The ITO, Ward-7(1)(4), Ahmedabad V. Ms. Neepa Amit Dalal, Ahmedabad

ITA 454/AHD/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9984 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 03-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Keywords: Peak credit
• Section: 143(3); 142(1); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.454/AHD/2015 (ASSESSMENT YEAR : 2010-11) ITO, WARD 7(1)(4), AHMEDABAD. VS. MS. NEEPA AMIT DALAL, 401, SATYAM TOWER, NEW VIKAS GRUH ROAD, PALDI, AHMEDABAD. [PAN NO. AGFPD 8330 B] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S. K. DEV, SR. D.R. RESPONDENT BY : SHRI ASEEM L. THAKKAR, A.R. DATE OF HEARING 27.03.2019 DATE OF PRONOUNCEMENT 17.05.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE REVENUE IS DIRECTE D AGAINST THE ORDER DATED 31.12.2014 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS)-7, AHMEDABAD UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) ARISING OUT OF THE ORDER DATED 29.03.2013 PASSED BY THE INCOME TAX OFFICER, WARD 13(4), AHMEDABAD FOR THE ASSESSMENT YEAR 2010- 11. 2. THE ASSESSEE FILED HER RETURN OF INCOME ON 08.10 .2010 THROUGH ELECTRONIC MEDIA DECLARING TOTAL INCOME AT RS.1,14, 000/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT. UNDER SCRUTINY, THROUGH CASS AND NOTICE U/S 143(2) ITA NO.454/AHD/2015 ITO VS. MS. NEEPA AMIT DALAL ASST.YEAR 2012-13 - 2 - DATED 03.08.2012 WAS SERVED UPON THE ASSESSEE FOLLO WED BY A FRESH NOTICE U/S 142(1) ALONG WITH QUESTIONNAIRE DATED 23.08.2012. DURING THE COURSE OF ASSESSMENT PROCEEDING, IT WAS FOUND THAT THE ASSESSEE HAS DEPOSITED CASH OF RS.1,28,08,400/- IN HER ACCOUNT LYING WITH AHMEDABAD MERCANTILE CO-OP BANK LTD. WHICH FOUND TO BE A JOINT ACCOUNT WITH HER FATHER NAMELY SHRI AMITBHAI SITAPCHAND DAL AL, WHEREUPON A SHOW CAUSE DATED 19.12.2012 WAS SERVED UPON THE ASSESSEE ASKING HER TO REPLY AS TO WHY THE AMOUNT OF RS.1,28,08,400/- SHOULD NOT BE AD DED TO HER INCOME. IN REPLY TO THAT, THE ASSESSEE SUBMITTED THAT SUCH CAS H DEPOSITS APPEARING IN THE AMCO BANK ACCOUNT ARE THE BUSINESS TRANSACTIONS OF HER FATHER IN THE PROPRIETARY BUSINESS IN THE NAME OF ALLOY STEEL ENT ERPRISES. IT WAS FURTHER STATED THAT THE LOAN WAS TAKEN FROM SHROFFS IN CASH AND RE-PAID IN CHEQUE WRITTEN ONE OR TWO WEEKS TIME. THE ASSESSEE, HOWEV ER, COULD NOT BRING HER FATHER DUE TO HIS SEVERE ILLNESS OF CARDIOVASCULAR PROBLEM AND KIDNEY FAILURE. IT WAS ALSO POINTED OUT THAT THE SAID BUSINESS WAS CLO SED DOWN FROM JANUARY, 2012 DUE TO SUCH SEVERE ILLNESS OF HER FATHER. HOWE VER, THE LEARNED AO FINALIZED SUCH ASSESSMENT BY MAKING ADDITION OF THE ENTIRE AMOUNT OF RS.1,28,08,400/- AS UNEXPLAINED CASH DEPOSIT BY OBS ERVING THAT NO DOCUMENTARY EVIDENCE OR PROOF HAS BEEN SUBMITTED BY THE ASSESSEE ESTABLISHING SUCH CASH DEPOSITS MADE BY HER FATHER. IN APPEAL, S UCH ADDITION WAS RESTRICTED TO THE AMOUNT OF RS.5,38,084/- ON PEAK BALANCE. HEN CE, THE INSTANT APPEAL FILED BY THE REVENUE IS BEFORE US. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ENTIRE EVIDENCES RELATING ITA NO.454/AHD/2015 ITO VS. MS. NEEPA AMIT DALAL ASST.YEAR 2012-13 - 3 - TO THE DEPOSITS MADE BY THE ASSESSEES FATHER ALONG WITH OTHER RELEVANT DOCUMENTS RELATING TO HER FATHERS BUSINESS WAS THO UGH SUBMITTED BEFORE THE LEARNED AO, THE SAME WAS NOT TAKEN INTO CONSIDERATI ON AT ALL. ON THE APPELLATE PROCEEDING, UPON GOING THROUGH THE SAID DOCUMENTS S UBMITTED BY THE ASSESSEE, THE LEARNED CIT(A) RESTRICTED SUCH ADDITION TO THE TUNE OF RS.5,38,084/- BEING THE PEAK OF BALANCE OF THE BANK ACCOUNT AS ON 12.03 .2010. TAKING INTO CONSIDERATION THE SUBSTANTIAL ROTATION OF THE MONEY IN THE BANK, THERE WAS NO SUCH JUSTIFICATION IN MAKING ADD ITION BY THE LEARNED AO OF THE ENTIRE AMOUNT ON ASSUMPTION THAT THE APPELLANT IS THE ILLEGAL OWNER OF THE IMPUGNED CASH DEPOSITS AS SUBMITTED BY THE LEARNED AO. FURTHER THAT, THE AO FAILED TO APPRECIATE THAT THE APPELLANT HAD DENIED TO MAKE ANY SUCH DEPOSITS AND THE SAME IS EVIDENT FROM THE SAMPLE OF PAYING-I N-SLIP FOR DEPOSIT OF CASH IF EXAMINED. IT WOULD BE FOUND THAT THE SAME WERE NOT IN APPELLANTS HAND WRITING. APART FOR THAT THE APPELLANT HAVING DISOWN ED IT FROM DAY ONE. HENCE, THE CONDITIONS FROM APPLYING SECTION 69/69A ARE NOT FULFILLED IN THIS CASE AND THUS THE LEARNED AOS ORDER IS NOT SUSTAINABLE IN E YE OF LAW. THE LEARNED CIT(A) TOOK NOTE OF IT AND PASSED ORDERS TAKING INT O CONSIDERATION THE PEAK OF BALANCE WHICH IS AT THE MOST COULD HAVE BEEN DONE W HILE MAKING ADDITION. HE, THEREFORE PRAYS FOR REJECTION OF THIS DISMISSAL OF APPEAL PREFERRED BY THE REVENUE. ON THE CONTRARY THE LEARNED DR RELIED UPON THE ORDER PASSED BY THE LEARNED AO. 4. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD. IT APPEARS FROM THE RECORD THAT DURING THE COURSE OF APPELLATE PROCEEDING THE APPELLANT FURTHER SUBMITTED BEFORE T HE LEARNED CIT(A) THAT THE ITA NO.454/AHD/2015 ITO VS. MS. NEEPA AMIT DALAL ASST.YEAR 2012-13 - 4 - LEARNED AO HAS FAILED TO APPRECIATE THAT RIGHT FROM THE EARLY STAGE OF THE ASSESSMENT PROCEEDINGS AND EVEN IN THE STATEMENT RE CORDED ON OATH U/S 131, THE APPELLANT HAD IN NO UNCLEAR TERMS POINTED OUT THAT THE TRANSACTIONS IN THE SAID BANK ACCOUNT WERE MADE BY HER FATHER SHRI AMIT S. S HAH AND THE SAME DID NOT BELONG TO HER. THE INITIAL BURDEN CAST UPON THE APP ELLANT TO EXPLAIN THE CASH DEPOSIT IN THE SAID BANK ACCOUNT WAS FULLY DISCHARG ED AND THEREFORE, THE ONUS LIES UPON THE AO TO ESTABLISH THAT THE IMPUGNED CAS H DEPOSITS WERE MADE BY THE APPELLANT AND NOT BY HER FATHER. MERELY BECAUSE THE BANK ACCOUNT WAS A JOINT ONE ALONG WITH HER FATHER THERE CANNOT BE ANY FORMATION OF OPINION THAT THE ACCOUNT WAS OPERATED BY HER AND ALL THE TRANSAC TIONS THEREIN WERE MADE BY HER OR BELONG TO HER IN ABSENCE OF CONCLUSIVE EVIDE NCE TO THAT EFFECT. WITHOUT PREJUDICE TO THE ABOVE SUBMISSION THE APPELLANT FUR THER STATED THAT THE AO OUGHT NOT TO HAVE BEEN MADE ADDITION OF THE ENTIRE IMPUGNED CASH DEPOSITS BUT RESTRICTED THE SAME TO THE PEAK CREDIT AS HELD IN C ASE OF JULLY N NAHAR IN ITA NO.829/AHD/2013. THE CIRCULATION OF THE CASH BORROW INGS IN AS MUCH AS THE CASH WAS RECEIVED FROM THE PARTY ON DISCOUNTING THE CHEQUE ISSUED TO HIM AND HE WAS REPAID BY SUCH DISCOUNTING WITH ANOTHER PART Y SHOWS THERE WAS SUBSTANTIAL ROTATION OF MONEY OF WHICH FACT OUGHT T O HAVE BEEN CONSIDERED BY THE LEARNED AO. THE WORKING OF PEAK CREDIT ALONG WI TH THE BANK STATEMENT SHOWING THE PEAK BALANCE OF RS.5,38,084/- AS ON 12. 03.2010 WAS ALSO SUBMITTED BY THE ASSESSEE IN ORDER TO ENABLE THE LE ARNED CIT(A) IN PASSING ORDER BY RESTRICTING THE ADDITION TO THE PEAK BALAN CE. IT APPEARS FROM THE RECORD THAT UPON CONSIDERING T HE SUBMISSIONS MADE BY THE APPELLANT THE LEARNED CIT(A) FINALIZED THE A SSESSMENT ORDER BY RESTRICTING THE ADDITION TO THE PEAK BALANCE WITH T HE FOLLOWING OBSERVATION : ITA NO.454/AHD/2015 ITO VS. MS. NEEPA AMIT DALAL ASST.YEAR 2012-13 - 5 - 3.3 I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE APPELLANT. ON PERUSAL OF BANK ACCOUNT NO. 8704 IN A HMEDABAD MERCANTILE CO-OP, BANK, IT IS EVIDENT THAT THE BANK ACCOUNT HA S BEEN OPENED IN THE JOINT NAME OF THE APPELLANT AND HER FATHER SHRI AMIT S. D ALAL, INTRODUCED BY M/S. ALLOY STEEL ENTERPRISES, PROPRIETARY CONCERN OF SHR I AMIL S DALAL . THE ABOVE ACCOUNT WAS BEING OPERATED BY APPELLANT'S FATHER FO R THE BUSINESS R M/S. ALLOY STEEL ENTERPRISES. THE MODUS OPERANDI WAS THAT POST -DATED CHEQUES OF VARIOUS ACCOUNT HOLDERS INCLUDING APPELLANT WERE GIVEN BY H ER FATHER SHRI AMIT S. DIAL TO ONE SHROFF ;N CASH DISCOUNTING. THE CASH, R ECEIVED FROM SHROFF IN EXCHANGE OF POST-DATED CHEQUE AFTER DEDUCTING INTER EST WERE DEPOSITED IN BANK ACCOUNT OF M/S. ALLOY STEEL ENTERPRISES. FROM THE B ANK BALANCE OF (PROPRIETARY CONCERN OF ALLOY STEEL ENTERPRISES, CH EQUES WERE ISSUED TO PARTIES FOR THE PURPOSE OF RAW-MATERIAL. THESE PURC HASE GOODS WERE SOLD AND APPELLANT RECEIVED CASH WHICH WAS AGAIN DEPOSITED I N THE BANK ACCOUNT OF ALLOY STEEL ENTERPRISES. THE AO HAS TREATED THE TOT AL CASH DEPOSITED IN THE BANK ACCOUNT AS UNEXPLAINED WITHOUT CONSIDERING THE WITHDRAWAL FROM THE BANK ACCOUNT IN THE NAME OF SHROFF. THE ANALYSIS OF BANK ACCOUNT SHOWED THAT THERE IS A ROTATION OF CASH. THEREFORE, THE AO WAS NOT JUSTIFIED TO TREAT THE ENTIRE CASH DEPOSIT AS UNEXPLAINED, WITHOUT CONSIDE RING THE WITHDRAWAL WHICH HAS BEEN AFTER EVERY DEPOSIT OF CASH. CONSIDERING T HE FACTS OF THE CASE, THE FAIR VIEW WOULD BE TO CONSIDER THE PEAK VALUE OF CASH DE POSIT FOR THE PURPOSE OF UNEXPLAINED CASH DEPOSIT. THE PEAK OF BALANCE OF TH E BANK ACCOUNT AS ON 12.3.2010 IS RS.5,38,084/-. IN MY OPINION, THE ADDI TION ON ACCOUNT OF UNEXPLAINED BANK DEPOSIT SHOULD BE RESTRICTED TO RS .5,38,084/-. RELIANCE IS PLACED ON THE DECISION OF JURISDICTIONAL TRIBUNAL I N THE CASE OF JULLY N NAHAR (ITA NO. 829/AHD/2013 DATED 04.10.2013]. WE HAVE CAREFULLY CONSIDERED THE ENTIRE ASPECT OF T HE MATTER. WE FIND THAT THE LEARNED AO WRONGLY PRESUMED THAT THE APPEL LANT WAS THE LEGAL OWNER OF IMPUGNED CASH DEPOSIT WITHOUT ANY COGENT DOCUMEN T. FURTHER THAT, THE STATEMENT OF BANK ACCOUNT DEPICTS SUBSTANTIAL ROTAT ION OF MONEY AS POINTED OUT BY THE APPELLANT BEFORE THE AUTHORITIES BELOW AND O F WHICH FACT THE LEARNED CIT(A) TOOK INTO CONSIDERATION WHILE PASSING ORDERS IMPUGNED BEFORE US. IT IS A FACT THAT THE AO TREATED THE ENTIRE CASH DEPOSITE D IN THE BANK ACCOUNT AS UNEXPLAINED WITHOUT CONSIDERING THE WITHDRAWAL FROM SUCH ACCOUNT IN THE NAME OF SHROFF NEITHER THE ROTATION OF CASH HAS BEE N DISCUSSED AND THEREFORE WE ITA NO.454/AHD/2015 ITO VS. MS. NEEPA AMIT DALAL ASST.YEAR 2012-13 - 6 - FIND NO JUSTIFICATION TO TREAT THE ENTIRE CASH DEPO SIT AS UNEXPLAINED AS MADE BY THE LEARNED AO. CONSIDERING THE ENTIRE ASPECT OF TH E MATTER, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) IN RESTRICTING THE ADDITION TO SUCH PEAK BALANCE OF RS.5,38,084/- AS ON 12.03.2 010 IN THE SAID BANK ACCOUNT SO AS TO WARRANT INTERFERENCE. THE QUESTION IS ACCORDINGLY ANSWERED IN THE AFFIRMATIVE, I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. CONSEQUENTLY, THE APPEAL FAILS AND IS ACCORDINGLY D ISMISSED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 17/05/2019 SD/- SD /- ( PRAMOD KUMAR ) ( M S. MADHUMITA ROY ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 17/05/2019 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-7, AHMEDABAD. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD