ITO, New Delhi V. Sh Jagdish Kakker, New Delhi

ITA 4126/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77814 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: R B ARORA
• Keywords: Income from undisclosed sources; Peak credit
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. GEORGE GEORGE K., JM AND SH. B. C. MEENA , AM ITA NO. 4126/DEL/2012 : ASS TT. YEAR : 2008-09 INCOME TAX OFFIER, WARD 28(4), NEW DELHI VS SHRI JAGDISH KAKKER, FLAT NO. E-501, RAJ HANS APPTT., AHINSA KHAND, PART-1, INDRAPURAM, DISTT. GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. ANVPK4259M ASSESSEE BY : SH. R. B. ARORA, ADV. REVENUE BY : SH. S. N. BHATIA, DR DATE OF HEARING : 24.7.2014 DATE OF PRONOUNCEMENT : 25.7.2014 ORDER PER GEORGE GEORGE K., JM: THIS APPEAL AT THE INSTANCE OF DEPARTMENT IS DIRECT ED AGAINST CIT(A) ORDER DATED 16.5.2012. THE RELEVANT ASSESSMENT YEAR IS 2008-09. 2. THE GROUNDS RAISED READ AS FOLLOWS:- 1. ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDEN CE WITHOUT GIVING ANY OPPORTUNITY TO THE A.O. 2. ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. RS . 13,48,700/- OUT OF THE TOTAL ADDITION OF RS. 14,48,700/- MADE BY THE A.O O N ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES. ITA NO. 4126/DEL/2012 JAGDISH KAKKER 2 3. BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE IS AN INDIVIDUAL. HE WAS ENGAGED IN SA NITARY AND HARDWARE BUSINESS DURING THE RELEVANT ASSESSMENT YE AR. THE ASSESSING OFFICER HAD RECEIVED A.I.R INFORMATION THAT THE ASS ESSEE HAD INCURRED CREDIT CARD EXPENDITURE AMOUNTING TO RS. 14,48,700/ - (ABN AMRO BANK CREDIT CARD). THE ASSESSEE WAS ASKED TO EXPLAIN THE SAID EXPENDITURE AND IN ABSENCE OF A REPLY THE SAME WAS ADDED U/S 69 OF THE ACT AS UNDISCLOSED INCOME. 4. AGGRIEVED BY THE SAID ADDITION THE ASSESSEE FILE D AN APPEAL BEFORE THE CIT(A). BEFORE THE FIRST APPELLATE AUTHORITY, IT WA S SUBMITTED THAT THE ASSESSEE HAD ONLY MINOR BUSINESS TRANSACTIONS AND D ID NOT INCUR THE HUGE EXPENDITURE OF 14,48,700/- AS CREDIT CARD EXPENSES. IT WAS SUBMITTED THAT THE ASSESSEE IS A SMALL TIME BUSINESSMAN AND THE BU SINESS HAS BEEN SINCE CLOSED AND HE IS NOW WORKING AS A SALARIED EMPLOYEE . THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. THE FINDINGS OF THE CIT (A) READS AS FOLLOWS:- 3.3 I HAVE CONSIDERED THE ORDER OF THE A.O AND THE SUBMISSIONS OF THE ASSESSEE AND I FIND SOME MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE A.O HAS NOT COLLETED ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAD INCURRED THE EXPENDITURE OF RS. 14,48,700/- THROUGH HIS CRED IT CARD AND AS SUCH THERE IS NO JUSTIFICATION FOR MAKING ADDITION UNDER THE HEAD CREDIT CARD EXPENDITURE. HOWEVER, IT IS SEEN THAT THE A.O HAD A CTUALLY RECEIVED THE AIR INFORMATION WHICH WAS ACTUALLY REGARDING THE CA SH DEPOSITS/TRANSACTIONS OF RS. 14,48,700/- THROUGH AB N AMRO BANK WHICH THE A.O MISTAKENLY TOOK AS EXPENDITURE UNDER THE HE AD CREDIT CARD. FURTHER, IT IS SEEN THAT THE ASSESSEE IS HAVING A B ANK ACCOUNT WITH ABN AMRO BANK ACCOUNT IN WHICH THERE WAS A CASH DEPOSIT OF RS. 14,53,700/- BUT IT IS ALSO SEEN THAT THE CASH DEPOSITS ARE OF S MALLER AMOUNTS AND ON VARIOUS DATES AND THERE ARE LARGE NUMBERS OF TRANSA CTIONS OF CASH ITA NO. 4126/DEL/2012 JAGDISH KAKKER 3 DEPOSITS AND WITHDRAWALS. IT IS ALSO SEEN THAT THE TOTAL DEPOSITS IN THIS BANK ACCOUNT IS OF RS. 21,72,616/- WHICH INCLUDES T HE CASH DEPOSITS OF RS. 14,53,700/- ON VARIOUS DATES. IT IS ALSO SEEN THAT ALTHOUGH THE CLOSING PEAK BALANCE IN THE BANK ACCOUNT IS AVERAGE RS. 25, 000/- TO RS. 50,000/- BUT THERE ARE VARIOUS CLOSING PEAK BALANCE ABOVE RS . 50,000/- ALSO AND THE MAXIMUM CLOSING BALANCE IS OF RS. 1,04,174/- ON 12/10/2007. 3.4 AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANC ES OF THE CASE AND AFTER TAKING A HOLISTIC VIEW PARTICULARLY THE FACT THAT T HE ASSESSEE WAS A SMALL TIME BUSINESSMAN HAVING VERY SMALL TURNOVER, I AM O F THE VIEW THAT THE ENDS OF JUSTICE WILL BE MET IF A LUMP SUM ESTIMATED ADDITION OF RS. 1,00,000/- IS CONFIRMED CONSIDERING THE CLOSING BAL ANCE PEAK CREDIT AND VARIOUS CASH DEPOSITS AND OTHER UNEXPLAINED INCOME AND ACCORDINGLY, THE ADDITION TO THE EXTENT OF RS. 1,00,000/- IS CONFIRM ED AND THE BALANCE ADDITION OF RS. 13,48,700/- (RS. 14,48,700/- (-) RS . 1,00,000/-) IS DELETED. 5. THE REVENUE BEING AGGRIEVED IS AN APPEAL BEFORE US. THE LD. DR SUBMITTED THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF 13,48,700/- OUT OF THE TOTAL ADDITION OF RS. 14,48,700/- MADE B Y THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE CIT(A) HAS ADMITTED ADDIT IONAL EVIDENCE AND HAS NOT GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSING O FFICER TO EXAMINE THE SAME. 6. THE LD. AR, ON THE OTHER HAND, SUBMITTED THAT NO FRESH EVIDENCE WAS PRODUCED BEFORE THE FIRST APPELLATE AUTHORITY. IT W AS SUBMITTED THAT THE A.I.R INFORMATION THAT WAS RECEIVED BY THE DEPARTME NT WAS WITH REFERENCE TO CASH DEPOSITS IN ROYAL BANK OF SCOTLAND (THE NAM E CHANGED FROM ABN AMRO BANK) AND THE DEPARTMENT HAD MADE A MISTAKE IN TAKING DEPOSITS OF SALE PROCEEDS AS EXPENDITURE FOR CREDIT CARD PAYMEN TS. ITA NO. 4126/DEL/2012 JAGDISH KAKKER 4 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSING OFFICER COULD HAVE EASILY REALIZED TH AT THERE WAS A PRIMA FACIE MISTAKE ON THE PART OF THE REVENUE TO PROCESS THE INFORMATION RECEIVED THROUGH THE A.I.R. THE A.I.R INFORMATION W AS ACTUALLY REGARDING THE CASH DEPOSITS OF RS. 14,48,700/- THROUGH ABN AM RO BANK. WE HAVE PERUSED THE BANK STATEMENT OF THE ABN AMRO BANK WHI CH IS PLACED AT PAGES 14 TO 26 OF THE PAPER BOOK FILED BY THE ASSES SEE. IT IS SEEN THAT THE CASH DEPOSITS ARE SMALL AMOUNTS ON VARIOUS DATES. T HERE IS ALSO CASH WITHDRAWAL. THE ASSESSEES CLAIM IS THAT CASH DEPOS ITS ARE OUT OF SALE PROCEEDS RECEIVED IN CASH AND CASH WITHDRAWAL ARE F OR MAKING PURCHASES FROM WHOLESALERS AND SMALL MANUFACTURES. THE ASSESS ING OFFICER WITHOUT VERIFY THE MATTER PROCEEDED TO MAKE AN ADDITION U/S 69 OF THE ACT. THE CIT(A) HAS CORRECTLY ANALYZED THE ISSUE IN QUESTION AND REDUCED THE ADDITION FROM RS. 14,48,700/- TO RS. 1,00,000/-. TH E CIT(A) FINDING HAS NOT BEEN CONTROVERTED/DISPELLED BY THE REVENUE. THE REFORE, WE SEE NO REASON TO INTERFERE WITH THE CIT(A) AND WE UPHOLD T HE SAME. IT IS ORDER ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/7/2014 SD/- SD/- (B. C. MEENA) (G EORGE GEORGE K.) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 25/7/2014 *SUBODH* ITA NO. 4126/DEL/2012 JAGDISH KAKKER 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 24.7.2014 PS 2. DRAFT PLACED BEFORE AUTHOR 24.7.2014 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.