Mohammed Jamaludeen, CHENNAI V. ITO, CHENNAI

ITA 2973/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4598 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 20-04-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 19-10-2016
• Court: TRIBUNAL
• Department Lawyers: NANDA KUMAR
• Assessee Lawyers: K BALASUBR AMANIAN
• Keywords: Unexplained cash credit; Peak credit

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ ITA NO.: 2973/MDS/2016 / ASSESSMENT YEARS: 2012-13 SHRI MOHAMMED JAMALUDEEN , NO.17, RANGANATHAN ST., T. NAGAR, CHENNAI 600017. PAN: AAPPM0220P V. THE INCOME TAX OFFICER, NON CORPORATE WARD I(2), CHENNAI 34. ( /APPELLANT) ( /RESPONDENT) /APPELLANT BY : SHRI K.BALASUBRAMANIAN, ADVOCATE /RESPONDENT BY : SHRI NANDA KUMAR, JCIT / DATE OF HEARING : 20.04.2017 / DATE OF PRONOUNCEMENT : 05.05.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, CHENNAI DATED 26.09.2016 PERTAINING TO ASSESSMENT YEAR 2012-13. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE I S WITH REGARD TO SUSTAINING THE ADDITION OF ` 50,97,940/-, OUT OF ` 81,56,074/- TOWARDS 2 I.T.A. NO.2973/MDS/2016 ALLEGED UNEXPLAINED CREDITS I.E. CASH DEPOSITS IN A XIS BANK MADE BY AO U/S.69A OF THE ACT. 3. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE DE RIVES INCOME FROM SHARE IN FIRMS, HOUSE PROPERTY AND OTHER SOURCES. D URING THE ASSESSMENT PROCEEDINGS, THE AO FOUND CREDITS TOTALING ` 94,69,691/- IN THE SAVINGS BANK ACCOUNT MAINTAINED BY ASSESSEE WITH AXIS BANK, T.NAGAR BRANCH, CHENNAI. BEFORE THE AO, THE ASSESSEE SUBMITTED THAT BANK ACC OUNT RELATES TO THE PARTNERSHIP FIRM M/S. GALAXY CREATOR S, IN WHICH HE IS A PARTNER ALONG WITH ONE SHRI. A. SAMSUDHEEN. AFTER E XAMINING THE RECORDS AVAILABLE AND KEEPING IN VIEW VARIOUS FACTS, THE AO FOUND THAT NO ACCOUNTS HAVE BEEN MAINTAINED FOR THE FIRM AND NO R ETURNS HAVE BEEN FILED FOR THE FIRM UNDER THE IT ACT, NO REMUNERATIO N OR SHARE OF PROFIT FROM THE FIRM HAS BEEN OFFERED IN THE HANDS OF THE ASSESSEE IN THE ANY OF THE YEARS, AND THUS IN EFFECT, IT HAS NOT BEEN CONC LUSIVELY ESTABLISHED THAT THE FIRM IS AN INDEPENDENT, GENUINE BUSINESS ENTITY , AND THE ASSESSING OFFICER CONCLUDED THAT THE AXIS BANK ACCOUNT IN THE NAME OF THE ASSESSEE IS AN UNDISCLOSED ACCOUNT. SINCE THE ASSES SEE COULD NOT SATISFACTORILY EXPLAIN SEVERAL CREDIT ENTRIES IN TH E SAID ACCOUNT, THE AO ADDED BACK SUMS TOTALING ` 81,56,074/-, TREATING THE SAME AS UNEXPLAINED CASH CREDITS U/S 69A OF THE ACT. AGGRIE VED BY THE ORDER OF AO, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.C IT(A). 3 I.T.A. NO.2973/MDS/2016 4. ON APPEAL, AFTER CALLING REMAND REPORT FROM AO, LD.CIT(A) HAD GIVEN A RELIEF OF 30,58,134/- ON THE REASON THAT TH E SOURCE OF DEPOSIT WAS EXPLAINED. AGAINST THE SUSTENANCE OF ADDITION OF 15 ,97,940/-. ONCE AGAIN, THE ASSESSEE IS IN APPEAL BEFORE US. 5. BEFORE US, THE LD.A.R PRIMARILY PUT OBJECTION T HAT THE AO SUBMITTED REMAND REPORT TO LD.CIT(A) WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE AND HE SHOULD HAVE GIVEN AN OPPORTUNITY TO EXPLAIN THAT EARLIER CASH WITHDRAWALS WERE RE-DEPOSITED INTO SAME BANK A CCOUNT AND AS SUCH ONLY PEAK CREDIT SHOULD HAVE BEEN CONSIDERED, INSTE AD OF CONSIDERING ALL THE DEPOSITS IN THE BANK ACCOUNT AS UNEXPLAINED DEP SOITS. LD.A.R PLEADED FOR AN OPPORTUNITY TO PRESENT ITS CASE BEFORE THE A O TO EXPLAIN THE SAME. 6. ON THE OTHER HAND, LD.D.R OBJECTED THAT THE ASS ESSEE IS NOT ABLE TO EXPLAIN THE NEXUS BETWEEN THE WITHDRAWAL AND DEP OSITS INTO BANK ACCOUNT SO AS TO CONSIDER PEAK CREDIT, SINCE THE AS SESSEE HAS NOT SUBSTANTIATED THE CLAIM. HENCE, THE ENTIRE DEPOSITS INTO BANK ACCOUNT WHICH WAS NOT PROPERLY EXPLAINED TO BE CONSIDERED A S UNEXPLAINED DEPOSITS AS OBSERVED BY THE LD.CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, THE LOWER AUTHORITIES HAVE CONSIDERED THE ENTIRE DEPOSITS INTO BANK ACCOUNT AS UNEXPLAINED AND THE C ONTENTION OF THE 4 I.T.A. NO.2973/MDS/2016 LD.A.R IS THAT ONLY PEAK CREDIT TO BE CONSIDERED AN D NOT GROSS AMOUNT OF DEPOSIT INTO BANK ACCOUNT. WE ARE OF THE VIEW THAT THE ASSESSEE HAS TO SHOW THAT THE DEPOSITS TO BANK ACCOUNT IS VERY SAME EARLIER WITHDRAWALS /CASH FROM BANK ACCOUNT. IN OTHER WORDS, THE ASSESS EE TO HAS TO EXPLAIN NEXUS BETWEEN THE WITHDRAWALS FROM THE BANK ACCOUNT AND DEPOSITS INTO THE BANK ACCOUNT. IN VIEW OF THIS, WE ARE INCLINED TO REMIT THE ISSUE IN DISPUTE TO THE FILE OF AO WITH A DIRECTION TO THE A SSESSEE TO ESTABLISH THE NEXUS BETWEEN WITHDRAWAL/DEPOSITS INTO BANK ACCOUNT . 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 05 TH MAY, 2017 AT CHENNAI. SD/- SD/- ( . ) ( ) (G. PAVAN KUMAR) (CHANDRA POOJARI) /JUDICIAL MEMBER / ACCOUNTANT MEMBER /CHENNAI, /DATED, THE 05 TH MAY, 2017. K S SUNDARAM. /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF.