The ITO, Ward-1(3), JAMNAGAR V. Devikaben Ranchhodbhai Harvera, JAMNAGAR

ITA 430/RJT/2011

• Counselvise Citation: 43024914 RSA 2011
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 04-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MA THEWS D R RES
• Assessee Lawyers: PRASHANT MAHARISHI
• Keywords: Peak credit; Source of fund

Judgement Text

I , H IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . . C M6 . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA NO. 430/RJT/2011 R R / ASSESSMENT YEAR 200 8 - 09 THE INCOME - TAX OFFICER, WARD - 1 (3), JAMNAGAR. ( / APPELLANT) DEVKIBEN RANCHHODBHAI HARVARA, HARIOM NIVAS, KRISHNA COLONY , ST. NO.6, 58 DIGVIJAY PLOT, JAMNAGAR. PAN : ABXPH3738G / RESPONDENT S / REVENUE BY SHRI K. C. MA THEWS, D R. RES / ASSESSEE BY SHRI PRASHANT MAHARISHI, CA. S / DATE OF HEARING 0 7 - 06 - 2013 S / DATE OF PRONOUNCEMENT 14 - 0 6 - 2013 / ORDER . . C , M6 / T. K. SHARMA, J. M. : THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 19 - 08 - 201 1 OF CIT (A), JAMNAGAR DELETING THE ADDITION OF RS. 35,10,624 / - OUT OF TOTAL ADDITION OF RS.40,68,700/ - MADE BY AO U/S.68 OF THE I.T . ACT, 1961 AND THEREBY RETAINING ONLY AN ADDITION OF RS.5,58,076/ - U/S.69 OF THE I.T. ACT, 1961 FOR THE ASSESSMENT YEAR 200 8 - 09. 2. THE FACTS IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL . SHE IS ENGAGED IN STITCHING WORK. FOR THE ASSESSMENT YEAR UN DER APPEAL, S HE FILED THE RETURN OF IN COME DECLARING TOTAL INCOME OF RS.2,01,425/ - . AO FRAMED THE ASSESSMENT U/S.143(3) OF THE I.T. ACT, 1961 ON 24 - 12 - 2010 WHEREIN, HE MADE THE ADDITION OF RS.40,68,700/ - U/S.68 OF THE I.T. ACT, 1961 . THE REASONS FOR MAKIN G THIS ADDITION CONTAINED IN PARA - 6 OF THE ASSESSMENT ORDER ARE THAT ASSESSEE FAILED TO DISCHARGE THE ONUS LIES UPON HER TO PROVE THE SOU RCE OF DEPOSIT OF RS.40,68700/ - . 3. ON APPEAL, IN THE IMPUGNED ORDER DATED 19 - 08 - 2011 THE LD. CIT (A) DELETED THE ADD ITION FOR THE DETAILED REASONS GIVEN IN PARA - 8 WHICH READ AS UNDER: - ITA 430 - 201 1 2 8. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE DISCUSSION MADE BY THE AO IN THE ASSESSMENT ORDER. DURING THE COURSE OF HEARING A BANK ACCOUNT NO. 1776 WITH THE N AWANAGAR COOPERATIVE BANK LIMITED IN THE NAME OF RANCHODBHAI MANGALDAS HARVARA WAS FOUND WHERE IN AMOUNT OF RS.40,68,700/ - WAS DEPOSITED AND SAME SUMS WERE WITHDRAWN BY ISSUES OF CHEQUES. BEFORE ME AR HAS FILED THE COPY OF THE BANK ACCOUNT AS WELL AS THE ITEM WISE SUMMARY OF THE SAME. THE AMOUNT OF DEPOSITS MADE IN THE BANK ACCOUNT IS IN CASH AND CHEQUES AS WELL AND SAME WERE ISSUED BY CHEQUES TO THE VARIOUS SHARES BROKERS. THERE ARE CASH DEPOSITS AS WELL AS BANK DEPOSITS AND SAME WAY BANK WITHDRAWALS. AT THE END OF THE YEAR THE CLOSING BALANCE OF BANK ACCOUNT WAS ONLY RS.1031.24. AS PER BANK STATEMENT OF ACCOUNT NO.17776 OF THE NAWANAGAR COOPERATIVE BANK LIMITED IN THE NAME OF RANCHODBHAI MANAGALBHAI HARWARA TOTAL AMOUNT DEPOSITED DURING THE YEAR IS R S.59,28,903.24 AND AMOUNT WITHDRAW DURING THE YEAR IS RS.59,27,872/ - . AS IT IS APPARENT FROM THE BANK ACCOUNT THAT ASSESSEE HAS CARRIED OUT SOME SHARE TRANSACTIONS, THE AMOUNT OF PROFIT IS REQUIRED TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE, IT IS AL SO TRUE THAT WHOLE AMOUNT OF DEPOSIT IN THE BANK ACCOUNT ALSO CANNOT BE ADDED. AS PER BANK STATEMENT FURNISHED ON 10.1.2008 MAXIMUM AMOUNT OUTSTANDING IN THE BANK ACCOUNT OF THE APPELLANT IS RS.558076/ - . THEREFORE PEAK AMOUNT IN THE BANK STATEMENT OF THE APPELLANT IS REQUIRED TO BE ADDED TO THE INCOME OF THE APPELLANT U/S.69 OF THE ACT. AS THE ASSESSEE HAS SOME OTHER SOURCES OF INCOME SUCH AS STITCHING CHARGES, THE CREDIT FOR THE SAME AS CONTENDED BY THE APPELLANT CANNOT BE GIVEN AS APPELLANT HAS FAILED T O PROVE THAT THE AMOUNT EARNED FROM STITCHING CHARGES HAVE DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT. THEREFORE AO IS DIRECTED TO RETAIN THE ADDITION OF RS.5,58,076/ - ONLY OUT OF THE TOTAL ADDITION OF RS.40,68,700/ - . AGGRIEVED WITH THE ORDER OF L D. CIT (A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, ON BEHALF OF REVENUE, SHRI K. C. MATHEWS, DR APPEARED AND POINTED OUT THAT IN THE IMPUGNED ORDER, THE LD. CIT (A) HAS APPLIED PEAK THEORY AND RESTRICTED THE ADDITION OF R S.5,58,076/ - IGNORING THE FACT THAT MONEY WAS WITHDRAWN BY ISSUING THE CHEQUE. BEFORE THE LD. CIT (A), ASSESSEE HAS NOT FURNISHED ANY EXPLANATION TO WHOM THE CHEQUE S W ERE ISSUED AND HOW THE AMOUNT FOR WHICH CHEQUE S, ISSUED WAS AVAILABLE WITH THE ASSESSEE FOR MAKING THE DEPOSITS IN CASH. THE LD. DR POINTED OUT THAT PEAK THEORY CAN BE APPLIED WHEN ASSESSEE CAN DEMONSTRATE WITH DOCUMENTARY EVIDENCE THAT AMOUNT WAS WITHDRAWN IN CASH AND IT WAS NOT ONLY AVAILABLE BUT ALSO RE - DEPOSITED BY THE ASSESSEE IN THE BA NK ACCOUNT. IN THE PRESENT CASE, VARIOUS WITHDRAWALS REPRESENT THE INVESTMENT MADE AND THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HER CLAIM THAT MONEY WITHDRAWN BY CHEQUE ISSUED TO VARIOUS PARTIES WAS AVAILABLE WITH THE ASSESSEE FOR RE - DEPOSITING. THEREFORE, ORDER OF LD. CIT (A) BE REVERSED AND ADDITION OF ITA 430 - 201 1 3 RS.35,10,624/ - MADE BY AO U/S.68 OF THE I.T. ACT, 1961 BE RESTORED. AS AGAINST THIS, SHRI PRASHANT MAHARISHI, CA APPEARED ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE OR DER OF LD. CIT (A) . THE COUNSEL OF THE ASSESSEE POINTED OUT THAT MAXIMUM ADDITION WHICH THE LD. CIT (A) COULD CONFIRMED WORKED OUT TO RS.4,16,651/ - AS SUBMITTED BEFORE HIM. THEREFORE, VIEW TAKEN BY LD. CIT (A) BE UPHELD. 5. AS AGAINST THIS, THE LD. DR P OINTED OUT THAT ON THE EARLIER DATE OF HEARING, TRIBUNAL ASKED THE ASSESSEE TO FURNISH THE DOCUMENTARY EVIDENCE IN SUPPORT OF HER CLAIM THAT AMOUNT WITHDRAWN BY ASSESSEE BY ISSUING A SPECIFIC CHEQUE FROM HER ACCOUNT WITH NAWANAGAR CO - OPERATIVE BANK LTD. WA S AVAILABLE FOR MAKING RE - DEPOSIT WITH THE SAID BANK BUT ASSESSEE HAS NOT FURNISHED THE SAME. THEREFORE, ADDITION MADE BY AO OF RS.40,68,700/ - U/S.68 OF THE I.T. ACT, 1961 BE RESTORED. 6. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE OR DERS OF AUTHORITIES BELOW. WE FOUND CONSIDERABLE FORCE IN SUBMISSION MADE BY LD. DR. IN ORDER TO APPLY THE PEAK THEORY, ONUS IS ON THE ASSESSEE TO PROVE THAT NECESSARY DOCUMENTARY EVIDENCE THAT WHATEVER MONEY WAS WITHDRAWN FROM THE BANK WAS AVAILABLE FOR MAKING RE - DEPOSIT WITH THE SAID BANK. IN THE PRESENT CASE, DESPITE THE OPPORTUNITY GIVEN, THE ASSESSEE FAILED TO FURNISH THE NECESSARY DOCUMENTARY EVIDENCE IN SUPPORT OF HER CLAIM THAT AMOUNT WITHDRAWN BY ISSUING SPECIFIC CHEQUE WAS AVAILED WITH HER. IN THESE CIRCUMSTANCES, THE LD. CIT (A) CLEARLY ERRED IN APPLYING PEAK THEORY WHICH IS INAPPLICABLE TO THE FACTS OF THE ASSESSEES CASE. WE THEREFORE, SET ASIDE THE ORDER OF LD. CIT (A) AND RESTORE THE ADDITION OF RS.35,10,624/ - MADE BY AO U/S.68 OF THE I.T . ACT, 1961. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED. 16. THIS O RDER PRONOUNCED IN O PEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . D. K. SRIVASTAVA ) ( . . R / T. K. SHARMA) / T. / ACCOUNTANT MEMBER H / JUDICIAL MEMBER / ORDER DATE 14 - 0 6 - 2013. /RAJKOT NVA/ - ITA 430 - 201 1 4 4 6JO O / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - THE INCOME - TAX OFFICER, WARD - 1 (3), JAMNAGAR. 2 . / RESPONDENT - DEVKIBEN RANCHHODBHAI HARVARA, HARIOM NIVAS, KRISHNA COLONY, ST. NO.6, 58 DIGVIJAY PLOT, JAMNAGAR. 3 . I / CONCERNED CIT , JAMNAGAR. 4 . - / CIT (A) , JAMNAGAR. 5 . I , I , / DR, ITAT, RAJKOT 6 . R / GUARD FILE. / BY ORDER TRUE COPY SENIOR PRIVATE SECRETARY, ITAT, RAJKOT