Chatrapal Malhotra, Bareilly V. Income Tax Officer- 1(1), Bareilly

ITA 384/LKW/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1371 (ITAT-LUCKNOW)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 11-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P K KAPOOR
• Keywords: Peak credit; Set aside
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCHSMC , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 384/LKW/2019 ASSESSMENT YEAR: 2011 - 12 CHHTRAPAL MALHOTRA C-13, GULMOHAR PARK BAREILLY V. ITO 1(1) BAREILLY TAN/PAN: APPPM4761G (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI P. K. KAPOOR, C.A. RESPONDENT BY: SHRI AJAY KUMAR, D.R. DATE OF HEARING: 11 12 2019 DATE OF PRONOUNCEMENT: 12 2019 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), BAREILLY, DATED 14/3/2019, RELATING TO ASSESSMENT YEAR 2011-12. 2. THE SINGLE ISSUE INVOLVED IN THIS APPEAL IS THE ACTION OF THE LD. CIT(A), BY WHICH HE HAS CONFIRMED AN ADDITION OF RS.11.20 LAKHS, WHICH THE ASSESSING OFFICER HAD MADE FOR UNEXPLAINED DEPOSITS IN THE BANK ACCOUNTS. 3. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT IN THE FIRST ROUND, THE ITAT IN ITS ORDER DATED 27/5/2016 HAD SET ASIDE THE ISSUE TO THE ASSESSING OFFICER WITH A DIRECTION THAT THE ASSESSING OFFICER SHALL RECOMPUTE THE PEAK CREDIT IN BOTH THE BANK ACCOUNTS BY GETTING CONSOLIDATED STATEMENT FROM THE ASSESSEE. EXPLAINING THE FACTS OF THE CASE, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION TO THE TUNE OF RS.38,09,500/- WAS MADE BY THE ASSESSING OFFICER AS ITA NO.384/LKW/2019 PAGE 2 OF 5 UNEXPLAINED DEPOSITS IN TWO BANK ACCOUNTS OF THE ASSESSEE. ON CONFIRMATION OF THE ACTION OF THE ASSESSING OFFICER, BY THE LD. CIT(A), THE ASSESSEE HAD FILED AN APPEAL BEFORE THE ITAT, WHICH HAD SET ASIDE THE PROCEEDINGS TO THE ASSESSING OFFICER VIDE ORDER DATED 27/5/2016 AND OUR SPECIFIC ATTENTION WAS INVITED TO PAPER BOOK PAGES 1 TO 3, WHERE THE COPY OF THE ORDER OF THE ITAT WAS PLACED. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT IN THE SET ASIDE PROCEEDINGS, AS PER THE DIRECTIONS OF THE ITAT, THE ASSESSEE HAD FILED CONSOLIDATED CASH BOOK, SHOWING DEPOSITS AND WITHDRAWALS FROM TWO BANK ACCOUNTS AND WHEREIN THERE WAS NO NEGATIVE BALANCE AND, THEREFORE, THE ENTIRE AMOUNT STOOD EXPLAINED. IT WAS SUBMITTED THAT THE ASSESSING OFFICER INSTEAD OF DELETING THE ADDITION, MADE THE ADDITION OF RS.11.20 LAKHS BEING THE MAXIMUM BALANCE AVAILABLE AS ON 18/10/2010 IN THE CASH BOOK OF THE ASSESSEE, WHICH IS WRONG, AS THE MAXIMUM BALANCE IN THE CASH BOOK, OF RS.11.20 LAKHS STOOD VERY MUCH EXPLAINED FROM THE REGULAR CASH IN HAND AND THE ASSESSING OFFICER MISTOOK IT AS THE PEAK CREDIT IN THE BANK ACCOUNT. THEREFORE, IT WAS PRAYED THAT THE ADDITION SUSTAINED BY THE LD. CIT(A) BE DELETED. 4. THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT THIS NEEDS VERIFICATION ON THE PART OF THE ASSESSING OFFICER, AS TO WHETHER THIS STATEMENT WAS FILED WITH THE ASSESSING OFFICER OR NOT, AS THE ASSESSEE HAD FILED CERTAIN DOCUMENTS AT A MUCH LATER DATE, AFTER NOT COMPLYING WITH VARIOUS NOTICES ISSUED BY THE ASSESSING OFFICER. 5. THE LD. COUNSEL FOR THE ASSESSEE, IN REJOINDER, INVITED OUR ATTENTION TO THE ORDER OF THE ASSESSING OFFICER AT PAGE 2, WHEREIN THE ASSESSING OFFICER HIMSELF HAD NOTED THE FILING OF THE CONSOLIDATED CASH BOOK, AND IT WAS SUBMITTED THAT FROM THIS CASH ITA NO.384/LKW/2019 PAGE 3 OF 5 BOOK, THE ASSESSING OFFICER HAD PICKED UP THE AMOUNT OF RS.11.20 LAKHS ON 18/10/2018 AS PEAK CREDIT. THEREFORE, IT WAS SUBMITTED THAT THERE IS NOTHING TO BE VERIFIED BY THE ASSESSING OFFICER AS ALL THE RELEVANT MATERIAL IS ON RECORD. 6. I HAVE HEARD THE RIVAL THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL ON RECORD. I FIND THAT THE ORIGINAL ADDITION WAS MADE TO THE EXTENT OF RS.38,09,500/- AND THE ITAT VIDE ORDER DATED 27/5/2016 HAD SET ASIDE THE ISSUE TO THE ASSESSING OFFICER AFTER RECORDING THE FOLLOWING FINDINGS: 5. AFTER HEARING THE LD. D.R. AND GOING THROUGH THE ORDERS OF THE TAX AUTHORITIES BELOW, WE NOTED THAT IN THIS CASE THE ASSESSEE HAS FILED WRITTEN SUBMISSION AND STATEMENTS OF BANK OF BARODA AS WELL AS ING VYSYA BANK BEFORE THE LD. CIT(A), THE COPIES OF WHICH WERE FILED BEFORE US. FROM THESE BANK STATEMENTS, IT IS BORNE OUT THAT NOT ONLY THERE ARE ENTRIES RELATING TO THE CASH DEPOSITS BUT THERE ARE ENTRIES IN RESPECT OF WITHDRAWAL OF CASH. FOR EXAMPLE, ON 12.8.2010 THE ASSESSEE HAS DEPOSITED A SUM OF RS.7 LAKHS AND ON THE VERY SAME DAY HE HAS WITHDRAWN A SUM OF RS.7 LAKHS. ON 21.9.2010 THE ASSESSEE HAD WITHDRAWN A SUM OF RS.7.40 LAKHS AND ON 28.9.2010 THE ASSESSEE HAD WITHDRAWN A SUM OF RS.9 LAKHS. THESE OBSERVATIONS ARE MADE ON THE BASIS OF THE STATEMENT OF ACCOUNT WITH BANK OF BARODA. SIMILAR INSTANCES ARE AVAILABLE IN THE BANK STATEMENT RELATING TO ING VYSYA BANK. IN VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER SHOULD HAVE NOT ONLY CONSIDERED THE CASH DEPOSITED BY THE ASSESSEE AND TREATED THE SAME AS UNEXPLAINED BUT SHOULD HAVE ALSO CONSIDERED THE WITHDRAWAL MADE BY THE ASSESSEE. AT THE MOST, THE PEAK DEPOSIT IN EACH OF THE BANK ACCOUNT COULD BE ASSESSED AND THAT IS ALSO TO BE UNDER SECTION 69 OF THE ACT, AND NOT UNDER SECTION 68 OF THE ACT. IN VIEW OF THESE FACTS, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT THE ASSESSING OFFICER SHALL RE-COMPUTE THE PEAK CREDIT IN BOTH THE BANK ACCOUNTS BY GETTING CONSOLIDATED STATEMENT FROM THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE WITH THE ASSESSING OFFICER AND ITA NO.384/LKW/2019 PAGE 4 OF 5 SUBMIT BEFORE HIM THE CONSOLIDATED BANK STATEMENT IN RESPECT OF BOTH THE ACCOUNTS, SO THAT PEAK CREDIT COULD BE CORRECTLY ASCERTAINED. 7. THE ABOVE DIRECTIONS TO THE ASSESSING OFFICER CLEARLY STATES THAT THE ASSESSING OFFICER WILL RECOMPUTE THE PEAK CREDIT IN BOTH THE BANK ACCOUNTS BY GETTING THE CONSOLIDATED STATEMENT FROM THE ASSESSEE. IN VIEW OF THESE DIRECTIONS, THE ASSESSEE FILED A CONSOLIDATED STATEMENT OF CASH, WHEREIN THE OPENING BALANCE AND DEPOSITS IN THESE BANK ACCOUNTS AND WITHDRAWALS FROM THESE BANKS WERE INCORPORATED. SUCH COPY OF CONSOLIDATED CASH IS PLACED AT PAGE 8 OF THE PAPER BOOK, WHEREIN THE BALANCE APPEARING AS ON 18/10/2010 IS RS.11.20 LAKHS. THIS BALANCE REPRESENTS CASH IN HAND AS ON 18/10/2010 AND IS NOT A PEAK CREDIT IN THE BANK ACCOUNTS. THE TOTAL AMOUNT DEPOSITED, AS FOUND RECORDED ON THE CREDIT SIDE OF THIS STATEMENT, AMOUNTING TO RS.38,09,500/-, STOOD FULLY EXPLAINED BY THE TOTAL DEBIT AMOUNTING TO RS.40,05,000/-. THEREFORE, ALL THE DEPOSITS IN THE BANK ACCOUNT AMOUNTING TO RS.38,09,500/- STOOD EXPLAINED AND, THEREFORE, AFTER CONSIDERING THE DEPOSITS AND WITHDRAWALS IN BOTH THE BANK ACCOUNTS, NO ADDITION IS REQUIRED TO BE MADE. IN VIEW OF THE ABOVE, I REVERSE THE ORDER OF THE LD. CIT(A) AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/12/2019. SD/ - [T.S. KAPOO R] ACCOUNTANT MEMBER DATED:11/12/2019 JJ:1112 ITA NO.384/LKW/2019 PAGE 5 OF 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSISTANT REGISTRAR