The ITO, Ward-2(3), Surat V. Smt. Ratanben Champalal Bhatia, Surat

ITA 3282/AHD/2011

• Counselvise Citation: 328220514 RSA 2011
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 29-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Unexplained cash credit; Peak credit; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 3282/ AHD/2011 (ASSESSMENT YEAR 2008-09) ITO, WARD 2(3), SURAT VS. SMT. RATANBEN CHAMPALAL BHATIA, 112, CITY TEXTILE MARKET, RING ROAD, SURAT PAN/GIR NO. : AASPB9147P (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI VINOD TANWANI, SR. DR RESPONDENT BY: SHRI RASESH SHAH, AR DATE OF HEARING: 28.02.2012 DATE OF PRONOUNCEMENT: 28.03.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS REVNEUES APPEALS DIRECTED AGAINST THE ORD ER OF LD. CIT(A) I, SURAT DATED 28.09.2011 FOR THE ASSESSMENT YEAR 2 008-09. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) I, SURAT HAS ERRED IN DELEING THE ADDITION O F RS.32,68,699/- ON ACCOUNT OF AS UNEXPLAINED CASH CREDIT IN BANK AC COUNT, WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE HAS FAILED T O PROVIDE ANY GENUINE SOURCE OF CREDIT APPEARING IN THE BANK ACCO UNT. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. IT IS THEREFORE, PRAYED HAT THE ORDER OF CIT(A) MAY BE SET ASIDE AND THAT OF A.O. MAY BE RESTORED TO THE ABOVE EXTENT. I.T.A.NO. 3282/AHD/2011 2 3. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE A.O. IN THE ASSESSMENT ORDER THAT THIS CASE WAS SELECTED FOR SC RUTINY ON THE BASIS OF AIR INFORMATION THAT THE ASSESSEE MADE TRANSACTION IN CASH OF RS.21.01 LACS IN KOTAK MAHINDRA BANK ON 31.03.2008. THE A.O . ASKED THE ASSESSEE TO EXPLAIN THE DETAILS OF NATURE AND SOURC E OF THIS CASH DEPOSITED OF RS.21.01 LACS IN KOTAK MAHINDRA BANK. THE A.O. OBTAINED A COPY OF THE BANK ACCOUNT FOR THE RELEVANT YEAR FROM THE BAN K AND FROM THE SAID BANK STATEMENT IT WAS NOTED BY THE A.O. THAT THE AS SESSEE HAS MADE CASH DEPOSIT OF RS.21.01 LACS IN THE BANK ACCOUNT. HE F URTHER NOTED THAT AS PER THE ACCOUNT OPENING FORM, THE ACCOUNT WAS OPENED IN THE NAME OF SMT. RATABEN CHAMPALAL BHATIA AND THIS ACCOUNT WAS NOT D ISCLOSED IN THE INCOME TAX RETURN FILED BY THE ASSESSEE. IT WAS SU BMITTED BY THE ASSESSEE BEFORE THE A.O. THAT THE ASSESSEE HAS ENTERED INTO PMS AGREEMENT WITH MR. BHARGAVA DAVE OF MUMBAI FOR SHARE BUSINESS AND ACCORDINGLY, THIS ACCOUNT WAS OPENED. HE ALSO SUBMITTED THAT CASH DE POSIT WAS MADE BY MR. BHARGAVA DAVE OF MUMBAI AND CHEQUE DEPOSITS ARE GIVEN BY THE ASSESSEE FROM HER PROPRIETARY BUSINESS M/S. BEENA E NTERPRISES. THE A.O. WAS NOT SATISFIED AND HE MADE ADDITION OF THIS AMOU NT OF CASH DEPOSIT OF RS.21.01 LACS AND IN ADDITION TO THIS, HE ALSO MADE ADDITION OF RS.14,17,699/- IN RESPECT OF DEPOSITS IN THE SAME B ANK ACCOUNT BY WAY OF CHEQUE /TRANSFER OUT OF TOTAL SUCH DEPOSIT OF RS.22 ,39,299/- BY HOLDING THAT ASSESSEE COULD NOT EXPLAIN CHEQUE DEPOSITS TO THIS EXTENT. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPE AL BEFORE LD. CIT(A) WHO HAS DELETED THE ENTIRE ADDITION ON ACCOUNT OF C HEQUES DEPOSITED AND OUT OF THE ADDITION MADE IN RESPECT OF CASH DEPOSIT , IT WAS HELD BY HIM THAT ONLY PEAK CREDIT CAN BE ADDED AND HE FURTHER S TATED THAT PEAK DEPOSIT IS OF RS.2.50 LACS ON 29.3.2008. HE CONFIRMED THE ADDITION TO THIS EXTENT I.T.A.NO. 3282/AHD/2011 3 AND ALLOWED RELIEF FOR THE BALANCE ADDITION. NOW, THE REVENUE IS IN APPEAL FOR THE RELIEF ALLOWED BY LD. CIT(A). 4. IT WAS SUBMITTED BY THE LD. D.R. THAT RELIEF HAD BEEN ALLOWED BY LD. CIT(A) ON ACCOUNT OF CHEQUES DEPOSIT ON THIS BA SIS THAT THESE CHEQUES DEPOSITS ARE RECEIVED FROM M/S. BEENA ENTERPRISES. HE SUBMITTED THAT THIS IS NOT PROPER BECAUSE THE A.O. HAS ALREADY ALL OWED RELIEF IN RESPECT OF CHEQUES RECEIVED FROM M/S. BEENA ENTERPRISES OF RS. 3.47 LACS AS HAS BEEN NOTED BY LD. CIT(A) ALSO ON PAGE 8 OF HIS ORDER AND THEREFORE, LD. CIT(A) WAS NOT JUSTIFIED IN DELETING ANY FURTHER AM OUNT IN RESPECT OF CHEQUE DEPOSIT. REGARDING RELIEF ALLOWED IN RESPEC T OF CASH DEPOSIT ON THE BASIS OF PEAK THEORY, IT WAS SUBMITTED BY HIM T HAT IT IS NOT ESTABLISHED THAT CASH WITHDRAWN HAS COME BACK IN THE BANK. HE ALSO SUBMITTED THAT THE A.O. HAS DISCUSSED THIS ASPECT IN PARA 7 & 8 OF THE ASSESSMENT ORDER THAT THE PEAK THEORY IS NOT APPLICABLE IN THE PRESE NT CASE AND, THEREFORE, THE ORDER OF LD. CIT(A) ON THIS ISSUE SHOULD BE REV ERSED AND THAT OF THE A.O. SHOULD BE RESTORED. 5. AS AGAINST THIS, IT WAS SUBMITTED BY THE LD. A. R. THAT IN RESPECT OF CASH DEPOSIT PEAK THEORY WAS ACCEPTED BY THE A.O. A LSO IN ASSESSMENT YEAR 2009-10 AS PER ASSESSMENT ORDER PASSED FOR THA T YEAR U/S 143(3) ON 27.12.2011 AND HE SUBMITTED A COPY OF THIS ASSESSME NT ORDER. HE SUBMITTED THAT SINCE THE PEAK THEORY WAS ACCEPTED I N THE NEXT YEAR I.E. ASSESSMENT YEAR 2009-10, THERE IS NOTHING WRONG IN THE ACTION OF LD. CIT(A) IN ACCEPTING THE PEAK THEORY IN THE PRESENT YEAR. REGARDING CHEQUE DEPOSIT, IT WAS SUBMITTED THAT THE BANK STAT EMENT OF THE ASSESSEE FOR THE BANK ACCOUNT WITH KOTAK MAHINDRA BANK AND T HE BANK STATEMENT OF M/S. BEENA ENTERPRISES ARE AVAILABLE ON THE PAPE R BOOK FILED BY THE ASSESSEE AND FROM THE SAME, IT CAN BE SEEN THAT CHE QUE TRANSFER IN THE ACCOUNT OF THE ASSESSEE FROM THE BANK ACCOUNT OF M/ S. BEENA ENTERPRISES I.T.A.NO. 3282/AHD/2011 4 IS MUCH MORE THAN RS.3.47 LACS FOR WHICH RELIEF WAS ALLOWED BY THE A.O. AND HENCE, FURTHER RELIEF ALLOWED BY THE LD. CIT(A) IS JUSTIFIED. HE SUPPORTED THE ORDER OF LD. CIT(A). 6. IN THE REJOINDER, IT WAS SUBMITTED BY THE LD. D. R. THAT THE DETAILS MUST HAVE BEEN FURNISHED IN ASSESSMENT YEAR 2009-10 REGARDING ROTATION OF CASH BUT SINCE NO SUCH ROTATION OF CASH COULD BE SHOWN IN THE PRESENT YEAR, PEAK THEORY CANNOT BE ACCEPTED IN THE PRESENT YEAR. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT REGARDING THE CHEQUE DEPOSIT WHICH WAS NOT ACC EPTED BY THE A.O., DETAILS ARE AVAILABLE ON PAGE 12 OF THE ORDER OF LD . CIT(A). AS PER THESE DETAILS, WE FIND THAT OUT OF THIS TOTAL AMOUNT OF R S.14.22 LACS, 3 CHEQUES WERE RECEIVED FORM M/S. TECHNO SHARES TO THE EXTENT OF RS.6.50 LACS AND THE BALANCE WAS RECEIVED FORM BEENA ENTERPRISES OF RS.7.72 LACS. DATE WISE DETAILS ARE AVAILABLE AND WHEN THE SAME IS EXA MINED WITH THE BANK STATEMENT OF M/S. BEENA ENTERPRISES, WE FIND THAT A LL THESE CHEQUES ARE APPEARING IN THE WITHDRAWAL SIDE OF THE BANK ACCOUN T OF M/S. BEENA ENTERPRISES AND IN THE NARRATION, THE NAME OF THE A SSESSEE IS MENTIONED AND, THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) REGARDING THE DELETION BY HIM IN RESPECT OF CHEQUE DEPOSITS. WHEN THE CHEQUES ARE RECEIVED FORM M/S. BEENA ENTERPRISES AN D M/S. TECHNO SHARES, IT CANNOT BE SAID THAT THE DEPOSIT ON ACCOU NT OF SUCH CHEQUES IS UNEXPLAINED DEPOSIT OF THE ASSESSEE. REGARDING PEA K THEORY IN RESPECT OF CASH DEPOSIT, WE FIND THAT PEAK THEORY WAS REJECTED BY THE A.O. ON THIS BASIS THAT TWO WITHDRAWALS OF RS.70,000/- AND 80,00 0/- RE IN THE MONTH OF SEP-OCT 2007 AND OTHER REMAINING WITHDRAWALS ARE BY WAY OF CLEARANCE. IN OUR CONSIDERED OPINION, THIS CANNOT BE THE VALID BASIS TO REJECT THE PEAK THEORY PARTICULARLY WHEN IT IS EXPLAINED BY THE ASS ESSEE THAT ENTIRE CASH I.T.A.NO. 3282/AHD/2011 5 DEPOSIT WAS MADE BY MR. BHARGAVA DAVE WITH WHOM THE ASSESSEE HAS OPENED PMS ACCOUNT. IT IS ALSO SEEN THAT MOST OF T HE CHEQUE WITHDRAWAL FROM THE ASSESSEES BANK ACCOUNT IS PAYMENT TO EITH ER M/S. BEENA ENTERPRISES OR TECHNO SHARES. M/S. BEENA ENTERPRIS ES IS ADMITTEDLY ASSESSEES OWN PARTNERSHIP CONCERN AND ENGAGED IN T HE BUSINESS OF TRADING OF TEXTILES. IT CANNOT BE RULED OUT THAT S OME CHEQUES WERE ISSUED TO THE SUPPLIERS OF M/S. BEENA ENTERPRISES AND AGAI NST SUCH CHEQUES, ASSESSEE HAS RECEIVED CASH WHICH WAS DEPOSITED BY T HE ASSESSEE IN THE IMPUGNED BANK ACCOUNT AND HENCE, IN OUR CONSIDERED OPINION, LD. CIT(A) HAS RIGHTLY UPHELD THE ADDITION TO THE EXTEN T OF PEAK CREDIT OF RS.2.50 LACS. WE HOLD SO BECAUSE WE FIND THAT THER E IS CHEQUES PAYMENT FROM THE ACCOUNT OF M/S. BEENA ENTERPRISES TO SWETA FABRICS AND IN THE BANK ACCOUNT OF THE ASSESSEE ALSO, THERE IS PAYMENT TO SWETA FABRICS OF RS.1 LAC ON 21.03.2008. CONSIDERING THE FACTS OF THE PRESENT CASE IN ITS TOTALITY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A). WE, THEREFORE, CONFIRM THE SAME. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. 9. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO. 3282/AHD/2011 6 1. DATE OF DICTATION 21/3 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23/3.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 28/3 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.28/3 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28/3/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .