ITO, Jaipur V. ASHOK KUMAR BHERWANI, Jaipur

ITA 355/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99475 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 05-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Keywords: Peak credit; Corroborative evidences; Assessment record

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 355/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2006-07 INCOME TAX OFFICER, WARD 6(1), JAIPUR CUKE VS. ASHOK KUMAR BHERWANI, 4-JA-24, JAWAHAR NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AEZPB 9110 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ R ESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJ MEHRA (JCIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 19/10/2015 MN?KKS'K .KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 06/11/2015 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M.: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 22/01/2013 PASSED BY THE LD CIT(A)-II JAIPUR FOR A.Y . 2006-07. THE RESPECTIVE GROUNDS OF APPEAL ARE REPRODUCED AS UNDE R:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN: ITA 355/JP/2013_ ITO VS. ASHOK KUMAR BHERWANI 2 (I) ACCEPTING THE WORKING OF PEAK OF CHEQUES AND CAS H DEPOSITS SUBMITTED BY THE ASSESSEE WITHOUT ANY VERIFICATION F ROM THE ASSESSMENT RECORDS AS WELL AS PROVIDING THE SAME TO THE A.O. (II) REDUCING THE ADDITION OF RS. 5,43,970/- AS AGA INST THE ADDITION OF RS. 11,18,400/- ON ACCOUNT OF NEGATIVE CASH BALANCE AS WELL AS OF RS. 16,62,370/- ON ACCOUNT OF PEAK OF CHEQUES DEPOSITED IN BANK ACCOUNT RESULTING INTO RE LIEF OF RS. 22,36,800/-. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED RETURN OF INCOME ON 31/10/2006 DECLARING TOTAL INCOME OF RS. 1,33,950/-. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSED AT AN IN COME OF RS. 31,66,855/- WHEREIN ADDITION OF RS. 13,73,395/- WAS MADE ON ACCOUNT OF PEAK BALANCE OF CASH DEPOSITED IN BANK ACCOUNT AND RS. 16,59,870/- ON ACCOUNT OF CHEQUES DEPOSITED IN THE BANK ACCOUNT. 3. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD CIT (A) AND THEREAFTER THE ASSESSEE AS WELL AS THE REVENUE HAVE PREFERRED APPEAL BEFORE THE ITAT WHEREIN THE COORDINATE BENCH OF ITAT VIDE ITS ORDER DATED 25/2/2011 PASSED IN ITA NO. 370/JP/2010 AND I TA NO. 394/JP/2010 HAS HELD THAT THE PEAK THEORY IS A MOST ACCEPTABLE THEORY IN THESE TYPE OF CASES AND THE MATTER WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER TO WORK OUT THE CORRECT PEAK OF BO TH THE AMOUNTS ITA 355/JP/2013_ ITO VS. ASHOK KUMAR BHERWANI 3 DEPOSITED THROUGH CHEQUES AND CASH. THE PRESENT PROC EEDINGS ARE, THEREFORE, ARISING OUT OF EARLIER SET ASIDE DIRECTI ONS OF THE JAIPUR BENCH OF ITAT. IN HIS ORDER DATED 09/12/2011, THE ASSESSIN G OFFICER MENTIONED THAT HE AGREES THAT INSTEAD OF TAXING WHOLE CASH CR EDIT, ONLY PEAK SHOULD BE WORKED OUT AS DIRECTED BY THE HONBLE TRIBUNAL. HO WEVER, FOR THE CHEQUES, THE SAME PRINCIPLE CANNOT BE APPLIED AS TH E CHEQUES DEPOSITED IN THE ACCOUNT ARE NOT FROM THE SAME PERSON TO WHOM THE CHEQUES WERE ISSUED AND THE ASSESSEE FAILED TO PROVE ANYTHING IN THIS REGARD. THE ASSESSING OFFICER, THEREFORE, WENT AHEAD AND MADE AD DITION OF RS. 11,18,400/- TOWARDS NEGATIVE PEAK CASH BALANCE AND R S. 16,62,370/- TOWARDS PEAK OF CHEQUES RECEIVED AND DEPOSITED IN TH E BANK ACCOUNT SEPARATELY, THUS MAKING TOTAL ADDITION OF RS. 27,80 ,770/-. THE LD CIT(A) THOUGH PRINCIPALLY ACCEPTED THE PEAK DRAWN BY THE AP PELLANT AT RS. 5,21,174/-, HOWEVER, DID NOT ACCEPT THE DEDUCTION OF OPENING CASH BALANCE OF RS. 2,00,949/- IN THE BANK ACCOUNT AND S USTAINED ADDITION OF RS. 5,43,970/- BY REDUCING THE NEGATIVE CASH BALANC E OF RS. 11,18,400/-. THE APPELLANT DID NOT APPEAL AGAINST THE SAID ORDER OF LD CIT(A) AS THE WORKING OF THE PEAK AS PER THE APPELLANTS VERSION WA S AT RS. 5,21,174/- AS AGAINST RS. 5,43,970/- WORKED OUT BY THE LD CIT(A) WITH A NOMINAL ITA 355/JP/2013_ ITO VS. ASHOK KUMAR BHERWANI 4 DIFFERENCE. HOWEVER, THE REVENUE HAS NOT ACCEPTED TH E ORDER OF THE LD CIT(A) HENCE THE PRESENT APPEAL BEFORE US. 4. FIRSTLY IT IS NOTED THAT THE COORDINATE BENCH IN HIS EARLIER ORDER DATED 25/2/2011 HAS GIVEN A CLEAR FINDING THAT THE CALCULATION SHOULD BE MADE ON THE BASIS OF PEAK OF BOTH THE AMOUNTS DEPOS ITED THROUGH CHEQUES AND IN CASH. THE RELEVANT FINDINGS OF THE CO ORDINATE BENCH IS AS UNDER:- 9. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT PEAK THEORY WHICH IS A ACCEPTABLE THEORY SHOULD BE APPLIED ON THE FACTS OF THE PRESEN T CASE. THERE ARE VARIOUS DEPOSITS IN THE BANK THROUGH CHEQUES OR CASH AND THESE DEPOSITS COULD NOT BE EXPLAINED BY THE ASSESS EE BY FILING ANY SUPPORTING EVIDENCE. THERE ARE VARIOUS WITHDRAWALS ALSO AND THEREAFTER DEPOSITS. THEREFORE, IN OUR CONSIDERED VIEW, THE PEAK AMOUNT SHOULD BE TAXED ONLY. IT WAS DEPOSITED IN C HEQUE OR IN CASH DOES NOT MAKE ANY DIFFERENCE BECAUSE THE AMOUNT DEPOSITED THROUGH CHEQUES HAS BEEN WITHDRAWN AND THE SAME HAS BEEN DEPOSITED AGAIN. THEREFORE, THE CALCULATION SHOULD BE MADE ON THE BASIS OF PEAK OF BOTH THE AMOUNT DEPOSITED THROU GH CHEQUES AND IN CASH. THE AO HAS MADE PEAK AMOUNT OF A PARTIC ULAR FIGURE WHEREAS ASSESSEE HAS MADE PEAK AMOUNT OF ANOTHER FI GURE. THEREFORE, THE MATTER IS BEING SENT BACK TO THE FILE OF AO TO ASCERTAIN THE CORRECT FIGURE OF PEAK AMOUNT. ACCORD INGLY, WE SET ITA 355/JP/2013_ ITO VS. ASHOK KUMAR BHERWANI 5 ASIDE THE ORDER OF LD. CIT )A) AND RESTORE THE MATT ER TO THE FILE OF AO TO EXAMINE THE FACTS ONCE AGAIN FOR THE PURPOSE OF ASCERTAINING THE CORRECT AMOUNT OF PEAK ON ACCOUNT O F DEPOSITS IN THE BANK IN THE SHAPE OF CHEQUES AND CASH. WE ORDER ACCORDINGLY. THE LD ASSESSING OFFICER IN COMPLETE DISREGARD TO TH E FINDING OF THE COORDINATE BENCH HAS GONE AHEAD AND HAS APPLIED A P IECEMEAL APPROACH WHEREIN HE HAS WORKED OUT THE PEAK OF CASH A ND PEAK OF CHEQUE DEPOSITED SEPARATELY AND EVEN GOING TO THE E XTENT THAT HE DOES NOT AGREE WITH THE VIEW OF THE COORDINATE BENCH. THI S SHOWS CLEARLY THAT THE LD ASSESSING OFFICER HAS COMPLETELY DISREG ARDED THE DIRECTIONS OF THE TRIBUNAL AND HAS THUS FAILED IN HIS DUTY TO FOLL OW THE JUDICIAL DISCIPLINE AS LAID DOWN. IF THE ASSESSING OFFICER HA S ANY APPREHENSION THAT THE FINDING OF THE COORDINATE BENCH WAS NOT COR RECT, THE REVENUE WAS AT LIBERTY TO FILE AN APPEAL AGAINST THE SAID OR DER BEFORE THE HON'BLE HIGH COURT. HOWEVER, IN ABSENCE OF ANY SUCH APPEAL A GAINST THE SAID ORDER, THE FINDINGS OF THE COORDINATE BENCH ARE CLE ARLY BINDING ON THE COMMISSIONER OF INCOME TAX AS WELL AS OFFICERS SUBORD INATE TO HIM. IN LIGHT OF ABOVE, WE DO NOT SEE ANY JUSTIFICATION IN T HE PRESENT APPEAL, WHICH HAS ARISEN OUT OF THE ORDER OF THE ASSESSING O FFICER IN COMPLETE DISREGARD TO THE EARLIER FINDING OF THE COORDINATE BENCH. HENCE WE DO ITA 355/JP/2013_ ITO VS. ASHOK KUMAR BHERWANI 6 NOT FEEL IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LD CIT(A). HENCE WE UPHOLD THE ORDER OF THE LD CIT(A). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/11/2015. SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;K NO (R.P.TOLANI) (VIKRAM SINGH Y ADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06 TH NOVEMBER, 2015 * RANJAN VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD 6(1), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SHRI ASHOK KUMAR BHERWANI, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 355/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR