Sri Swapan Adhikary, Burdwan V. ITO,Ward 1(1),Kol., Burdwan

ITA 335/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1096 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 17-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOUMYAJIT DASGUPTA CIT REVEN
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (SMC), KOLKATA [BEFORE HONBLE SHRI P.M. JAGTAP] I.T.A. NO. 335/KOL/2017 ASSESSMENT YEAR : 2006-07 SHRI SWAPAN ADHIKARY.............................APPELLANT GOPALNAGAR, SRIPALLY, BURDWAN - 713103 [PAN : AIWPA6011B] INCOME TAX OFFICER..........................RESPONDENT WARD 1(1), AAYAKAR BHAWAN, COURT COMPOUND, BURDWAN - 713101 APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI SOUMYAJIT DASGUPTA, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : NOVEMBER 01, 2017 DATE OF PRONOUNCING THE ORDER : NOVEMBER 08, 2017 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS) BURDWAN DATED 29.11.2016 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS. 16,51,539/- MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT (A) ON ACCOUNT OF PEAK CREDITS OF THE TWO UNDISCLOSED BANK ACCOUNTS OF THE ASSESSEE BY TREATING THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF TRADING OF POTATO. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 28.10.2010 DECLARING A TOTAL INCOME OF RS. 1,82,200/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE HAS 2 I.T.A. NO. 335/KOL/2017 A.Y. 2006-07 SWAPAN ADHIKARY MAINTAINED TWO BANK ACCOUNTS WITH AXIS BANK AND THE SAME WERE NOT DISCLOSED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT. THE A.O. ALSO NOTICED THAT THERE WERE SUBSTANTIAL CASH DEPOSITS MADE BY THE ASSESSEE IN THE SAID ACCOUNT. SINCE THE ASSESSEE COULD NOT OFFER ANY SATISFACTORY EXPLANATION AS REGARDS THE SOURCE OF THE SAID DEPOSITS MADE IN HIS TWO UNDISCLOSED BANK ACCOUNTS, THE ADDITION OF RS. 16,51,539/- WAS MADE BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE ON THE BASIS OF PEAK CREDIT BALANCES OF RS. 14,83,125/- AND RS. 1,68,414/- APPEARING IN THE SAID TWO BANK ACCOUNTS DURING THE YEAR UNDER CONSIDERATION. 3. THE ADDITION OF RS. 16,51,539/- MADE BY THE A.O. ON THE BASIS OF PEAK CREDIT BALANCES APPEARING IN HIS TWO UNDISCLOSED BANK ACCOUNTS WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT (A). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT (A), IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT THE DEPOSITS FOUND TO BE MADE IN HIS TWO BANK ACCOUNTS REPRESENTED SALE PROCEEDS OF HIS REGULAR BUSINESS OF TRADING OF POTATO AND THEREFORE ADDITION, IF ANY, COULD BE MADE ON THIS ISSUE ONLY TO THE EXTENT OF GROSS PROFIT OF THE SAID TURNOVER. THE LD. CIT (A) DID NOT FIND MERIT IN THIS CONTENTION OF THE ASSESSEE IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE TO SUPPORT AND SUBSTANTIATE THE SAME AND IN PROCEEDED TO CONFIRM THE ADDITION MADE BY THE A.O. ON THE BASIS OF PEAK CREDIT BALANCES. AGGRIEVED BY THE ORDER OF THE LD. CIT (A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE 3 I.T.A. NO. 335/KOL/2017 A.Y. 2006-07 SWAPAN ADHIKARY LEARNED COUNSEL FOR THE ASSESSEE HAS REITERATED BEFORE THE TRIBUNAL THAT THE DEPOSITS FOUND TO BE MADE IN THE TWO UNDISCLOSED BANK ACCOUNTS OF THE ASSESSEE REPRESENTED THE SALE PROCEEDS OF BUSINESS OF TRADING OF POTATOES, I FIND THAT THE SAME IS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. HE HAS ALSO RAISED A NEW CONTENTION THAT THE TWO UNDISCLOSED BANK ACCOUNTS IN QUESTION WERE HELD BY THE ASSESSEE IN JOINT NAMES WITH WIFE AND SON AND THEREFORE, THE ADDITION ON THE BASIS OF PEAK CREDIT BALANCES CAN BE MADE TO THE TOTAL INCOME OF THE ASSESSEE ON PROPORTIONATE BASIS ONLY. I AM UNABLE TO ACCEPT THIS NEW CONTENTION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE. IT IS OBSERVED THAT THERE IS NOTHING WHATSOEVER AVAILABLE ON RECORD TO SHOW THAT THE CASH DEPOSITS FOUND TO BE MADE IN THE TWO UNDISCLOSED BANK ACCOUNTS IN QUESTION WERE PERTAINING TO THE OTHER JOINT ACCOUNT HOLDERS OR THAT THEY HAD OWNED THE SAME AT ANY POINT OF TIME. THERE IS ALSO NOTHING BROUGHT ON RECORD BY THE LEARNED COUNSEL FOR THE ASSESSEE TO SHOW THAT THE OTHER JOINT ACCOUNT HOLDERS HAD SOME SOURCE OF INCOME FROM WHICH ANY DEPOSITS IN CASH WERE MADE IN THESE TWO UNDISCLOSED BANK ACCOUNTS. I, THEREFORE, FIND NO MERIT IN THIS NEW CONTENTION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE AS AN ALTERNATIVE CONTENTION. I HOWEVER FIND MERIT IN THE OTHER ALTERNATIVE CONTENTION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE COMBINED PEAK CREDIT BALANCE OF THE TWO UNDISCLOSED BANK ACCOUNTS OF THE ASSESSEE ONLY CAN BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE AND NOT THE TOTAL OF PEAK CREDIT BALANCES APPEARING IN THE SAID ACCOUNTS INDIVIDUALLY, AS THE SAME IS DULY SUPPORTED BY THE DECISION OF THIS TRIBUNAL IN THE CASE OF ITO VS UDAY SHANKAR MAHAWAR VIDE AN ORDER DATED 16.07.2010 PASSED IN ITA NO. 1903/KOL/2009. I ACCORDINGLY DIRECT THE A.O. TO RESTRICT THE ADDITION ON THIS ISSUE TO THE 4 I.T.A. NO. 335/KOL/2017 A.Y. 2006-07 SWAPAN ADHIKARY EXTENT OF COMBINED PEAK CREDIT BALANCE OF THE TWO UNDISCLOSED BANK ACCOUNTS OF THE ASSESSEE IN QUESTION. THE ASSESSEE IS DIRECTED TO FURNISH THE WORKING OF COMBINED PEAK CREDIT BALANCE BEFORE THE ASSESSING OFFICER WHO SHALL VERIFY THE SAME AND RECOMPUTED THE ADDITION TO BE MADE ON THIS ISSUE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH NOVEMBER, 2017. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER DATED: 08/11/2017 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. SHRI SWAPAN ADHIKARY, GOPALNAGAR, SRIPALLY, BURDWAN - 713103 2. ITO, WARD 1(1), AAYAKAR BHAWAN, COURT COMPOUND, BURDWAN - 713101 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA