PUSHPARAJ SHETTY, MUMBAI V. ITO RG 22(2)2, VASHI

ITA 3459/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7741 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 18-05-2016
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 3459/M/2016 (AY 2005 - 2006) PUSHPARAJ SHETTY, 4D VIJAYAVIHAR CHS LTD , SION TROMBAY ROAD, CHEMBUR, MUMBAI - 4000071. / VS. ITO - RANGE 22(2) - 2, MUMBAI. ./ PAN : AAQPS5902B ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HARIDAS BHATT / RESPONDENT BY : MS. BEENA SANTOSH, DR / DATE OF HEARING : 21 .03.2017 / DATE OF PRONOUNCEMENT : 29 .03.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 18.5.2016 IS AGAINST THE ORDER OF THE CIT (A) - 25, MUMBAI DATED 26.02.2016 FOR THE ASSESSMENT YEAR 2005 - 06. 2. IN THIS APPEAL, THE CORE ISSUE RAISED BY THE ASSESSEE RELATES TO THE PENALTY U/S 271(1)(C) OF THE ACT. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE , WHO IS AN INDIVIDUAL, RUNS TRAVEL BUSINESS. THE TICKETS SOLD FOR CERTAIN AR EAS, GIVEN TO AN AGENT BY NAME PRASHANT C UDIPIKAR, WHO DEPOSITED THE PROCEEDS TO HIS PERSONAL BANK ACCOUNT. THE SAID ACCOUNT WAS SUBSEQUENTLY OWNED BY THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS, AO NOTED THE TOTAL DEPOSITS IN THE SAID ACCOUNT AMOUNTING TO RS. 36,53,302/ - . IN THE ASSESSMENT, AO ADDED THE ENTIRE AMOUNT AS ADDITION. ON APPEAL, CIT (A) RESTRICTED THE ADDITION TO PEAK CREDIT OF RS. 6,01,040/ - . NO FURTHER APPEAL IS FILED ON QUANTUM APPEAL. AO LEVIED THE PENALTY ON THE SAID ADDITION AMOUNTING TO RS. 1,83,918/ - . 3. ON THE ABOVE BACKGROUND FACTS OF THE CASE, LD COUNSEL FOR TH E ASSESSEE SUBMITTED THAT OUT OF GROSS RECEIPTS RS. 6 LAKHS LOAN TAKEN BY MR. PRASHANT C UDIPIKAR AND WAS ERRONEOUSLY CONSIDERED FOR WORKING OUT THE PEAK CREDIT IF THE SAME IS GIVEN FOR THE BENEFIT OF REDUCTION, THE PEAK CREDIT WILL FALL TO MINIMUM. FURTHER, 2 MENTIONING THAT IT IS A CASE OF PEAK ADDITION, WHICH IN PRINCIPLE IS A KIND OF AD - HOC ADDITION, WHICH IS NOT IN THE NATURE O F CONCEALED INCOME SUPPORTED BY ANY TANGIBLE INCRIMINATING MATERIAL. FOR THIS PROPOSITION, LD COUNSEL FOR THE ASSESSEE RELIED ON VARIOUS DECISIONS. 4. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS TH E RELEVANT MATERIAL PLACED BEFORE HE TRIBUNAL, I FIND, THE BANK ACCOUNT UNDER CONSIDERATION WAS A DISCLOSED ONE IN THE BOOKS OF ACCOUNT OF SHRI PRASHANT C UDIPIKAR, WHO SUBSEQUENTLY CLAIMED THE SAME BELONGING TO THE ASSESSEE, THE OWNER OF THE BUS SERVICES. T HEREFOR E, I FIND THERE IS AN ELEMENT OF DEBATABILITY ON THE OWNERSHIP OF THE BANK ACCOUNT. IN ANY CASE, IT IS A CASE OF PEAK CREDIT ADDITION, WHICH CANNOT BE TREATED ON PAR WITH STRAIGHT CASE OF CONCEALED INCOME. CONSIDERING THE SAME, I AM OF THE OP INION, THE BENEFIT OF DOUBT SHOULD GRANT TO THE ASSESSEE SO FAR AS THE PENALTY PROCEEDINGS ARE CONCERNED. ON THIS REASONING, I AM OF THE VIEW, IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. WITH THESE OBSERVATIONS AND REASONS, THE GRO UNDS RAISED BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MARCH, 2017. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 29.03.2017 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 3 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI