ITO, New Delhi V. Sh. Mofijul Rahman Sekh, New Delhi

ITA 357/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3642 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 21-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Peak credit
• Section: 143(3); 68; 2

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE SMT BEENA A PILLAI , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER I TA NO . 357/DEL/2014 (ASSESSMENT YEAR: 2009 - 10 ) ITO, WARD - 23 (1), NEW DELHI VS. MOFIJUL RAHMAN SEKH, 172, 3 RD FLOOR, SHAHPUR JAT, NEW DELHI PAN:AHWPM2043E (APPELLANT) (RESPONDENT) REVENUE BY : SH. RAJESH KUMAR, SR. DR ASSESSEE BY: NONE DATE OF HEARING 21/02 / 2017 DATE OF PRONOUNCEMENT 10 / 04 / 2017 O R D E R PER PRASHANT MAHARISHI , A . M . 1. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) XXIII, NEW DELHI DATED 18.11.2013 FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THAT LD. CIT(A) HAS ERRED IN HOLDING THAT ADDITION U/S 68 CANNOT BE MADE ON THE BASIS OF UNEXPLAINED CREDIT ENTRIES/DEPOSITS IN ASSESSEE'S BANK ACCOUNT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THAT LD.CIT(A) HAS ERRED IN ACCEPTING THE ASSESSEE'S PLEA THAT DEPOSITS IN HIS BANK ACCOUNT PERTAINS TO A THIRD PERSON NAMELY SH. JAHANGIR KHAN, DESPITE THE FACT THAT THE ASSESSEE NOT ONLY FAILED TO PRODUCE SH JAHANGIR KHAN BEFORE THE AO FOR EXAMINATION BUT ALSO FAILED TO FURNISH ANY DOCUMENTS IN SUPPORT OF HIS CLAIM THAT DEPOSITS IN HIS BANK ACCOUNT PERTAINS TO THIRD PERSON NAMELY SH JAHANGIR KHAN. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THAT LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.42,90,400/ - ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S 68 OF T HE INCOME TAX ACT, 1961. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 3. THE ASSESSEE IS AN INDIVIDUAL, WHO FILED HIS RETURN OF INCOME ON 03.08.2009 SHOWING INCOME OF RS. 153204/ - . SUBSEQUENTLY, ACCORDING TO AIR INFORMATION IT WAS FOUND THAT THE ASSESSEE HAS DEPOSITED AND WITHDRAWN FROM HIS BANK ACCOUNT WITH ICICI BANK. IT WAS STATED BY THE ASSESSEE THAT THE WHOLE TRANSACTION IS MADE O F RS. 4290400/ - BY HIS FRIEND MR. JAHAGIR KHAN. THE LD ASSESSING OFFICER DISBELIEVED THIS STATEMENT AND MADE THE ADDITION OF RS. 4290400/ - U/S 68 OF THE ACT AND PASSED ASSESSMENT ORDER PAGE 2 OF 2 U/S 143(3) ON 23.12.2011 AT INCOME OF RS. 4443604/ - . THE ASSESSEE FILED AN APPEAL BEFORE THE LD CIT(A) WHO IN TURN UPHELD THE ADDITION OF RS. 1 LACK ONLY. THEREFORE, THE REVENUE IS IN APPEAL BEFORE US BY RAISING THE ONLY GROUND OF APPEAL. 4. THE LD DR RELIED UPON THE O RDER OF THE LD ASSESSING OFFICER. ON BEHALF OF THE ASSESSEE NONE APPEARED DESPITE SERVICE OF THE NOTICE AND THEREFORE, THE APPEAL IS DECIDED ON MERIT. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. THE LD CIT(A) HAS PERUSED THE CASH FLOW STATEMENT AND THE BANK ACCOUNT OF THE APPELLANT AND AFTER THAT HAS HELD THAT MAXIMUM AMOUNT STANDING TO THE CREDIT OF THE APPELLANT DURING THE YEAR IS ONLY RS. 50751/ - ON 22.09.2008. HE FURTHER MENTIONED THAT THE OPENING BALANCE OF THE BANK ACCOUNT IS RS. 33179/ - . AGAINST THIS THE LD ASSESSING OFFICER HAS MADE ADDITION OF ALL THE CREDITS MADE IN THE BOOKS OF ACCOUNT WITHOUT LOOKING AT THE CASH WITHDRAWAL FROM THE BANK ACCOUNT AS WELL AS THOROUGH ATM. IN SPITE OF THIS FACT THE LD CIT(A) HAS CONFIRMED THE AD DITION OF RS. 1 LAC. THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CRAFTSMEN OF LADIES GARMENTS. IT IS AN ESTABLISHED FACT THAT NOT ALL CREDITS IN BANK ACCOUNTS WITHOUT GIVING SET UP OFF CASH WITHDRAWAL CAN BE ADDED IN THE HAND S OF THE ASSESSEE. IT IS ALSO UNDISPUTED THAT IN SUCH CASES ONLY PEAK BALANCE IN THE BANK ACCOUNT AT THE MOST CAN BE TAXED AS UNDISCLOSED INCOME OF THE ASSESSEE. IT IS ALSO NOT DENIED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS. IN THESE CIRCUMSTANCES THE LD DR COULD NOT POINT OUT THE ERROR IN THE ORDER OF THE LD CIT(A) WHO IN FACT UPHELD ADDITION MUCH MORE THAN THE PEAK BALANCE IN THE BANK ACCOUNT OF THE ASSESSEE. IN THE RESULT WE FIND NO ERROR IN THE ORDER OF THE LD CIT(A) IN DELETING THE ABOVE ADDITION EXCEPT RS. 1 LAC. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 0 / 04 / 2017 . - S D / - - S D / - ( BEENA A PILLAI ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 0 / 04 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI