ACIT, UDAIPUR V. Shri Abhay Kumar Jain, UDAIPUR

ITA 329/JODH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70268 (ITAT-JODHPUR)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 10-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R H GOHEL
• Keywords: Unexplained investment; Opportunity of being heard; Peak credit; Additional evidence
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.329/JODH/2013 (A.Y. 2006-07) ACIT, CIRCLE-1, VS. SHRI ABHAY KUMAR JAIN, UDAIPUR. 8A, MAHAVEER COLONY, SECTOR-4, HIRAN MAGRI, UDAIPUR. PAN NO. ADQPJ 2584 B (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI R.H. GOHEL- D.R. DATE OF HEARING : 31/10/2013. DATE OF PRONOUNCEMENT : 31/10/2013. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 01/03/2013 OF LD. CIT (A), UDAIPUR. AT THE TIME O F HEARING, NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE NEITHER ANY ADJOU RNMENT WAS SOUGHT. WE, THEREFORE PROCEEDED EXPARTE QUA THE ASSESSEE AND THE APPEAL IS 2 DISPOSED OFF ON MERIT AFTER HEARING THE LEARNED D.R . THE ONLY GROUND RAISED IN THIS APPEAL READS UNDER:- 1. ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES O F THE CASE THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION MADE U /S 68 OF THE ACT OF RS. 13,97,570/- TO RS. 3,02,000/- BY APPLYING PEAK CREDIT PRINCIPLE WHICH IS NOT APPLICABLE IN THE INSTANT CASE AS THE ASSESSEE HAS NOT MADE CASH WITHDRAWAL FROM THE BANK UPTO 29/09/2005. 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE F ILED RETURN OF INCOME ON 07/11/2006 DECLARING TOTAL INCOME OF RS. 99,930/. THE ASSESSMENT WAS FRAMED UNDER SECTION 144 OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS ACT, IN SHORT) AND TH E ASSESSING OFFICER MADE THE ADDITION OF RS. 13,97,570/-, WHICH WAS THE AMOUNT DEPOSITED ON VARIOUS OCCASIONS BY THE ASSESSEE IN THE BANK AC COUNT. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND SUBMITTED THAT DURING THE YEAR, HE HAD D EPOSITED AN AMOUNT OF RS. 4,00,000/- IN HIS JOINT BANK WITH INDUSIND B ANK, UDAIPUR. THIS AMOUNT WAS DEPOSITED, OUT OF THE CONSOLIDATED CASH BALANCE OF RS. 2,37,579/- BROUGHT FORWARD FROM THE PREVIOUS YEAR, RS. 71,764/- RECEIVED BACK FROM RELATIVES AND RS. 60,000/- WAS TAKEN FROM THE FRIENDS. THE ASSESSEE ALSO NARRATED THE OTHER INSTANCES REGARDIN G DEPOSITS IN THE BANK ACCOUNT, WHICH HAS BEEN DISCUSSED BY THE LEARNED CI T(A) IN PAGES NO. 3 TO 7 OF THE IMPUGNED ORDER. THE ASSESSEE ALSO FURNISH ED CERTAIN NEW 3 EVIDENCES BEFORE THE LEARNED CIT(A), WHO ASKED THE ASSESSING OFFICER TO GIVE HIS REMAND REPORT ON THE ADDITIONAL EVIDENCES. THE ASSESSING OFFICER GAVE HIS REPORT VIDE LETTER DATED 27/02/2013, WHICH HAS BEEN DISCUSSED BY THE LEARNED CIT(A) AT PAGES NO. 8 & 9 OF THE IMP UGNED ORDER. THE ASSESSING OFFICER ALSO STATED THAT THE ADDITIONAL E VIDENCES MAY NOT BE ADMITTED. 4. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT OF THE ASSESSING OFFICER OBSE RVED THAT THE ASSESSING OFFICER WAS JUSTIFIED IN TREATING THE CRE DIT ENTRIES IN THE BANK ACCOUNT OF THE ASSESSEE AS UNEXPLAINED UNDER SECTIO N 68 OF THE ACT, BUT IN VIEW OF THE SUBMISSIONS OF THE A/R AND FINDINGS OF THE ASSESSING OFFICER, LEARNED CIT(A) INCLINED WITH THE CONTENTIO N OF THE ASSESSEE THAT ONCE IT WAS A CASE OF THE ASSESSEE THAT THE DEPOSIT S TO AGREE BELONG TO THE ASSESSEE, THEN THE BENEFIT OF PEAK CREDIT NEEDS TO BE ALLOWED. THE LEARNED CIT(A) WAS OF THE VIEW THAT THE SAID PEAK C REDIT PRINCIPLE IS APPLICABLE IN A CASE WHERE SEVERAL CREDIT AND DEBIT ENTRIES WERE FOUND IN ONE ACCOUNT. ACCORDING TO HIM, THE FUNDS OPERATED FROM SUCH ACCOUNT SHOULD BE TAKEN TO BE ONE AND HENCE TO AVOID MULTIP LE COUNTING OF THE SAME SUMS, ONLY HIGHEST OR PEAK OF THE AMOUNTS IN T HAT ACCOUNT SHOULD BE 4 TAKEN AS UNEXPLAINED INVESTMENT. HE, THEREFORE, CO NSIDERED IT REASONABLE AND JUSTIFIED TO TAKE THE PEAK CREDIT WH ICH AS PER THE DETAILS FILED BY THE ASSESSEE WORKS OUT TO RS. 3,02,000/-. ACCORDINGLY, THE ADDITION TO THE EXTENT OF RS. 3,02,000/- WAS SUSTAI NED. NOW THE DEPARTMENT IS IN APPEAL. 5. LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE LEARNED CIT(A) HAD NOT CONSIDERE D THE CORRECT PEAK AND ONLY ACCEPTED THE SUBMISSIONS OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE MATTER MAY BE SENT BACK TO THE A SSESSING OFFICER TO DETERMINE THE CORRECT PEAK AND TO MAKE THE ADDITION ON THE BASIS OF CORRECT PEAK AMOUNT. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE LEARNED D .R. AND THE MATERIAL ON RECORD, IT APPEARS THAT THE LEARNED CIT (A) SIMPLY ACCEPTED THE PEAK AMOUNT MENTIONED BY THE ASSESSEE. IN OUR OPINION, IT WOULD BE FAIR AND REASONABLE IF THE MATTER IS RESTORED TO TH E ASSESSING OFFICER FOR WORKING OUT THE CORRECT PEAK IN THE BANK ACCOUNT AN D THEN MAKE THE ADDITION (IF ANY) AFTER PROVIDING DUE AND REASONABL E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO FREE T O ADDUCE ANY EVIDENCE 5 IN SUPPORT OF HIS CLAIM RELATING TO THE WORKING OF THE PEAK IN THE BANK ACCOUNT. 7 . IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 31 ST OCTOBER, 2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31 ST OCTOBER , 2013. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.