DCIT, Chandigarh V. Sh. Anoop Garg, Panchkula

ITA 482/CHANDI/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95549 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHIR SEHGAL
• Assessee Lawyers: S K MITTAL
• Keywords: Unexplained cash credit; Peak credit; Corroborative evidences
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NOS.447 TO 453/CHD/2013 (ASSESSMENT YEARS : 2003-04 TO 2009-10) ANOOP GARG, VS. THE A.C.I.T., H.NO.260, SECTOR 2, CENTRAL CIRCLE II, PANCHKULA. CHANDIGARH. PAN: AENPG9763R AND ITA NO.482/CHD/2013 (ASSESSMENT YEARS : 2009-10) THE D.C.I.T., VS. ANOOP GARG,H.NO.260, SECTOR 2, CENTRAL CIRCLE II, H.NO.260, SECTOR 2, CHANDIGARH. PANCHKULA. PAN: AENPG9763R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 15.09.2015 DATE OF PRONOUNCEMENT : 16.09.2015 O R D E R PER BENCH : THESE SEVEN APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF LEARNED 2 COMMISSIONER OF INCOME TAX(CENTRAL), GURGAON DATED 22.2.2013 FOR ASSESSMENT YEARS 2003-04 TO 2009-10. 2. THE COMMON ISSUE INVOLVED IN ALL THE CASES IS REGARDING THE AMOUNT ON ACCOUNT OF PEAK OF IMPREST ACCOUNT ADDED BY THE ASSESSING OFFICER AND THE PRAYER TO GI VE THE BENEFIT OF SURRENDERED AMOUNT BY THE ASSESSEE IN VA RIOUS YEARS DURING THE COURSE OF SEARCH. 3 THE CASES OF M/S INDO SOVIET FRIENDSHIP COLLEGE OF PHARMACY MANAGING COMMITTEE WERE ALSO HEARD TOGETHE R WITH THE APPEAL OF THE ASSESSEE AND CONSIDERING THE FACT THAT THE BENEFIT OF SURRENDER MADE BY THE ASSESSEE HAS BEEN CLAIMED AGAINST THE ADDITIONS MADE IN THE CASE OF M/S INDO SOVIET FRIENDSHIP COLLEGE OF PHARMACY MANAGING COMMITTEE,T HE LEARNED COUNSEL FOR THE ASSESSEE PREFERRED TO WITHD RAW THESE SEVEN APPEALS. THE APPEALS OF THE ASSESSEE ARE DI SMISSED AS WITHDRAWN. 4. FOR ASSESSMENT YEAR 2009-10 IN ITA NO.482/CHD/2013, THE DEPARTMENT HAS COME UP IN APPE AL RAISING THE FOLLOWING GROUNDS OF APPEAL : (I) ' THE LD. CIT(A) HAS ERRED BOTH IN LAW AS WELL AS FA CT BY DELETING THE ADDITION OF RS. 24,21,242/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE LT ACT, 1961 WH EN THE ASSESSEE HAS FAILED TO FURNISH ANY DOCUMENTARY EVID ENCE TO EXPLAIN THE SOURCE OF CASH FOUND AT THE TIME OF SEARC H. (II) 'THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS BY HOLDING THE CASH OF RS. 24,21,242/- WAS PART OF THE INCOME SURRENDERED BY THE ASSESSEE U/S 132(4) OF THE I. T A CT, 1961.' 3 (III) 'THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FAC T THAT CASH OF RS. 24,21,242/-WAS NOT PART OF THE INCOME SURRENDERED BY THE ASSESSEE U/S 132(4).' (IV) 'THAT THE APPELLANT CRAVES TO ADD, DELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING.' 5. THE FACTS OF THE CASE ARE THAT AN AMOUNT OF RS.24,21,200/- IN CASH WAS FOUND AT THE RESIDENCE O F THE ASSESSEE DURING THE COURSE OF SEARCH. IN THE STAT EMENT RECORDED UNDER SECTION 132(4) OF THE ACT, THE ASSES SEE WAS UNABLE TO EXPLAIN THE SOURCE OF CASH FOUND. HOWEVE R, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS CONTEN DED ON BEHALF OF THE ASSESSEE THAT THE CASH RECOVERED WERE FROM HIS SALARY/SAVINGS/OTHER INCOME OF HIMSELF AND FAMILY M EMBERS. HOWEVER, NO SUPPORTING EVIDENCE FOR THE SAME WAS FU RNISHED. IN VIEW OF THESE, THE ASSESSING OFFICER MADE AN ADD ITION OF RS.24,21,200/-. 6. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE CONTENDED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX THAT HE HAS SURRENDERED AN AMOUNT OF RS.1,30,80,026 /-, WHICH WOULD COVER THIS CASH RECOVERED FROM THE RESI DENCE. THE PRAYER OF THE ASSESSEE WAS THAT THE ASSESSING O FFICER HAS NOT ALLOWED THE SET OFF AS THE ADDITIONAL INCOME SU RRENDERED BY HIM HAS BEEN ADJUSTED AGAINST THE PEAK CREDIT IN THE IMPREST ACCOUNT IN ASSESSMENT YEARS 2003-04, 2004-0 5 AND 2008-09. HOWEVER, IT WAS SUBMITTED THAT ADDITION M ADE ON ACCOUNT OF PEAK CREDIT IN THE IMPREST ACCOUNT CAN A LSO COVER THE UNDISCLOSED CASH SO RECOVERED FROM THE RESIDENC E OF THE ASSESSEE. 4 7. THE LEARNED D.R. RELIED UPON THE ORDER OF THE ASSESSING OFFICER WHILE THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE LEARNED COMMISSIONER O F INCOME TAX AND SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TAX HAS GIVEN A VERY CLEAR FINDING THAT THE CASH S O RECOVERED CAN BE SET OFF FROM THE ADDITION MADE ON ACCOUNT OF PEAK CREDIT IN VARIOUS YEARS. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WITH REGARD TO THE CASH FOUND DURING THE COURSE OF SEARCH, THE LEARNED COMMISSION ER OF INCOME TAX HAS GIVEN HER FINDING AT PAGE 14, PARA 11.4 OF HIS ORDER, WHICH READS AS UNDER : 11.4. 1 HAVE CONSIDERED THE SUBMISSIONS OF THE ASSE SSEE, THE REMAND REPORT AND THE REJOINDER. CASH OF RS.24,2 1,200/- WAS FOUND IN THE RESIDENCE IN THE COURSE OF SEARCH WHIC H WAS ADDED BY THE AO AS UNDISCLOSED. AT PARA 6.2 OF THE IMPUGNED ORDE R, 1 FIND THAT RELIANCE HAS BEEN DRAWN TO THE STATEMENT RECOR DED U/S 132(4) WHEREIN THE ASSESSEE STATED THAT HE WAS UNAB LE TO EXPLAIN THE SOURCE OF THE CASH FOUND. DURING THE COURSE OF ASSESSMENT, THOUGH IT WAS CONTENDED THAT THE CASH RECOVERED WERE FROM HIS SALARY/SAVINGS/ OTHER INCOME OF HIMSELF AND FAMILY M EMBERS, NO SUPPORTING EVIDENCE WAS FURNISHED. DURING APPEAL PROC EEDINGS, THE CONTENTION OF THE ASSESSEE WAS THAT HE HAD SURRENDE RED AN AMOUNT OF RS.1,30,80,026/- WHICH WOULD COVER THIS CASH REC OVERED FROM THE, RESIDENCE. THE AO DID NOT ALLOW THE SET-OFF A S THE ADDITIONAL INCOME SURRENDERED BY THE ASSESSEE HAD B EEN ADJUSTED AGAINST THE PEAK CREDIT IN THE IMPREST ACCOU NT(S) IN AY 2003-04, AY 2004-05 AND AY 2008-09, HENCE NO BALANCE AMOUNT WAS AVAILABLE FOR FURTHER ADJUSTMENT. HOWEVER, AS AD DITION OF THE PEAK IN THE IMPREST ACCOUNT HAVE BEEN MADE OF THE U NEXPLAINED RECEIPTS IN ALL THE 07 ASSESSMENT YEARS, I THINK IT W ILL ONLY BE FAIR IF 5 THIS CASH FOUND IS CONSIDERED AS COVERED BY SUCH SU MS. THE IMPREST ACCOUNT INVOLVED HUGE TRANSACTIONS IN CASH IS NOT IN DISPUTE. ACCORDINGLY THE AO IS DIRECTED TO DELETE TH IS ADDITION. ASSESSEE SUCCEEDS IN THIS GROUND OF APPEAL. 9. IT IS NOT IN DISPUTE THAT THE CASH AMOUNTING TO RS.24,21,200/- WAS RECOVERED DURING THE COURSE OF S EARCH FROM THE RESIDENCE OF THE ASSESSEE. IT IS ALSO A MATTER ON RECORD THAT VARIOUS ADDITIONS ON ACCOUNT OF PEAK CR EDIT OF IMPREST ACCOUNT MAINTAINED BY THE ASSESSEE HAD BEEN MADE IN DIFFERENT ASSESSMENT YEARS IN THE HANDS OF THE ASSE SSEE. THE DETAILS OF THESE ADDITIONS ARE APPEARING AT PAGES 1 0 AND 11 OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX , WHICH IS AS UNDER : ASSESSMENT PEAK CREDIT (RS.) ADDITION AS UNEXPLAIN ED YEAR CASH CREDIT (RS. ) 2003-04 17,13,000/- 14,90,358/- (WHICH SURRENDERED ) IS LESS RS. 2,22,642/- 2004-05 63,89,896/- 11,03,246/- (WHICH SURRENDERED ) IS LESS RS. 52,86,650/- 2005 - 06 15,43,9 17/ - 15,43,917/ - 2006 - 07 1,38,783/ - 1,38,783/ - 2007 - 08 9,00,008/ - 9,00,008/ - 2008-09 81,88,472/- 6,17,788/- (WHICH IS LESS RS. 75,70,684/- SURRENDERED ) 2009-10 8,74,136/- 8,74,136/- 10. FROM THE ABOVE TABLE, IT IS QUITE CLEAR THAT T HOUGH THE SURRENDERED INCOME HAS BEEN ADJUSTED AGAINST TH E PEAK CREDIT CALCULATED IN ASSESSMENT YEARS 2203-04, 2004 -05 AND 2008-09, HOWEVER, IT IS ALSO NOT IN DISPUTE THAT VA RIOUS ADDITIONS ON ACCOUNT OF PEAK CREDIT STILL HAD BEEN SUSTAINED IN THE HANDS OF THE ASSESSEE. IF THE CASH IS FOUN D DURING THE COURSE OF SEARCH AND THE ADDITIONS SUSTAINED ARE ON ACCOUNT 6 OF IMPREST ACCOUNT INVOLVING THE CASH TRANSACTION, IT CAN VERY CLEARLY BE INFERRED THAT THIS CASH IS OUT OF THE SA ME IMPREST ACCOUNT. THE ADDITIONS ON ACCOUNT OF PEAK CREDIT I N IMPREST ACCOUNT WERE ADMITTED BY THE ASSESSEE HIMSELF DURIN G THE ASSESSMENT PROCEEDINGS AND THE APPEALS FILED AGAINS T THOSE CASES, HAVE ALREADY BEEN WITHDRAWN BY THE ASSESSEE, WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED COMMISSION ER OF INCOME TAX THAT THE CASH SO RECOVERED MAY BE PRESU MED TO BE OUT OF ADDITIONS MADE ON ACCOUNT OF IMPREST ACCOUNT . THEREFORE, WE UPHOLD THE FINDINGS OF THE LEARNED COMMISSIONER OF INCOME TAX. 11. THE APPEAL OF THE REVENUE IS DISMISSED. 12. IN THE RESULT, THE APPEALS OF THE ASSESSEE IN ITA NOS.447 TO 453/CHD/2013 ARE DISMISSED AS WITHDRAWN AND THE APPEAL OF THE REVENUE IN ITA NO.482/CHD/2013 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF SEPTEMBER, 2015. SD/- SD/- (BHAVNESH SAINI) (RANO JAIN) JUDICIAL MEMBER ACOUNTANT MEMBER DATED : 16 TH SEPTEMBER, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 7