Sh. Marghoob Alam, New Delhi V. ITO, New Delhi

ITA 4639/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4084 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 12-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 21-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRUJANI MOHANTY
• Assessee Lawyers: DR RAKESH GUPTA; ASHWANI TANEJA S
• Keywords: Business income; Peak credit; Additional evidence; Corroborative evidences
• Section: 68; 69; 144

Judgement Text

ITA NOS. 2952/DEL/2008 & 4639/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2952/DEL/2008 A.Y. : 2005-06 MARGHOOB ALAM, 1232, GALI NO. 11, GREEN MARKET, BARA TOOTI CHOWK, DELHI 110 006 (PAN/GIR: AEGPA 5747Q) VS. INCOME TAX OFFICER, WARD 39(3), CENTRAL REVENUES BUILDING, NEW DELHI 110 002 I.T.A. NO. 4639/DEL/2010 A.Y. : 2005-06 MARGHOOB ALAM, C/O RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI (PAN/GIR: AEGPA 5747Q) VS. INCOME TAX OFFICER, WARD 39(3), CENTRAL REVENUES BUILDING, NEW DELHI 110 002 (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : DR. RAKESH GUPTA & SH. ASHWANI TANEJA, ADVOCATES REVENUE BY : SMT. SRUJANI MOHANTY, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINS T THE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) PERTA INING TO QUANTUM AND PENALTY APPEALS RESPECTIVELY. ITA NOS. 2952/DEL/2008 & 4639/DEL/2010 2 ITA NO. 2952/DEL/2008 ITA NO. 2952/DEL/2008 ITA NO. 2952/DEL/2008 ITA NO. 2952/DEL/2008 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOM E TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF ` 2855 008/-. 3. IN THIS CASE THE ASSESSEE IS AN INDIVIDUAL AN D ENGAGED IN THE REPAIRING JOB OF UTENSILS AND KITCHENWARE OF OTHER P ARTIES AT HIS SHOP AND EVEN AT THE HOMES OF THE PARTIES. IN THE COURS E OF ASSESSMENT PROCEEDINGS, AN INFORMATION THROUGH AIR, WAS RECEIVE D IN THIS OFFICE IN RESPECT OF THE ASSESSEE, INFORMING THAT THE ASSESSEE HAS DEPOSITED ` 33,13,489/- IN CASH WITH UTI BANK LIMITED. THE NE CESSARY NOTICES WERE ISSUED TO THE ASSESSEE IN THIS REGARD. PROP ER RESPONSE WAS NOT RECEIVED. HENCE, ASSESSMENT WAS FRAMED U/S 144 OF THE IT ACT. ASSESSING OFFICER PROCEEDED TO HOLD THAT THE AMOUN T OF ` 33,55,008/- IN THE BANK ACCOUNT WAS INCOME FROM UNDISCLOSED SOUR CES AND ADDED THE SAME U/S 68 OF THE IT ACT. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD AS UNDER:- I HAVE CONSIDERED FACT OF THE CASE. A PERUSAL OF THE ASSESSING OFFICERS REPORT SHOWS THAT HE HAS NOT CARRIED OUT ANY INQUIRY WITH REFERENCE TO THE EVIDENCES FURNISHED BY THE A PPELLANT IN THE FORM OF RETURN OF THE FIRM M/S ZEROPLUS AND PARTNERSH IP DEED. HENCE, THE SAME ARE ACCEPTED AS CORRECT. SO FAR AS THE COPY OF THE BANK ACCOUNT NO. 12610100067935 MAINTAINED WITH UTI BANK IS CONCERNED, IT IS NOT ADDITIONAL EVIDENCE AS THE SAME ALREADY BEFORE THE ASSESSING OFFICER . THE BASIC CONTENTION OF THE APPELLANT IS THAT THIS ACCOUNT WHERE THE AMOUNT OF ` 33,55,008/- HAS BEEN DEPOSITED DID N OT BELONG TO ITA NOS. 2952/DEL/2008 & 4639/DEL/2010 3 THE APPELLANT BUT TO THE FIRM NAMELY M/S ZEROPLUS IN WHICH THE APPELLANT IS ONE OF THE PARTNERS. THE APPELLANT FU RNISHED COPY OF THE RETURN OF THE FIRM FOR THE ASSESSMENT YEAR 2005- 06 IN SUPPORT OF THIS CLAIM. THE CLAIM THAT THE FIRM HAD BE EN FILING RETURNS REGULARLY IS NOT CORRECT AS THE FIRST RETUR N WAS FILED ONLY FOR ASSESSMENT YEAR 2005-06. IT IS TRUE THAT THE NUMBER OF THIS ACCOUNT IS SPECIFICALLY MENTIONED IN THE RETURN OF THE FIRM. HOWEVER, IT IS ALSO NOTICED THAT THIS RETURN HAS BE EN FILED BELATEDLY, ON 14.7.2006. MOREOVER, WHILE THERE IS A MENTION OF ACCOUNT NO. 7935 IN THIS RETURN, THERE IS NO MENTIO N OF ACCOUNT NO. 9287 WHICH, IN FACT, WAS IN THE FIRMS OWN NAM E. THIS MEANS THAT THE RETURN HAS BEEN FILED ONLY AFTER THE CAS E HAD BEEN PICKED UP FOR SCRUTINY BY THE ASSESSING OFFICER A ND THE NOTICE U/S 143(2) HAD BEEN ISSUED. FILING OF THE RETURN, TH EREFORE, APPEARS TO BE ONLY AN AFTER THOUGHT, A DELIBERATE ATTEMPT TO DEFLECT THE INQUIRY FROM THE APPELLANT TO THE FIR M. IT IS FURTHER NOTED THAT AS POINTED OUT BY THE ASS ESSING OFFICER , THE FIRM HAD AN ACCOUNT NO. 126102000092 87 IN THE SAME BANK. IT IS NOT CLEAR AS TO WHY WHEN THE FIRM H AD ITS OWN BANK ACCOUNT, THE AMOUNT WAS DEPOSITED IN THE APPELL ANTS ACCOUNT IF IT DID NOT PERTAIN TO HIM. A PERUSAL OF THESE BANK ACCOUNTS DOES NOT SHOW ANY INTER-LACING OF TRANSACT IONS BETWEEN THE TWO. BOTH THESE ACCOUNTS, THEREFORE, CLEARL Y APPEAR TO BE STAND ALONE ACCOUNTS. IT IS ALSO SEEN THAT WHILE AC COUNT NO. 9287, WHICH IS IN THE NAME OF THE FIRM IS A CURRENT ACCOUNT, A/C NO7935 WHICH IS IN THE NAME OF THE APPELLANT IS A SAVINGS ACCOUNT. ANOTHER POINT TO BE NOTED IS THAT THERE I S REGULAR CASH DEPOSITS IN THIS ACCOUNT (7935) FROM 15.11.2004 ON WARDS. ITA NOS. 2952/DEL/2008 & 4639/DEL/2010 4 THERE IS NO EXPLANATION AS TO WHY THIS SUDDEN SPATE OF CASH DEPOSITS STARTED ONLY FROM NOVEMBER, 2004. MOREOVER, THE EXPLANATION THAT THESE WERE BUSINESS RECEIPTS OF M/S ZEROPLUS IS NOT BORNE OUT FROM THIS ACCOUNT AS ALL THE DEPOSITS ARE IN ROUND FIGURES SUCH AS ` 25,000/-, ` 17,000/-. ` 40,000/- ETC. NO BOOKS OF ACCOUNT OR OTHER CORROBORATIVE EVIDENCE IN SUPPORT OF THE EXPLANATION HAS BEEN FURNISHED, EITHER AT THE ASSES SMENT OR AT THE APPELLATE STAGE. HENCE, IT IS OBVIOUS THAT TH E APPELLANT HAS NOT BEEN ABLE TO SUBSTANTIATE HIS CLAIM THAT THIS A CCOUNT (NO7935) BELONG TO THE FIRM AND NOT TO HIM. IT IS FURTHER SEEN THAT THERE HAVE BEEN REGULAR DEP OSITS AND WITHDRAWALS FROM THIS ACCOUNT. IN SUCH A SITUATION N ORMALLY THE BENEFIT OF PEAK CREDIT SHOULD BE GIVEN. HOWEVER IN ORDER TO ADJUDICATE THE PLEA CREDIT, THE FACTUAL FOUNDATION H AS TO BE LAID DOWN BY THE APPELLANT. HE HAS TO OWN UP CASH CREDI T ENTRIES IN THE BOOKS OF ACCOUNT AND ONLY THERE AFTER CAN BE THE QUESTION OF PEAK CREDIT BE RAISED (276 ITR 38). IN THIS CASE TH E APPELLANT HAS NOT LED ANY EVIDENCE TO CLAIM THE BENEFIT OF PEAK-CR EDIT. IT HAS NOT BEEN SHOWN THAT IT IS THE SAME MONEY WHICH IS B EING ROTATED THROUGH THIS ACCOUNT. ON THE CONTRARY, WHILE THE C ASH HAS BEEN DEPOSITED IN THE ACCOUNT, THE WITHDRAWALS HAVE BEEN MADE FROM DIFFERENT ATMS. HENCE, IN SUCH A SITUATION, THE BENE FIT OF PEAK CREDIT CANNOT BE GIVEN. IT IS, HOWEVER, NOTICED THAT AN AMOUNT OF ` 5,00,00 0/- HAD BEEN WRONGLY CREDITED ON 15.2.2005 AND THIS MISTAKE WAS R ECTIFIED BY THE BANK BY PASSING A CONTRA-ENTRY. THUS, IT IS CL EAR THAT THE ITA NOS. 2952/DEL/2008 & 4639/DEL/2010 5 ADDITION OF ` 5,00,000/- HAS BEEN MADE WRONGLY AND, THEREFORE, THE SAME IS DELETED. THE REST OF THE ADDITION IS CO NFIRMED. ANOTHER PLEA OF THE APPELLANT IS THAT SINCE THE ADD ITION HAS BEEN MADE ON THE BASIS OF ENTRIES IN THE BANK ACCOUNT, SE CTION 68 CANNOT BE INVOKED. THIS ARGUMENT APPEARS TO BE CORRE CT. SINCE THE ADDITION HAS BEEN MADE ON THE BASIS OF ENTRIES I N THE BANK ACCOUNT THE ADDITION IS CONFIRMED U/S 69 AS UNEXPLA INED INVESTMENT. 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT A SSESSEES PLEA IS THAT ACCOUNT IN THE ASSESSEES NAME HAS BEEN OPENED BY THE FIRM IN WHICH THE ASSESSEE IS A PARTNER. HOWEVER, TO SU PPORT THIS CLAIM, COMPLETE BOOKS OF ACCOUNT AND SUPPORTING EVIDENCE WE RE NOT PRODUCED. IT HAS BEEN CLAIMED THAT SINCE THE AMOUNT WAS LIABLE TO BE WITHDRAWN FROM DIFFERENT ATMS WHICH CANNOT BE DONE T HROUGH THE FIRM, THE ACCOUNT WAS OPEN IN ASSESSEES NAME. LD . COUNSEL OF THE ASSESSEE IN THIS REGARD CLAIMED THAT ALL THE NECE SSARY BOOKS, DOCUMENTS ARE NOW AVAILABLE WHICH CAN BE PRODUCED BE FORE THE AUTHORITIES BELOW. LD. COUNSEL OF THE ASSESSEE FURTHER CLAIMED THAT THE NOTICES IN THIS CASE HAS BEEN RECEIVED ONLY AFT ER THE FIRM HAS FILED RETURN OF INCOME. HE CLAIMED THAT LD. COMMISSIONER O F INCOME TAX (APPEALS) HAS WRONGLY INFERRED THAT FIRMS RETURN WA S FILED BELATEDLY, ONLY AFTER THE CASE WAS PICKED FOR SCRUTINY. WE AL SO NOTE THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS OBSERVED TH AT ASSESSING OFFICER HAS NOT CARRIED OUT ANY ENQUIRY WITH REFER ENCE TO THE EVIDENCES FURNISHED BY THE ASSESSEE. IN THESE CIRCUMSTANCES, WE FIND THAT THE ITA NOS. 2952/DEL/2008 & 4639/DEL/2010 6 INTEREST OF JUSTICE WILL BE SERVED, IF THE ENTIRE IS SUE IS REMITTED TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE SA ME AFRESH. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE O PPORTUNITY OF BEING HEARD. ITA NO. 4639/DEL/2010 ITA NO. 4639/DEL/2010 ITA NO. 4639/DEL/2010 ITA NO. 4639/DEL/2010 7. THIS APPEAL IS DIRECTED AGAINST THE LEVY OF PENA LTY U/S 271(1)(C) ON THE ADDITION SUSTAINED IN ITA NO. 2952 ABOVE. WE FIND THAT WE HAVE ALREADY REMITTED THE MAIN APPEAL TO THE FILE OF THE ASSESSING OFFICER. HENCE, THIS APPEAL AGAINST THE PENALTY ALSO STANDS REMITTED TO THE FILES OF THE ASSESSING OFFICER. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE STAND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12/5/2011, UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 12/5/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES