The DCITA'bad Circle-3, Ahmedabad V. Ssmt. Hemangini D Dalal, Ahmedabad

ITA 2935/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60405 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-05-2012
• Assessment Year: 1994-1995
• Appeal Filed On: 28-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained cash credit; Business income; Opportunity of being heard; Principle of natural justice; Peak credit
• Section: 143(3); 142(1); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT ME MBER I.T.A. NO.2935/AHD/2009 A. Y. 1994-95 WITH I.T.A. NO. 2936/AHD/2009 A.Y.1995-96 D.C.I.T., CIRCLE-3 AHMEDABAD APPELLANT (IN BOTH THE APPEALS) VS. SMT. HEMANGINI D. DALAL PAN-AGIPD2649E RESPONDENT (IN BOTH THE APPEALS) DEPARTMENT BY : SHRI VINOD TANWANI, SR. D.R. ASSESSEE BY : M/S S.N. DIVETIA, A.R. DATE OF HEARING : 29.05.2012 DATE OF PRONOUNCEMENT : 29.05.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THESE ARE REVENUES APPEAL AGAINST SEPARATE ORDERS OF LD. CIT(A) DATED 06.01.2009 PASSED FOR ASSESSMENT YEARS 1994-9 5 AND 1995-96. 2. THESE APPEALS HAVE BEEN FILED LATE BY THE REVEN UE. CONDONATION PETITION WAS FILED ALONG WITH THE AFFIDAVIT. AFTER HEARING BOTH THE PARTIES AND I.T.A. NO.2935/AHD/2009 A. Y. 1994-95 WITH I.T.A. NO. 2935/AHD/2009 A.Y.1995-96 2 PERUSING THE RECORD, THE DELAY IN FILING THESE APPE ALS WAS CONDONED AND THE APPEALS WERE ADMITTED FOR HEARING. 3. REVENUE IN THESE APPEALS HAS TAKEN COMMON GROUN D FOR BOTH THE YEARS EXCEPTING THE AMOUNT. SO, FOR THE SAKE OF CO NVENIENCE, BOTH THE APPEALS ARE BEING DISPOSED OF BY CONSOLIDATED ORDER BY TAKING THE FACTS FOR THE ASSESSMENT YEAR 1994-95. I.T.A. NO.2935/2009 4. REVENUE HAS TAKEN FOLLOWING GROUND:- THE CIT(A) ERRED IN LAW AND ON FACTS IN DELETING T HE ADDITION MADE U/S 69A TO THE EXTENT OF RS.63,49,500 /- OUT OF TOTAL ADDITION OF RS.71,99,500/- MADE BY THE A.O. (IN IT A NO.2935/2009) THE CIT(A) ERRED IN LAW AND ON FACTS IN DELETING T HE ADDITION MADE U/S 69A TO THE EXTENT OF RS.24,42,941 /- OUT OF TOTAL ADDITION OF RS.34,42,941/- MADE BY THE A.O. (IN IT A NO.2936/2009) 5. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL. ON RECEIPT OF CERTAIN INFORMATION FROM THE DEPUTY COMM ISSIONER OF INCOME TAX, SPECIAL RANGE-11, AHMEDABAD, SUCH AS PAYMENT MADE BY THE ASSESSEE FOR TELEPHONE EXPENSES, ELECTRICITY EXPENSES, DEPOSITS MADE WITH THE BANK AND PURCHASE OF CAR DURING THE ASSESSMENT YEARS 1991-92 TO 1996-97, THE A.O. ASKED THE ASSESSEE TO FURNISH THE DETAIL OF FILING OF RETURN. IN REPLY IT WAS SUBMITTED THAT AFTER ACQUIRING THE MEMBERSHIP CARD OF THE STOCK EXCHANGE THE ASSESSEE HAS NOT DONE ANY BUSINESS SO NO RETURN OF INCOME WAS FILED. ON RECEIPT OF THIS REPLY THE A.O. ISSUED AND SERVED A NOTICE U/S 148 OF THE ACT ON 02.11.1999 ASKING THE ASSESSEE TO FILE THE RETURN O F INCOME FOR ASSESSMENT YEAR 1994-95. NO RETURN WAS FILED BY THE ASSESSEE. THEREAFTER NOTICES U/S I.T.A. NO.2935/AHD/2009 A. Y. 1994-95 WITH I.T.A. NO. 2935/AHD/2009 A.Y.1995-96 3 143(2) AND 142(1) WERE ISSUED TO THE ASSESSEE AND A SSESSMENT WERE COMPLETED U/S 144 OF THE I.T. ACT, BUT BY MISTAKE I T WAS MENTIONED IN THE BODY OF THE ASSESSMENT ORDER THAT ORDER IS PASSED U /S 143(3) READ WITH SECTION 147 OF THE I.T. ACT. THE A.O. COMPLETED TH E ASSESSMENT ON 20.11.2002 ESTIMATING TOTAL INCOME OF RS.1,00,17,75 4/-. THE ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED DEPOSIT MADE IN CENT RAL BANK OF INDIA AMOUNTING TO RS.92,92,754/- AND ESTIMATED BUSINESS INCOME OF RS.3,25,000/- AND INVESTMENT IN CAR FOR RS.4 LAKHS. THEREAFTER T HE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A). LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE A.O. TO THE EXTENT OF RS.92,92,754/- AND DELETED THE EST IMATED BUSINESS INCOME OF RS.3,25,000/- AND INVESTMENT IN CAR FOR RS.4 LAKHS. THE ADDITION CONFIRMED BY LD. CIT(A) WAS ON ACCOUNT OF DEPOSITS OF CHEQUE IN THE ACCOUNT OF THE ASSESSEE. THE ASSESSEE DEPOSITED TOTAL AMOUNT BY C ASH AND CHEQUE OF RS.80,24,500/- IN HER BANK ACCOUNT. DURING THE COU RSE OF HEARING BEFORE LD. CIT(A) IT WAS CONTENDED BY THE ASSESSEE THAT PEAK O F DEPOSIT AND WITHDRAWAL IN THE BANK WAS OF RS.8,33,275/- AND THE SAME SHOUL D BE ADDED IN THE TOTAL INCOME. THE CLAIM OF THE ASSESSEE THAT ADDITION ON PEAK CREDIT CAN BE MADE WAS NOT ACCEPTED BY LD. CIT(A). THE MATTER TRAVELE D TO HONBLE ITAT, AHMEDABAD. THE HONBLE ITAT, AHMEDABAD SET ASIDE T HE ORDER OF THE A.O. STATING THAT THE A.O. HAS NOT CONSIDERED THE CLAIM OF THE ASSESSEE REGARDING PEAK DEPOSITS IN THE REMAND REPORT CALLED BY LD. CI T(A) AND DIRECTED THE A.O. TO FRAME DENOVO ASSESSMENT AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN CONSEQUENCE OF THIS DIRE CTION OF THE HONBLE ITAT THE A.O. ISSUED NOTICE U/S 143(2) ON 17.8.2007 TO F RAME FRESH ASSESSMENT. I.T.A. NO.2935/AHD/2009 A. Y. 1994-95 WITH I.T.A. NO. 2935/AHD/2009 A.Y.1995-96 4 DURING THIS RE-ASSESSMENT PROCEEDING THE ASSESSEE W AS ASKED FOR CLARIFICATION AND EVIDENCE OF CHEQUES ISSUED AND DEPOSITED IN ASS ESSEES ACCOUNT AND TO FILE COMPLETE DETAILS OF EACH ENTRIES. NO SUCH INF ORMATION WAS FILED BEFORE THE A.O. HE, THEREFORE, MADE AN ADDITION OF RS.71,99,5 00/- TO THE INCOME OF THE ASSESSEE BY OBSERVING AS UNDER:- THE CONTENTION OF ASSESSEE IS CONSIDERED BUT IT IS NOT ACCEPTABLE IN THE CASE OF AMOUNT DEPOSITED BY CHEQU ES AS PER THE FACTS AND VARIOUS JUDGMENT CITED BY THE LD. CIT(A) IN HIS ORDER WITH WHOM I AM TOTALLY AGREE, SPECIALLY IN THIS CAS E WHERE ASSESSEE HAS NEITHER FILED ANY RETURN OF INCOME NOR COMPLIED ANY NOTICE/LETTER. ASSESSEE COULD NOT GIVE ANY EXPLANA TION OR EVIDENCE IN RESPECT OF EITHER CHEQUES DEPOSITED OR ISSUED FR OM HER ACCOUNT. HOWEVER IN THIS CASE DURING THE YEAR ASSESSEE HAS D EPOSITED CASH AMOUNT ON VARIOUS DATES FROM 3.2.94 TO 15.2.94 AGGR EGATING RS.8,25,000/-. HOWEVER THE ASSESSEE HAS WITHDRAWN FROM HIS BANK ACCOUNT RS.60,53,000/- ON VARIOUS DATES BEFORE 3.2.94. THUS THE BENEFIT OF PEAK CREDIT FOR CASH DEPOSIT IS ALLOW TO THE ASSESSEE AND NO ADDITION MADE AS LARGE CASH WAS WIT HDRAWN PRIOR TO DEPOSIT CASH AS STATED ABOVE. BUT DEPOSITS MADE BY CHEQUES IN HER BANK ACCOUNT IS CONSIDERED AS UNEXPLAINED CASH CREDIT AND TOTAL AMOUNT RS.71,99,500/- (RS.80,24,500/- - RS.8, 25,000/-) IS CONSIDERED INCOME OF THE ASSESSEE. THE ASSESSMENT SET ASIDE BY THE ITAT WAS GETTING TIME BARRED BY LIMITATION BY D TD. 31.12.2007. THEREFORE ASSESSMENT ORDER IS PASSED I N THIS CASE PREJUDICE TO THE FACT THAT DEPARTMENT HAS NOT ACCEP TED THE DECISION OF HONBLE ITAT IN THIS CASE AND FURTHER A PPEAL TO HONBLE GUJARAT HIGH COURT HAS BEEN FILED. 6. BEFORE LD. CIT(A) THE CONTENTION OF THE ASSESSE E WAS THAT THE A.O. HAS TAKEN DETAILS FROM THE BANK ACCOUNT OF THE ASSE SSEE OF CENTRAL BANK OF INDIA AND HAS TAKEN THE ENTIRE DEPOSITS FOR THE ASS ESSMENT PURPOSE WITHOUT GIVING DUE CONSIDERATION TO THE DEBITS APPEARING IN THE ACCOUNT. IT WAS PLEADED BEFORE HIM THAT A.O. SHOULD HAVE ALSO CONSI DERED THE WITHDRAWALS AND THEREAFTER SHOULD HAVE CONSIDERED ONLY THE PEAK CRE DITS AS UNEXPLAINED. IT WAS FURTHER ARGUED THAT THE A.O. HAS NOT FOLLOWED T HE HONBLE ITATS I.T.A. NO.2935/AHD/2009 A. Y. 1994-95 WITH I.T.A. NO. 2935/AHD/2009 A.Y.1995-96 5 INSTRUCTION WHILE COMPLETING THE ASSESSMENT. LD. C IT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- THE SUBMISSIONS MADE BY THE A.R. HAVE BEEN PERUSED . IT IS SEEN FROM THE DETAILS OF THE BANK ACCOUNT THERE ARE DEPOSITS AS WELL AS WITHDRAWALS IN THE BANK ACCOUNT. THEREFORE , IN THESE CIRCUMSTANCES, IT COULD BE PROPER TO CONSIDER ONLY THE PEAK CREDITS FOR THE PURPOSE OF MAKING ASSESSMENT. THEREFORE, T HE PEAK CREDITS AS APPEARING AT RS.8,50,000/- ARE TREATED A S UNEXPLAINED CASH CREDITS AND THE SAME IS CONFIRMED OUT OF THE A DDITION MADE BY THE A.O. AND BALANCE ADDITION IS DELETED. AGGRIEVED BY THIS ORDER OF LD. CIT(A) NOW THE REV ENUE IS IN APPEAL BEFORE US. 7. AT THE TIME OF HEARING LD. D.R. VEHEMENTLY ARGU ED THAT LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY PASSING N ON-SPEAKING ORDER SIMPLY ACCEPTING THE SUBMISSION OF THE ASSESSEE DESPITE TH E FACT THAT ASSESSEE DID NOT FURNISH ANY DETAILS OF PERSONS FROM WHOM CHEQUE S WERE DEPOSITED IN THE BANK ACCOUNT OR TO WHOM CHEQUES WERE ISSUED BY THE ASSESSEE. IN THE ABSENCE OF SUCH INFORMATION PEAK CREDIT BENEFIT CAN NOT BE CALCULATED AND ALLOWED. FOR MAKING THIS SUBMISSION LD. D.R. RELIE D ON THE TWO DECISIONS OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF C.I.T. V. R.S. RATHORE (RAJ) REPORTED IN 212 ITR 390 AND IN THE CASE OF SWAROOP CHAND KOJURAM V. C.I.T.(RAJ) REPORTED IN 235 ITR 732. CONCLUDING HIS ARGUMENT LD. D.R. SUBMITTED THAT ORDER PASSED BY LD. CIT(A) MAY KINDL Y BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. LD. COUNSEL OF THE ASSESSEE, ON THE OTHER HAND, RELIED ON THE ORDER OF LD. CIT(A). 8. HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE FIND THAT IN THIS CASE FOLLOWING THE DIRECTION OF HONBLE ITAT, AHMEDABAD, THE A.O. ASKED I.T.A. NO.2935/AHD/2009 A. Y. 1994-95 WITH I.T.A. NO. 2935/AHD/2009 A.Y.1995-96 6 FOR DETAILS OF PERSONS FROM WHOM THE CHEQUES WERE R ECEIVED BY THE ASSESSEE AND TO WHOM THE CHEQUES WERE ISSUED BY THE ASSESSEE SO THAT PEAK CREDIT IN HER ACCOUNT COULD BE ARRIVED AT AND THE SAME BE TAK EN FOR MAKING ADDITION FOR DEPOSITS MADE BY THE ASSESSEE IN HER BANK ACCOUNT T HROUGH CHEQUES. SINCE THIS INFORMATION WAS NOT GIVEN BY THE ASSESSEE, THE ADDITION OF RS.71,99,500/- WERE MADE. LD. CIT(A) HAS GIVEN RELIEF TO THE ASSE SSEE SIMPLY BY ACCEPTING THE SUBMISSION OF THE ASSESSEE DESPITE THE FACT THA T NO INFORMATION IN RESPECT OF CHEQUES WAS FURNISHED BEFORE HIM. IN VIEW OF TH ESE UNDISPUTED FACTS OF THIS CASE, WE FIND FORCE IN THE CONTENTION OF LD. D .R. THAT LD. CIT(A) WAS NOT JUSTIFIED IN GIVING RELIEF TO THE ASSESSEE. WE, HO WEVER, IN THE INTEREST OF NATURAL JUSTICE AND FAIR PLAY, RESTORE THE MATTER B ACK TO THE FILE OF LD. CIT(A) FOR PASSING A FRESH SPEAKING ORDER AFTER OBTAINING NECESSARY DETAILS TO ARRIVE AT THE PEAK CREDITS IN ASSESSEES BANK ACCOUNT AND FOLLOWING THE RATIO AS LAID DOWN BY HONBLE RAJASTHAN HIGH COURT IN THE CASES O F R.S. RATHORE (SUPRA) AND SWAROOP CHAND KOJURAM (SUPRA). 9. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER WAS PRONOUNCED IN OPEN COURT ON 29 .05.2012 SD/- SD/- (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER I.T.A. NO.2935/AHD/2009 A. Y. 1994-95 WITH I.T.A. NO. 2935/AHD/2009 A.Y.1995-96 7 TRUE COPY N.K. CHAUDHARY, SR. P.S. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. ! , ' , #$ / DR, ITAT, AHMEDABAD 6. %& '( / GUARD FILE. BY ORDER/ , ) / # * ' , #$ +