Abdul Majed., Malda V. I.T.O Wd - 1,Malda, Malda

ITA 292/KOL/2013

• Counselvise Citation: 29223514 RSA 2013
• Duration Of Justice: 2 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 12-02-2013
• Court: TRIBUNAL
• Assessee Lawyers: RAJEEVA KUMAR
• Keywords: Business income; Salary income; Peak credit

Judgement Text

I.T.A. NO. 292/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 292 /KOL/ 2013 ASSESSMENT YEAR: 2009-2010 ABDUL MAJED,....................................... ................................APPELLANT C/O. SSE/DSL/MLDT, NF RAILWAY, JHALJHALIA, MALDA-732 102 [PAN : AHJPM 7274 Q] -VS.- INCOME TAX OFFICER,................................ ............................RESPONDENT WARD-1, MALDA, NETAJI MARKET COMPLEX, RATHBARI, P.O. & DIST. MALDA-732 101 APPEARANCES BY: SHRI RAJEEVA KUMAR, ADVOCATE, FOR THE ASSESSEE SHRI RAJAT KUMAR KUREEL, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MAY 10, 2016 DATE OF PRONOUNCING THE ORDER : MAY 11, 2016 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), JALPAIGURI DA TED 14.11.2012 AND THE GROUNDS RAISED BY THE ASSESSEE THEREIN READ AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEALS) IS WRONG AND UNJUSTIFIED IN UPHOLDI NG THE ORDER OF THE ASSESSING OFFICER CONFIRMING ADDITIONS MADE BY THE AO. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEALS) HAS FAILED TO APPRECIATE THAT THE D EPOSITS SHOWN IN THE BANK ACCOUNT WERE NOTHING BUT THE SAVINGS OF THE ASSESSEE MADE DURING THE PERIOD OF HIS EMPLOYMENT. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE NEITHER THE AO NOR THE LD. CIT(A) ACCEPTED THE PURPOSE OF WITHDRAW AL AND RE- DEPOSIT THE SAME AS CLARIFIED/EXPLAINED BY THE ASSE SSEE, WHICH I.T.A. NO. 292/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 5 WAS FOR PURCHASING A PLOT OF RESIDENTIAL LAND. DEAL WAS MADE AND THE CASH WAS KEPT READY BY WITHDRAWING FROM THE BAN K BUT WHEN IT WAS NOT MATURED, THE AMOUNT SO WITHDRAWN WAS RE- DEPOSITED INTO THE BANK AND SO ON. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED WHILE CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS. 8,20,000/- BEING PEAK CREDIT OF THE BANK ACCOUNT BY INVOKING PROVISIONS OF SECTION 69A OF THE ACT. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS MISUNDERSTOOD THE FACTS OF THE CASE AND THUS PR OCEEDED TO CONFIRM THE BUSINESS INCOME OF RS. 1,33,814/- AS DE TERMINED BY THE AO ON ESTIMATE @5% ON THE GROSS DEPOSIT MADE IN TO THE BANK WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE WAS A SALARIED EMPLOYEE AND HAD NO BUSINESS ACTIVITY IN ANYWAY. 6. THAT, WITHOUT PREJUDICE, IN ANY VIEW OF THE MATT ER AND ALTERNATIVELY, THE LD. CIT(A) HAS ERRED FOR NOT APP RECIATING AND IN SUMMARILY REJECTING THE SUBMISSION AND THE VARIO US DOCUMENTS AND EVIDENCE PLACED BEFORE HIM WHILE ACCE PTING THE LOP-SIDED AND FACTUALLY INCORRECT ACTION OF THE LD. AO. 2. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE , GROUNDS NO. 1, 2, 3, 6 & 7 RAISED BY THE ASSESSEE IN THIS APPEAL ARE GENERAL, WHICH DO NOT CALL FOR ANY SPECIFIC ADJUDICATION. AS FURTHER SUBM ITTED BY HIM, THE ASSESSEE IS NOT INTERESTED IN PRESSING GROUND NO. 4 RAISED IN THIS APPEAL, THE SAME IS ACCORDINGLY DISMISSED AS NOT PRESSED. 3. THE ONLY ISSUE THAT SURVIVES FOR CONSIDERATION N OW AS RAISED IN GROUND NO. 5 RELATES TO THE ADDITION OF RS.1,33,814 /- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPE ALS) BY ESTIMATING THE INCOME OF THE ASSESSEE BY APPLYING THE PROFIT RATE OF 5% ON THE DEPOSITS FOUND TO BE MADE BY THE ASSESSEE IN HIS BANK ACCOUN T. I.T.A. NO. 292/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 5 4. THE RELEVANT FACTS OF THE CASE APROPOS THIS ISSU E ARE THAT THE ASSESSEE IS AN INDIVIDUAL, WHO DERIVES INCOME FROM SALARY AS AN EMPLOYEE OF INDIAN RAILWAY. THE RETURN OF INCOME FOR THE YEA R UNDER CONSIDERATION WAS FILED BY HIM ON 03.11.2009 DECLARING TOTAL INCO ME OF RS.1,58,140/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER FOUND THAT THE BANK ACCOUNT WAS MAINTAINED BY THE ASSESSE E WITH AXIS BANK AND TOTAL DEPOSITS AGGREGATING TO RS.26,76,287/- WERE M ADE IN THE SAID ACCOUNT. SINCE THE ASSESSEE COULD NOT OFFER ANY SAT ISFACTORY EXPLANATION AS REGARDS THE SAID DEPOSIT, THE PEAK CREDIT APPEAR ING IN THE BANK ACCOUNT OF THE ASSESSEE AT RS.8,20,000/- WAS ADDED BY THE A SSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE. HE ALSO HELD THAT THE TRANSACTIONS APPEARING IN AXIS BANK ACCOUNT REPRESENTED BUSINESS TRANSACTI ONS OF THE ASSESSEE AND PROFIT FROM THE SAID TRANSACTIONS ESTIMATED BY APPLYING THE RATE OF 5% AT RS.1,33,814/- WAS ADDED BY THE ASSESSING OFFI CER TO THE TOTAL INCOME OF THE ASSESSEE. 5. ON APPEAL, THE LD. CIT(APPEALS) UPHELD THE ACTIO N OF THE ASSESSING OFFICER IN MAKING THE ADDITION ON ACCOUNT OF PEAK C REDIT IN PRINCIPLE. BUT SINCE SUCH PEAK CREDIT, ACCORDING TO HIM, WAS MORE THAN WHAT WAS WORKED OUT BY THE ASSESSING OFFICER, THE LD. CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE PEAK CREDIT. HE ALSO CONF IRMED THE ADDITION OF RS.1,33,814/- MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF ESTIMATED PROFIT FROM THE BU SINESS TRANSACTIONS ALLEGEDLY REFLECTED IN THE BANK ACCOUNT OF THE ASSE SSEE WITH AXIS BANK. 6. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS ALREADY N OTED, THE RELEVANT GROUND RAISING THE ISSUE OF PEAK CREDIT HAS NOT BEE N PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEF ORE ME. HE, HOWEVER, HAS STRONGLY CHALLENGED THE ADDITION MADE ON ACCOUN T OF ESTIMATED PROFIT BY SUBMITTING THAT ONCE THE PEAK CREDIT BALANCE APP EARING IN THE BANK I.T.A. NO. 292/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 5 ACCOUNT OF THE ASSESSEE WITH AXIS BANK IS TREATED A S THE INCOME OF THE ASSESSEE, THERE IS NO JUSTIFICATION TO AGAIN MAKE A DDITION ON ACCOUNT OF ESTIMATING PROFIT BY TREATING THE TRANSACTIONS REFL ECTED IN THE SAID BANK ACCOUNT AS BUSINESS TRANSACTION OF THE ASSESSEE. MO REOVER, AS RIGHTLY SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS AN EMPLOYEE WITH INDIA N RAILWAYS AND IN THE ABSENCE OF ANY EVIDENCE BROUGHT ON RECORD BY TH E ASSESSING OFFICER TO SHOW THAT HE WAS INDULGING IN ANY BUSINESS ACTIVITY , THERE IS NO JUSTIFICATION IN TREATING THE TRANSACTIONS APPEARIN G IN THE BANK ACCOUNT OF THE ASSESSEE AS BUSINESS TRANSACTION AND MAKING ADD ITION ON ACCOUNT OF PROFIT FROM SUCH TRANSACTIONS ON ESTIMATED BASIS BY APPLYING PROFIT RATE OF 5%. IN MY OPINION, WHAT IS WARRANTED IN THE FACT S AND CIRCUMSTANCES OF THE CASE IS TO MAKE AN ADDITION ON ACCOUNT OF PEAK CREDIT APPEARING IN THE BANK ACCOUNT OF THE ASSESSEE WITH AXIS BANK AND THE ADDITION MADE ON ACCOUNT OF BUSINESS PROFIT IS PURELY BASED ON ASSUM PTIONS AND SURMISES, WHICH CANNOT BE SUSTAINED. ACCORDINGLY, I DELETE TH E ADDITION OF RS.1,33,814/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) TO THE INCOME OF THE ASSESSEE ON ACCOU NT OF ESTIMATED PROFIT AND ALLOW GROUND NO. 5 OF THE ASSESSEES APP EAL. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 11, 2016. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 11 TH DAY OF MAY, 2016 COPIES TO : (1) SHRI ABDUL MAJED, C/O. SSE/DSL/MLDT, NF RAILWAY, JHALJHALIA, MALDA-732 102 (2) INCOME TAX OFFICER, WARD-1, MALDA, NETAJI MARKET COMPLEX, I.T.A. NO. 292/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 5 OF 5 RATHBARI, P.O. & DIST. MALDA-732 101 (3) COMMISSIONER OF INCOME TAX (APPEALS), JALPAIGU RI (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.