Smt. Gopiben Navinchandra Thakkar, Patan V. The Income Tax Officer, Ward-3, Patan

ITA 317/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8966 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 06-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Peak credit; Question of law
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER GOPIBEN NAVINCHANDRA THAKKAR, GOKULNAGAR SOCIETY, B/H. HOHANA BUILDING, HARIJ, DIST. PATAN PAN: AEXPT0407M (APPELLANT) VS THE IT O , WARD - 3 , PATAN (RESPONDENT) REVENUE BY : S H RI VIRENDRA SINGH , SR. D . R. ASSESSEE BY: SHRI M.K. PATEL, A.R. DATE OF HEARING : 12 - 06 - 2 019 DATE OF PRONOUNCEMENT : 27 - 06 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSE E S APPEAL FOR A.Y. 2008 - 09 , ARI SES FROM ORDER OF THE CIT(A) , GANDHINAGAR, AHMEDABAD DATED 16 - 08 - 2 016 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS AGAI NST THE DECISION OF LD. CIT(A) IN CONFI RMING THE ADDITION TO THE AMOUNT OF RS. 3,30,950/ - I T A NO . 317 / A HD/20 17 A SSESSMENT YEAR 200 8 - 09 I.T.A NO. 317 /AHD/20 17 A.Y. 2008 - 09 PAGE NO GOPIBEN NAVINCHANDRA THAKKAR VS. IT O 2 CONSISTED OF RS. 2 , 15 , 950/ - ON ACCOUNT OF OP ENING BALANCE OF CASH AND RS. 1, 15 , 000/ - ON ACCOUNT OF SALE OF GOLD. 3. THE FACT IN BRIEF IS THAT ASSESSMENT U/S. 143( 3) R.W.S. 147 OF THE ACT WAS FINALIZED IN THE CASE OF THE ASSESSEE ON 31 ST JULY, 2015. IN THE AFORESAID COMPLETED ASSESSMENT , AN ADDITION OF RS. 10,29,100/ - WAS MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT MADE IN THE SAVING BANK ACCOUNT OF THE ASSESSEE MA INTAINED WITH H ARIJ NAGARIK SAHAKARI BANK LTD. THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS SHOWN RETURN OF INCOME OF RS. 1,51,913/ - WHEREAS HE HAS DEPOSITED CASH OF RS. 10,29,100/ - ON VARIOUS DATES. SINCE THE ASSESSEE HAS FAILED TO PROVE THE SO URCE OF CASH DEPOSIT AND ALSO FAILED TO SUBSTANTIATE HIS CONTENTION THAT THE SAME AMOUNT WHICH WAS WITHDRAWN FROM THE BANK WAS AGAIN DEPO SITED IN THE SAME BANK ACCOUNT , THE AMOUNT OF RS. 10,29,100/ - DEPOSITED BY THE ASSESSEE WAS TREATED AS UNEXPLAINED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE BY THE ASSESSING OFFICER . 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. LD. CIT(A). THE LD. CIT(A) HAS RESTRICTED THE ADDITION TO THE AMOUNT OF RS. 3 , 30 , 950/ - . THE RELEVANT PART OF THE DECISION OF LD. C IT(A) IS REPRODUCED AS UNDER: - 4.2 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER, SUBMISSION MADE BY THE APPELLANT AND THE CASE LAWS RELIED UPON. THE AO HAS MADE ADDITION ON THE GROUND THAT THE APPELLANT HAS FAILED TO PROVE SOURCE OF CASH DEP OSIT OF RS.10,29,100/ - IN THE BANK ACCOUNT. ON THE OTHER HAND THE APPELLANT HAS ARGUED TO INVOKE PEAK CREDIT PRINCIPLE. HIS CASE IS THAT THE RELEVANT CREDIT TRANSACTIONS HAVE CORRESPONDING DEBIT TRANSACTIONS AND HENCE EVEN IF ADDITION IS MADE, THE SAME SHA LL BE MADE BY APPLYING PEAK THEORY FOR WHICH A WORKING HAS BEEN SUBMITTED. ON CAREFUL CONSIDERATION OF FACTS, IT IS OBSERVED THAT TOTAL CASH DEPOSITED IN ALLEGED BANK ACCOUNT AMOUNTS TO RS.11,28,100/ - AGAINST WHICH WITHDRAWAL OF RS.12,17,400/ - HAS BEEN MAD E. IT IS OBSERVED THAT WITHDRAWAL IS MORE THAN THE AMOUNT OF CASH DEPOSITED. FURTHER, ON PERUSAL OF DATES ON WHICH CASH IS DEPOSITED AND WITHDRAWALS MADE, IT IS OBSERVED THAT CASH DEPOSITED IS SUBSEQUENT TO WITHDRAWALS MADE FROM SUCH ACCOUNT. PRESENTLY, TH E ISSUES WHICH REQUIRES CONSIDERATION ARE AS TO WHETHER PEAK THEORY CAN BE APPLIED IN CASE OF APPELLANT AND WHETHER THE FACT THAT DEPOSITS ARE MADE AFTER WITHDRAWAL OF CASH IS SUFFICIENT PROOF FOR RAISING DOU BT ON THE GENUINENESS OF THE TRANSACTION. THE IS SUE REGARDING APPLICATION OF PEAK CREDIT IS SQUARELY COVERED I.T.A NO. 317 /AHD/20 17 A.Y. 2008 - 09 PAGE NO GOPIBEN NAVINCHANDRA THAKKAR VS. IT O 3 BY THE DECISION OF HON'BLE GUJARAT HIGH COURT IN CASE OF POT VS. SHRI INDRAJEET ZANDUSING TOMAR IN TAX APPEAL NO. 908 OF 2015 WHEREIN THE HON'BLE COURT CONFIRMED THE FINDINGS OF 1TAT OF ACCEPTING PEAK CREDITS IN TWO UNDISCLOSED BANK ACCOUNTS, AS UNDISCLOSED INCOME. THE RELEVANT FINDINGS ARE AS FOLLOWS: '4. IN OUR OPINION, CIT (A) AND TRIBUNAL COMMITTED NO ERROR. THERE WAS NOTHING WITH THE DEPARTMENT TO SUGGEST THAT ENTIRE DEPOSIT OF RS.2.46 CRORES REPRESENTS THE INCOME OF THE ASSESSEE. CIT (A) INSTEAD OF ADDING 1% OF RS.2.46 CRORES ADOPTED PEAK CREDIT THEORY, WHICH WAS ALSO UPHELD BY THE TRIBUNAL. NO QUESTION OF LAW ARISES. TAX APPEAL IS, THEREFORE, DISMISSED.' FOLLOWING THE ABOVE FINDINGS AND IN V IEW OF THE FACT THAT CASH CREDIT TRANSACTIONS HAVE CORRESPONDING DEBIT TRANSACTIONS, THE APPLICABILITY OF PEAK THEORY IN CASE OF APPLICANT CANNOT BE DENIED. WITH RESPECT TO THE ISSUE REGARDING THE FACT THAT DEPOSITS IN THE ACCOUNT ARE MADE SUBSEQUENT TO WI THDRAWAL, REFERENCE IS INVITED TO THE DECISION OF HON'BLE AHMEDABAD ITAT IN CASE OF PATEL PRAHLADBHAI HARJIVANBHAI IN ITA NO. 2347/AHD/2012 DATED 15/03/2013 WHEREIN IT IS STATED THAT WHEN IT HAS NOT BEEN PROVED THAT CASH WITHDRAWN HAS BEEN UTILIZED OTHERWI SE THAN THE PURPOSE MENTIONED BY THE APPELLANT, NO ADVERSE VIEW CAN BE TAKEN. THE RELEVANT FINDINGS ARE AS FOLLOWS : '5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS WITHDRAWN CASH FROM THE KALUPUR COMMERCIAL COO PERATIVE BANK IN THE MONTH OF JANUARY AND MARCH, 2008, WHICH WAS REDEPOSITED IN THE SAME BANK ACCOUNT IN THE MONTH OF MAY 2008 AT RS.RS.8,50,000/ - . THESE WERE THE CASH WITHDRAWAL MADE BY THE APPELLANT FROM HIS OWN ACCOUNT MAINTAINED WITH THE SAME BANK, NAM ELY, THE KALUPUR COMMERCIAL CO - OPERATIVE BANK, WHICH WAS KEPT AT RESIDENCE. SIMILARLY WITHDRAWAL ALSO MADE FROM THE S.B.I, ACCOUNT AND DEPOSITS WERE MADE IN THE KALUPUR COMMERCIAL CO OPERATIVE BANK ON DIFFERENT DATE DURING THE YEAR THE ID. A.O. HAS NOT BRO UGHT ON RECORD ANY EVIDENCE THAT CASH WITHDRAWAL IN THE MONTH OF JANUARY OR MARCH, HAD BEEN USED OTHERWISE THEN OTHER PURPOSES MENTIONED BY THE APPELLANT. THEREFORE, WE HAVE CONSIDERED VIEW THAT NO ADDITION CAN BE MADE BY FOLLOWING EXPLANATION OF THE ASSES SEE AND TWO DECISIONS OF HON'BLE ITAT, DELHI. ACCORDINGLY, THE ASSESSEE'S APPEAL IS ALLOWED.' SIMILARLY IN CASE OF ACIT VS. BALDEV RAJ CHARLA [2009] 121 TTJ 366 (DELHI), WHEREIN IDENTICAL ADDITIONS OF CASH DEPOSITED AND IT WAS HELD BY THE 'C BENCH OF ITAT, DELHI, AS UNDER: 'WHERE THERE WERE SUFFICIENT CASH WITHDRAWALS TO COVER CASH DEPOSITS IN QUESTION, MERELY BECAUSE THERE WAS TIME GAP BETWEEN WITHDRAWAL OF CASH AND CASH DEPOSITS, EXPLANATION OF ASSESSEE COULD NOT BE REJECTED AND ADDITION ON ACCOUNT OF CAS H DEPOSIT COULD NOT BE MADE [BLOCK PERIOD 1 - 4 - 1996 TO 24 - 9 - 2002) [IN FAVOUR OF ASSESSEE] .' IN ADDITION TO ABOVE, HON'BLE DELHI BENCH HAS FURTHER SUPPORTED THE VIEW IN CASE OF SHRI BHUPENDER PAL SINGH CHAWLA IN ITA 4080/DEL/2010 DATED 25/02/2011 THAT 'WHEN THE GAP BETWEEN THE WITHDRAWAL AND DEPOSIT OF AMOUNT HAVE BEEN EXPLAINED BY THE ASSESSEE, THEN THERE IS NO INFIRMITY IN THE ORDER OF CIT(A) VIDE WHICH THE IMPUGNED ADDITION HAS BEEN DELETED ON THE GROUND THAT THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THE SOURC E OF SAID DEPOSIT WHICH REPRESENTS EARLIER WITHDRAWAL BY THE ASSESSEE.' ON OVERALL CONSIDERATION OF FACTS AND ARGUMENTS IT IS OBSERVED THAT THE CASE OF THE APPELLANT IS SQUARELY COVERED BY THE ABOVE CASE LAWS AND HENCE MERELY BECAUSE WITHDRAWAL IS MADE BEF ORE DEPOSIT OF CASH EXPLANATION OF THE APPELLANT CANNOT BE REJECTED. FURTHER, SINCE DEBIT IN THE ACCOUNT IS REPRESENTED BY CORRESPONDING CREDIT ENTRY, CREDIT BY APPLYING PEAK THEORY SHALL BE GRANTED TO THE APPELLANT. HOWEVER, ON PERUSAL OF WORKING OF PEAK CREDIT SUBMITTED BY THE APPELLANT IT IS OBSERVED THAT THERE IS OPENING BALANCE OF RS.2,15,950/ - . A FURTHER BREAK UP OF SUCH OPENING BALANCE WAS OBTAINED IN ORDER TO VERIFY THE SOURCE OF SUCH BALANCE. ON PERIIROTOCTRBTEARLAP IT WAS I.T.A NO. 317 /AHD/20 17 A.Y. 2008 - 09 PAGE NO GOPIBEN NAVINCHANDRA THAKKAR VS. IT O 4 OBSERVED THAT THERE WA S A FURTHER OPENING BALANCE OF RS.2,81,4307 - PERTAINING TO A.Y. 200/ - 08, ON ENQUIRY, THE APPELLANT HAS NOT FURNISHED ANY DETAILS/EVIDENCES IN ORDER TO SUBSTANTIATE THE SOURCE OF SUCH OPENING BALANCES. ANOTHER ENTRY NOTICED IN THE PEAK CREDIT WORKING WAS FO R SALE OF GOLD AMOUNTING TO RS.1,15,000/ - . IN ORDER TO SUBSTANTIATE SUCH SALE, THE APPELLANT HAS FILED CONFIRMATION OF THE PARTY TO WHOM SUCH SALE IS MADE. HOWEVER NO OTHER EVIDENCE HAS BEEN FURNISHED BY THE APPELLANT. ALSO IT IS OBSERVED THAT SUCH SALE HA S NOT BEEN REFLECTED IN THE RETURN OF INCOME FILED BY THE APPELLANT. EVEN CONFIRMATION IS IN LOOSE PAPER AND NOT JUSTIFIED ACTUAL SALE AND WHETHER APPELLANT IS HOLDING SUCH ORNAMENTS ARE NOT PROVED. CONSIDERING THE FACT THAT SUCH SALE IS MADE IN CASH AND N OT SUBSTANTIATED BY PROPER EVIDENCE, IT RAISES DOUBT REGARDING ITS GENUINENESS AND HENCE CREDIT OF SUCH AMOUNT CANNOT BE GRANTED. IN VIEW OF ABOVE OUT OF TOTAL DEPOSIT OF RS. 10,29,100/ - , I HEREBY CONFIRM RS.3,30,950/ - WHICH CONSISTS OF RS.2,15,950/ - ON AC COUNT OF O PENING BALANCE AND RS.L , 15,000/ - ON ACCOUNT OF SALE OF GOLD SINCE THE SAME HAVE NOT BEEN SUBSTANTIATED BY PROPER EVIDENCES. THE BALANCE ADDITION OF RS.6,98,150/ - IS DIRECTED TO BE DELETED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD CAREFULLY. THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 10 , 29 ,1 00/ - AS UNEXPLAINED CASH DEPOSIT SINCE THE ASSES SEE HAS FAILED TO PROVE THE SOURCE OF CASH DEPOSITED IN THE SAVING BANK ACCOUNT. DURING THE COURSE OF APPELLATE PROCEED INGS BEFORE THE LD. CIT(A), THE ASSESSEE HAS REQUESTED THE LD. CIT(A) TO I NVOKE THE PEAK CREDIT PRINCIPLE. O N EXAM INA TION OF BAN K ACCOUNT , THE LD. CIT(A) HAS NOTICED THAT ASSESSEE HAS MADE WITHDRAWAL OF R S. 12 , 17 , 400/ - AND MADE DEPOSIT OF RS. 11 , 28 , 100/ - IN THE SAVING BANK ACCOUNT. ON FURTHER VERIFICATION OF THE DETAIL OF AMOUNT DEPOSITED IN THE SAVING BANK ACCOUNT, THE LD. CIT(A) NOTICED THAT THERE WAS AN OPENING BALANCE OF RS. 2 , 81 , 430/ - REFLECTED IN THE SAVING BANK ACCOUNT AND THERE WAS ANOTHER ENTRY OF CASH DEPOSIT FROM SALE OF GOLD AMOUNTING TO RS. 1 , 15 , 000/ - . IN SPITE OF GIVING ADEQUATE OPPORTUNITIES , THE ASSESSEE NEITHER EXPLAINED THE AFORESAID MATERIAL DISCREPANCIES REPORTED BY THE LD. CIT(A), NOR PROVED THE SOURCES OF THESE TWO TRANSACTIONS WITH RELEVANT SUPPORTING MATERIALS. T HEREFORE , WE CONSIDER THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION TO THE EXTENT OF RS. 6 , 9 8,150/ - . IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DO NOT FIND I.T.A NO. 317 /AHD/20 17 A.Y. 2008 - 09 PAGE NO GOPIBEN NAVINCHANDRA THAKKAR VS. IT O 5 ANY SUBSTANCE IN THE APPEAL OF THE ASSESSEE. TH EREFORE, THE SAME IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 27 - 06 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER AC COUNTANT MEMBER AHMEDABAD : DATED 27 /06 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,