THE DEPOSITS AND GIVEN THAT, THE SAME HAS BEEN BROUGHT TO TAX U/S 6 9 OF THE ACT. AS PER THE ASSESSEE, SHE HAS STARTED THE ACTIVITY OF COMMISSIO N AGENT DURING THE YEAR UNDER CONSIDERATION AND PRIOR TO THAT, SHE HAS NO O THER SOURCE OF INCOME AND ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 4 WHATEVER INCOME, SHE HAS EARNED, THE SAME HAS BEEN DULY DISCLOSED IN THE RETURN OF INCOME. REGARDING THE DEPOSITS IN THE TW O BANK ACCOUNTS IT WAS SUBMITTED THE SAME BELONGS TO HER CUSTOMERS FROM WH OM SHE HAS COLLECTED THE MARGIN MONEY AND THEREAFTER THE SAID MONEY WAS REMITTED TO M/S HEM MULTI COMMODITIES PVT. LTD. AND SUBSEQUENTLY WHEN T HE MONEY WAS REFUNDED BY HEM MULTI COMMODITIES PVT. LTD., THE SAME WAS DE POSITED IN THE BANK ACCOUNT, LATERON WITHDRAWN AND REFUNDED TO THE CUST OMERS OF THE APPELLANT. HENCE ACCORDINGLY THE SAID MONEY BELONG TO HER CUS TOMERS WHICH HAVE BEEN ROTATED AND INVESTED FROM TIME TO TIME. FURTHER SH E HAS NOT KEPT THE DETAILS OF PERSONS ON WHOSE BEHALF SHE HAS DEPOSITED THE MONEY , THE SAME CANNOT BE THE BASIS FOR ADDING THE WHOLE OF THE DEPOSITS IN H ER ACCOUNT AS UNEXPLAINED. ALTERNATELY, SHE HAS SUBMITTED THAT THEORY OF PEAK CREDIT SHOULD BE APPLIED AND GIVEN THE FACT THAT SHE HAS ALREADY OFFERED HER COMMISSION INCOME EARNED DURING THE YEAR, THE CREDIT OF THE INCOME SHOULD B E ALLOWED IN HER HANDS BY ADOPTING WELL ACCEPTED TELESCOPING THEORY. 2.7 IT IS NOT IS DISPUTE THAT ASSESSEE HAS STARTED THE BUSINESS OF COMMISSION AGENT DURING THE YEAR UNDER CONSIDERATI ON AND SHE HAS NO OTHER SOURCE OF INCOME. REGARDING DEPOSIT OF MONEY AND W ITHDRAWAL THEREOF FROM TIME TO TIME, SHE HAS EXPLAINED THE MODES OPERANDI OF HER TRANSACTION WITH HEM MULTI COMMODITIES PVT. LTD. WHICH HAS BEEN ACCE PTED BY LD. CIT(A). AT THE SAME TIME, THE LD. CIT(A) HAS APPLIED PEAK THEO RY. IN OUR VIEW, EVEN THOUGH THE MONEY BELONGS TO HER CUSTOMERS, GIVEN TH E MULTIPLICITY OF TRANSACTIONS IN TERMS OF DEPOSITS AND WITHDRAWAL AN D IN ABSENCE OF IDENTIFIABLE ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 5 TRANSACTIONS FOR SPECIFIC CUSTOMERS, LD. CIT(A) HAS RIGHTLY APPLIED THE THEORY OF PEAK CREDIT AS THE SAME APPEARS TO BE ONLY REASONAB LE AND RATIONAL BASIS TO BRING THE AMOUNT TO TAX. WE THEREFORE CONFIRM THE AMOUNT OF RS. 9,33,788/- AS PEAK CREDIT WHICH SHOULD BE BROUGHT TO TAX IN HAN DS OF THE ASESSEE. FURTHER, GIVEN THE UNDISPUTED FACT THAT THIS PEAK CREDIT REL ATES TO COMMISSION ACTIVITY UNDERTAKEN BY THE ASSESSEE AND ASSESSEE HAS ALREADY OFFERED ITS COMMISSION INCOME AS PART OF ITS RETURN OF INCOME, THE ASSESS EE CANNOT BE ASKED TO PAY TAX TWICE ON THE SAME INCOME. THEREFORE, BY ADOPTI NG THE TELESCOPING THEORY, THE AO IS DIRECTED TO ALLOW CREDIT OF THE COMMISSIO N INCOME ALREADY BROUGHT TO TAX AS OFFERED IN RETURN OF INCOME BY THE ASSESSEE. HENCE, GROUND TAKEN BY REVENUE AND GROUND NO.1 OF THE ASSESSEE IS DISMISSE D WHILE GROUND NO.2 OF ASSESSEE IS ALLOWED. 2.7 IN THE RESULT APPEAL OF REVENUE IS DISMISSED A ND APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 /01/2 016. SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 05 /01 /2016 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 6 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ITO, WARD-3, SAWAI MADHOPUR 2. THE RESPONDENT- SMT. SUSHMA JINDAL 3. THE CIT(A), KOTA 4. THE CIT, KOTA 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO.281/JP/13) S'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT REGISTRAR. ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 7 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 8 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 9 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 10 05.11.2015 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : /11/2015. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 11 THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), ALWAR DATED 18.11.2013 WHEREIN THE REVENUE HAS TAKEN THE FOLLOWING TWO GROUNDS: 1. THAT THE CIT(A) ALWAR HAS ERRED IN LAW AS WELL A S ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS. 14,39,552/- MADE BY THE AO ON A/C OF DAMAGE/SHORTAG E OF INVENTORY CLAIMED. 2. THE LD. CIT(A), ALWAR HAS ERRED IN LAW AS WELL A S ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN ALLOWING THE CLAIM OF ACTUAL WRITTEN ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 12 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 13 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 14 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 15 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 16 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 17 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 18 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 19 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 20 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 21 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 22 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 23 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 24 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 25 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 26 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 27 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 28 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 29 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 30 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 31 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 32 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 33 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 34 ITA NO. 281/JP/13 & CO. 312/JP/13 ITO WARD 3, SAWAI MADHOUR 35