Shri Rajesh Gupta, Indore V. The Income Tax Officer 2(3), Indore

ITA 462/IND/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 47906 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 09-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: S S DESHPANDE
• Keywords: Peak credit
• Section: 143(3); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI R.C. SHARMA , AM ITA NO. 462/IND/2010 A.Y. 2007-08 RAJESH GUPTA INDORE PAN AEAPG 3711N :: APPELLANT VS INCOME TAX OFFICER WARD 2(3) INDORE :: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI ARUN DEWAN DATE OF HEARING 2 9 .05.2012 DATE OF PRONOUNCEMENT 04 . 0 6 .2012 O R D E R PER R.C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DATED 6.5.2010 FOR THE ASSESSMENT YEAR 20 07- 2 08 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT WHEREIN FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE :- (I) THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIONS OF RS.14,97,500/- ON ACCOUNT OF DEPOSITS IN THE BANK. (II) IT WAS PROVED BEFORE THE LD. A.O. AND THE LD. CIT(A) THAT THE PEAK CREDITS IN THE BANK MAY BE TAXED SINCE THE WITHDRAWALS MADE BY THE ASSESSEE WERE AVAILABLE WITH HIM FOR FURTHER DEPOSITS. THE LD. CIT HAS SUSTAINED THE ADDITION WITHOUT GIVING ANY COGENT REASONS AND AS SUCH THE ORDER OF THE LD. CIT(A) IS BAD IN LAW. (III) THE ADDITIONS MADE OF RS.14,97,500/- MAY PLEASE BE DELETED OR IN THE ALTERNATIVE BE RESTRICTED TO A REASONABLE FIGURE. 3 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS INV OLVED IN TRADING OF ELECTRONICS GOODS. DURING THE ASSESS MENT PROCEEDINGS IT WAS ALSO NOTICED THAT THE ASSESSEE H AS A BANK ACCOUNT WITH STANDARD CHARTERED BANK WHICH IS NOT SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS AND THE ASSESSEE DID NOT SUBMIT ANY DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS PER AIR INFORMATION, THE ASSESSEE DEPOSITED CASH OF RS. 14,97,500/- AT VARIOUS TIMES. VIDE NOTE SHEET DATED 02.12.2009 THE ASSESSEE WAS SPECIFICALLY ASKED BY T HE ASSESSING OFFICER TO EXPLAIN AS TO WHY THIS ACCOUNT WAS NOT SHOWN BY HIM IN THE BOOKS OF ACCOUNTS. HE WAS` FURTHER ASKED TO SUBMIT THE SOURCES OF CASH DEPOSIT OF RS. 14,97,500/- ALONG WITH DOCUMENTARY PROOF AND HI S CASE WAS FIXED FOR HEARING ON 09.12.2009. FROM THE COPY 4 OF BANK ACCOUNT OF ASSESSEE WITH STANDARD CHARTERED BANK, IT WAS FOUND BY THE ASSESSING OFFICER THAT CA SH PEAK WAS TO THE TUNE OF RS. 1,50,000/- WHICH WAS DEPOSITED BY HIM ON 7 OCT., 2006. THE ASSESSING OFF ICER OBSERVED THAT SINCE THE ASSESSEE FAILED TO EXPLAIN SOURCE OF ALL THE DEPOSITS AND OTHER BUSINESS ACTIVITIES. HENCE, ONLY CASH PEAK CANNOT BE ADDED BACK IN THIS CASE AS THE ASSESSEE FAILED TO EXPLAIN NATURE AND SOURCE CASH DEPOSIT. THE ASSESSING OFFICER, THEREFORE, INFERRED THAT THE ASSESSEE HAS NO PROOF AS TO THE SOURCE OF DEPOS IT OF CASH AND HE, THEREFORE, HELD THAT THE SAID MONEY WA S DEPOSITED BY THE ASSESSEE OUT OF HIS UNDISCLOSED IN COME AND ACCORDINGLY THE ASSESSING OFFICER ADDED RS. 14,97,500/- TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT. AGAINST THIS ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 5 3. BY THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES, GONE THROUGH THE MATERIAL AVAILABLE ON REC ORD AND FIND THAT THE ADDITION HAS BEEN MADE IN RESPECT OF CASH DEPOSITED BY THE ASSESSEE ON VARIOUS DATES IN HIS BANK ACCOUNT WITH STANDARD CHARTERED BANK. AS THIS BANK ACCOUNT WAS NOT SHOWN BY THE ASSESSEE IN ITS REGULAR BOOKS OF ACCOUNTS, THE ASSESSING OFFICER AD DED ALL THE CASH DEPOSITED IN THE BANK ACCOUNT EVEN THO UGH HE HAS OBSERVED THAT THERE WAS A PEAK CASH OF RS. 1,50,000/-. WE HAVE GONE THROUGH THE BANK STATEMEN T AND FIND THAT THE ASSESSEE WAS DEPOSITING AND WITHDRAWING CASH IN THIS ACCOUNT AND THERE WAS A PE AK CASH OF RS. 1,50,00/- WHICH REMAINED CREDITED ON 7 TH 6 OCTOBER, 2006. SINCE THE CASH DEPOSITED IN THE BAN K ACCOUNT ON VARIOUS DATES WAS AVAILABLE TO THE ASSES SEE OUT OF THE CASH WITHDRAWAL FROM THE VERY SAME BANK ACCOUNT, WE DO NOT FIND ANY JUSTIFICATION FOR HOLDI NG THAT THE ASSESSEE HAS NOT EXPLAINED ALL THE DEPOSITS OF CASH IN THE BANK ACCOUNT. WHEN CASH IS DEPOSITED OUT OF CA SH WITHDRAWN FROM THE VERY SAME BANK ACCOUNT, THE MAXIMUM BALANCE IN THE BANK ACCOUNT CAN BE TREATED AS UNEXPLAINED AND ACCORDINGLY WE CONFIRM THE ADDITION OF RS. 1,50,000/-. IT IS ALSO PERTINENT TO NOTE THAT THE ENTIRE ACTIVITY OF DEPOSIT AND WITHDRAWAL OF CASH OF RS. 14,97,500/- ON VARIOUS DATES WAS PERTAINING TO THE BUSINESS TRANSACTIONS OF THE ASSESSEE WHICH DID NOT FIND PLACE IN ITS REGULAR BOOKS OF ACCOUNTS, THEREFORE, IT IS REASONABLE TO ESTIMATE THE PROFIT AT 5% ON THE DEPO SITS OF RS. 14,97,500/- WHICH WORKS OUT TO RS. 74,875/-. 7 5. IN VIEW OF THE ABOVE DISCUSSION, WE CONFIRM THE ADDITION OF RS. 2,24,875/-(RS. 1,50,000/-+ RS. 74,8 75/-). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 4 TH JUNE, 2012 SD SD (JOGINDER SINGH) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED - 4 TH JUNE, 2012 DN/- 44