ITO WD 22(2)-1, NAVI MUMBAI V. ASHOK RAJBAHADUR JAISWAL, MUMBAI

ITA 3132/MUM/2011

• Counselvise Citation: 313219914 RSA 2011
• Duration Of Justice: 3 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Assessee Lawyers: VALLABHDAS D PARMAR
• Keywords: Unexplained investment; Peak credit; Revised return
• Section: 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI , BEFORE SHRI R.C.SHARMA , A M & SHRI SANJAY GARG , J M ITA N O. 3132 / MUM/20 1 1 ( ASSESSMENT YEAR : 2007 - 20 08 ) INCOME TAX OFFICER - 22 (2)(1) , VASHI RAILWAY STATION COMPLEX, TOWER NO.6, FOURTH FL. VASHI, NAVI MUMBAI - 400703 VS. SHRI ASHOK RAJBAHADUR JAISWAL, 33/E/57, GAURAV SANSTHA RAMA BAI, GHATKOPA R,(E), MUMBAI - 400075 PAN/GIR NO. : AEFPJ 2563 N ( APPELLANT ) .. ( RESPONDENT ) AND NO. 244 /MUM/20 13 (ARISING OUT OF ITA NO. 3132 /MUM/201 1 ) ( ASSESSMENT YEAR : 2007 - 08 ) SHRI ASHOK RAJBAHADUR JAISWAL, 33/E/57, GAURAV SANSTHA RAMA BAI, GHATKOPAR,(E), MUMBAI - 400075 VS. INCOME TAX OFFICER - 22 (2)(1) , VASHI RAILWAY STATION COMPLEX, TOWER NO.6, FOURTH FL. VASHI, NAVI MUMBAI - 400703 PAN/GIR NO. : AEFPJ 2563 N ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : SHRI ASGHAR ZAIN /ASSESSEE BY : SHRI VALLABHDAS D. PARMAR DATE OF HEARING : 26 TH NOVEMBER , 201 4 DATE OF PRONOUNCEMENT 5 TH DECEMBER , 201 4 O R D E R PER R.C.SHARMA (A.M) : THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 9 - 2 - 2011 PASSED BY LD CIT(A) - 33, MU MBAI FOR THE ASSESSMENT YEAR 2007 - 08. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FROM THE RECORD, WE FIND THAT THE ASSESSEE HAS FILED RETURN OF INCOME AT ITA NO. 3132/11 & CONO.244/13 2 RS.1,98,670/ - . THE ASSESSEE HAS FURNISHED A REVISED PROFIT AND LOSS ACCOUNT BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS WHICH IS BASED ON REVISED BOOKS PREPARED BY TAKING ALL THE UNACCOUNTED DEPOSITS IN THESE FOUR UNDISCLOSED BANK ACCOUNTS AS HIS UNACCOUNTED SALES AND ALL THE UNACCOUNTED WITHDRAWALS AS HIS UNACCOUNTED PU RCHASES AND THEN HE HAS ARRIVED AT THE GROSS SALE FIGURE AFTER INCLUDING THE ALREADY ACCOUNTED FIGURES REFLECTED IN THE ORIGINAL BOOKS OF ACCOUNT MAINTAINED BY HIM. THUS THE REVISED SALES ARE REFLECTED AT RS.49,95,250/ - WHEREAS THE PURCHASE ARE RS. 30,90, 447/ - . IN SUPPORT OF THE SAME, THE ASSESSEE HAS TAKEN THE PLEA THAT SINCE ALL THE PURCHASES ARE FROM THE GOVERNMENT, PURCHASE BILLS ARE AVAILABLE FOR THE TOTAL AMOUNT AND HE HAS SHOWN SOME PURCHASE AND SALES BILLS AS WELL AS PURCHASE AND SALES REGISTER . THE AO FOUND THAT THESE SALES AND PURCHASES ARE NOT SUPPORTED BY THE BILLS AND THESE REVISED BOOKS OF ACCOUNTS DO NOT DEPICT CORRECT PICTURE OF HIS BUSINESS. ACCORDINGLY, THE AO REJECTED THE REVISED PROFIT AND LOSS ACCOUNT SHOWING GP AT 35% AND THE RETURN INCOME AT RS.15,92,530/ - IN ABSENCE OF SUPPORTING BILLS. THE AO ALSO MADE AN ADDITION OF RS.5,22,190/ - AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. BY THE IMPUGNED ORDER THE LD. CIT(A) RESTRICTED THE ABOVE ADDITION TO RS.2,23,463/ - AFTER VERIFYING THE PEAK BALANCE AS PER BANK STATEMENT FILED BY THE ASSESSEE. THE AO HAS ALSO MADE AN ADDITION OF RS.29,28,275/ - ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. BY THE IMPUGNED ORDER, THE LD CIT(A) SUSTAINED RS.8,51,714/ - AF TER HAVING FOLLOWING OBSERVATIONS : I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS THE BANK ACCOUNT COPIES AVAILABLE FROM THE AIR INFORMATION. IT IS SEEN THAT ACCOUNT NO. 10101/755 IS HAVING CASH TRANSACTION AS WELL AS CHEQUE TRANSACTIONS WHICH A LL ARE UNACCOUNTED. THIS ACCOUNT SHOWS WITHDRAWAL OF RS. 5,00,000/ - ON 4. 10.2006 BY CHEQUE NO. 245156 AND AGAIN RS. 5,00,000/ - ON 31.10.2006 BY CHEQUE NO.245150. BESIDES THIS THERE ARE TRANSFER OF RS. 8,50,000/ - ON 15.02.2007 IN THE ANOTHER BANK ACCOUNT O F APPELLANT WITH PUNJAB & MAHARASHTRA CO.OP. BANK LTD. VIDE CHEQUE NO. 352687 AS WELL AS FEW OTHERS ARE REFLECTED IN THE CHART REPRODUCED ABOVE. AFTER GIVING EFFECT TO ALL THESE ENTRIES OF WITHDRAWAL THE PEAK AMOUNT IN THIS ACCOUNT COMES TO RS.8,51,714/ - A S ON 06.02.2007. THE ASSESSING OFFICER HAS TAKEN THE TOTAL AMOUNT FOR ADDITION IN THIS ACCOUNT OF RS. 22,84,500/ - . SINCE THE PEAK AFTER GIVING ITA NO. 3132/11 & CONO.244/13 3 EFFECT TO ALL THIS UNACCOUNTED ENTRIES IS REFLECTED AT RS.8,51,714/ - ONLY, THE SAME IS SUSTAINED. THE ASSESSEE GE TS RELIEF FOR THE BALANCE I.E. RS.14,32,786/ - . THE AMOUNT OF WITHDRAWAL MADE BY CHEQUE SINCE HAVE BEEN CREDITED AGAIN ANOTHER UNDISCLOSED ACCOUNT OF APPELLANT I.E. NEEDS OF LIFE AND STATE BANKS OF INDIA AT THE FAG END OF FINANCIAL YEAR WHERE THEY ARE ACC OUNTED FOR THE PURPOSE OF PEAK THEY HAVE NOT BEEN GIVEN EFFECT TO HERE AGAIN. GROUND NO. 7 IS PARTLY ALLOWED. 3. THE ASSESSEE IS ALSO AGGRIEVED BY THE ACTION OF LD. CIT(A) FOR ENHANCING THE INCOME OF RS.7,41,230/ - AS AGAINST THE ADDITION OF RS.3,14,676/ - MADE BY THE AO UNDER THE HEAD INCOME FROM OTHER SOURCES IN RESPECT OF DEPOSITS IN THE NEEDS AND LIFE CO - OP BANK LTD. ACCOUNT NO.1672. 4. AGAINST THE ABOVE ORDER OF LD. CIT(A), THE REVENUE IS IN APPEAL AND ASSESSEE IS IN CROSS OBJECTION BEFORE US . THE REVENUE IN ITS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 2,23,463/ - OUT OF ADDITION OF RS.4,50,800/ - MA DE U/S 69 AFTER TAKING THE PEAK OF DEPOSIT AS ON 01/08/2006 OF BANK ACCOUNT NO.7672 AS PER ASSESSEE'S COMPUTATION AND NOT TAKING INTO ACCOUNT THAT THIS ACCOUNT WAS NOT DISCLOSED IN THE BOOKS OF ACCOUNTS AND COMPRISED OF UNACCOUNTED TRANSACTIONS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN TAKING THE PEAK OF DEPOSIT OF THE ABOVE ACCOUNT AT RS.2,23,463/ - AS PER ASSESSEES COMPUTATION AND NOT TAKING INTO ACCOUNT THE REMAND REPORT SUBMITTED BY THE AO. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN RESTRICTING THE ADDITION MADE U/S 69 TO RS.8,51,714/ - AFTER TAKING PEAK OF UNACCOUNTED CASH AND CHEQUE TRANSACTION IN BANK ACCOUNT NO.755 ON THE BASIS OF ASSESSEES COMPUTATION AND NOT TAKING INTO ACCOUNT THAT THIS BANK ACCOUNT WAS NOT DISCLOSED IN THE BOOKS OF ACCOUNTS AND COMPRISED OF UNACCOUNTED TRANSACTIONS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COM MISSIONER OF INCOME - TAX (APPEALS) ERRED IN GIVING THE ABOVE REL IEF ON THE BASIS OF ASSESSEE'S COMPUTATION AND NOT TAKING INTO ACCOUNT THE REMAND REPORT SUBMITTED BY THE AO. AND THE ASSESSEE IN ITS CROSS - OBJECTION HAS TAKEN FOLLOWING GROUNDS : 1. ON FA CTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD CIT(A) ERRED IN REJECTING RESPONDENT ASSESSEE'S REVISED P & L ACCOUNT AND REVISED RETURN OF INCOME OF RS 15.92,530/ - 2. ON FACTS AND CIRCUMSTANCES OF CASE AND IN LAW LD. CIT(A) ERRED IN NOT CONSIDERING T HE COMBINED PEAK OF ALL THE BANK ACCOUNTS AS UNEXPLAINED INVESTMENT US 69 OF I T ACT; ITA NO. 3132/11 & CONO.244/13 4 3. ON FACTS AND CIRCUMSTANCES OF CASE AND IN LAW LD. CIT(A) ERRED IN CONFIRMING ADDITION OF RS 21.32.083/ - ( RS 2,23,463/ - + RS 8,51,714,+RS L000/ - +RS 10,55.906/ - ) 4) O N FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD CIT(A) ERRED IN ENHANCING THE INCOME FURTHER BY RS 7.41,230/ - AS AGAINST ADDITION OF RS. 3,14,676/ - WITHOUT ISSUE OF MANDATORY NOTICE US 251(2) OF I T ACT 1961. IT IS PRAYED THAT THE ORDER OF AO & CIT(A) BE MODIFIED AND THE ADDITIONS SUSTAINED AND ENHANCED BY CIT(A) BE MA PLEASED BE DELETED OR ALTERNATIVELY THE ASSESSMENT BE SET - ASIDE THE RESPONDENT ASSESSEE CRAVES LEAVE TO ADDUCE ,ADD,, AMEND, ALTER, OR DELETE ANY OF THE GROUNDS OF CROSS OBJECTION BEFORE OR AT THE TIME OF HEARING. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT ASSESSEE FILED HIS RETURN OF INCOME AT RS. 1,98,670/ - . THE CASE OF ASSESSEE WAS SELECTED FOR SCRUTINY THROUGH C ASS . DURING ASSESSMENT PROCEEDINGS ASSESSEE HAS FILED REVISED TRADING, PROFIT AND LOSS ACCOUNT SHOWING GP OF 35% AND DECLARING INCOME AT RS. 15,92,530/ - . THE ASSESSEE HAS ALSO PRODUCED BEFORE THE AO BILLS OF PURCHASES AND SALES AND VOUCHERS. HOWEVE R, THE AO REJECTED THE REVISED PROFIT AND LOSS ACCOUNT AND MADE ADDITION U/S.69 AS WELL AS VARIOUS DEPOSITS FOUND IN BANK ACCOUNT OF THE ASSESSEE WITHOUT GIVING CREDIT OF AMOUNT DEPOSITED IN THE BANK ACCOUNT WHICH WAS EARLIER WITHDRAWN FROM OTHER BANK ACCO UNT. THE CIT(A) VERIFIED ALL THE BANK ACCOUNT AND RECORDED A FINDING THAT THE BANK ACCOUNT OF ASSESSEE WAS HAVING BOTH CASH AND CHEQUE TRANSACTIONS. AFTER GIVING CREDIT FOR DEPOSIT MADE IN THE BANK ACCOUNT OUT OF WITHDRAWAL FROM OTHER BANK ACCOUNT, THE CIT (A) AFFIRMED THE ADDITION OF RS. 8,51,714/ - BY ARRIVING AT THE PEAK CREDIT. WE FOUND THAT AS PER THE FINDING RECORDED BY CIT(A), THE WITHDRAWAL MADE ITA NO. 3132/11 & CONO.244/13 5 IN ONE BANK ACCOUNT WAS AGAIN UTILIZED DURING THE YEAR FOR DEPOSIT IN OTHER BANK ACCOUNT, THEREFORE, CREDIT IS REQUIRED TO BE GIVEN FOR DEPOSIT AND ADDITION OF ONLY PEAK CREDIT CAN BE MADE. AS THE CIT(A) HAS ALREADY GIVEN CREDIT FOR THE DEPOSITS AND WITHDRAWAL SO MADE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR UPHOLDING ADDITION OF RS. 8,51,714/ - ON THE BASIS OF PEAK CREDIT. 6. THE ASSESSEE HAS ALSO TAKEN A GROUND WITH REGARD TO ENHANCEMENT OF ADDITION BY RS. 7,41,230/ - AS AGAINST ADDITION OF RS. 3,14,676/ - WITHOUT ISSUANCE OF MANDATORY NOTICE U/S.251 (2). THERE IS NO DISPUTE TO THE PROPOSITION THAT P OWERS OF CIT(A) IS CO - TERMINUS WITH THAT OF AO. HE, THEREFORE, CAN ENHANCE OR REDUCE THE ASSESSED INCOME. HOWEVER, BEFORE ENHANCING THE INCOME, THE CIT(A) IS REQUIRED TO ISSUE MANDATORY NOTICE U/S.251(2) AND SUCH ENHANCEMENT CAN ONLY BE MADE WITH RESPECT O F THE HEAD OF INCOME ALREADY ASSESSE D BY THE AO. IN THE INTEREST OF JUSTICE, WE RESTORE THIS GROUND TO THE FILE OF AO FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE AS THE ASSESSEE HAS ALREADY FILED REVISED PROFIT AND LOSS ACCOUNT DISCLOS ING ALL THE PURCHASES AND SALES. WE DIRECT THE AO TO VERIFY THE REVISED PROFIT AND LOSS ACCOUNT AS PER THE BOOKS OF ACCOUNT SO PRODUCED BY ASSESSEE AFTER INCORPORATING ALL THESE ENTRIES AND TO DETERMINE THE INCOME AFRESH AS PER LAW AFTER GIVING DUE OPPORTU NITY TO THE ASSESSEE. 7 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED, WHEREAS THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 05/12 / 201 4 . ITA NO. 3132/11 & CONO.244/13 6 05/12 / 2014 SD/ - SD/ - ( ) ( SANJAY GARG ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 05/12 /2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//