Sh. Neeraj Sharma, New Delhi V. ITO, New Delhi

ITA 4867/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5144 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 05-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 12-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Peak credit; Additional evidence; Corroborative evidences
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 4867/DEL/2016 ASSESSMENT YEAR: 2010-11 SH. NEERAJ SHARMA, VS. ITO, WARD-69(5), 344, MASJID MOTH, CIVIC CENTRE, SOUTH EXTENSION PART-II, NEW DELHI NEW DELHI 110 049 (PAN: ALSPS7346C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJIV SAXENA, ADV. REVENUE BY : SH. T. VASANTHAN, SR. DR. ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 29.7.2016 OF THE LD. CIT(A)-28, NEW DELHI PERTAININ G TO ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A)-XXVIII HAS ERRED IN PARTLY CONFIRMING TH E ADDITION TO THE TUNE OF RS.19,50,000/- BASED ON THE PEAK CREDIT, THAT IS IN CONTRADICTION BECAUSE OF THE FOL LOWING: A. THE LD. CIT(A) HAS HIMSELF UPHELD 'THAT IT WILL NOT BE CORRECT TO TREAT THE TOTAL DEPOSITS AS THE INCOME O F THE ASSESSEE WITHOUT GIVING DUE CONSIDERATION TO THE WITHDRAWALS AND EXPENDITURES.' WHEREAS DURING THE COURSE OF HEARING BEFORE THE LD. CIT(A) THE SUBMISS ION 2 WERE MADE FOR THE SOURCE OF THE DEPOSITS AND THE NA TURE OF EXPENDITURES INCURRED ON BEHALF OF THE EMPLOYER. THEREFORE, THE PEAK SO TAKEN BY THE LD. CIT(A) IS N OT BASED ON THE FACTS OF THE CASE SO IT IS ALSO LIABLE TO BE DELETED. B. THAT THE LD. CIT(A) HAS FURTHER UPHELD THAT 'MOREOVER IF ONE TAKES DEPOSITS WITHOUT GIVING SETO FF TO WITHDRAWAL THEN IT WILL RESULT DOUBLE ADDITION. LIK EWISE IF RECEIPTS ARE TAKEN AS INCOME THEN WITHDRAWAL AND PAYMENTS HAS ALSO TO BE TREATED AS AN EXPENDITURE.' WHEREAS THE LD. CIT(A) AFTER EXAMINING THE DETAILS SUBMITTED BY THE ASSESSEE AND WORKING OUT THE PEAK OF THE ACCOUNTS IS NOT JUSTIFIED. C. THAT DURING THE COURSE OF HEARING IT WAS SUBMITT ED BEFORE THE LD. CIT(A) THAT THE ASSESSEE HAS BEEN FR OM A VERY POOR FAMILY BACKGROUND AND HIS FATHER WAS A TA XI DRIVER AND HE WAS MERELY AN EMPLOYEE OF THE COLLEGE AND THE SOURCE OF THE DEPOSITS IN HIS ACCOUNTS HAS BEEN THE MONEY GIVEN BY HIS EMPLOYER AND DEPOSITED IN HIS ACCOUNT VIS-A-VIS THE EXPENDITURES WERE ALSO INCURR ED BY THE ASSESSEE ON THE INSTRUCTIONS OF HIS EMPLOYER AN D HE WAS ONLY LEFT WITH A BEGGARLY AMOUNT IN HIS ACCOUNT THEREFORE, THE ASSESSEE IS NOT IN A POSITION TO EXP LAIN THE SOURCE OF EVERY WITHDRAWALS MADE BY HIM ON BEHALF O F HIS 3 EMPLOYER WITH SUPPORTING EVIDENCES AND SUBSTANTIVE DOCUMENTS, THEREFORE, NOT RELYING FULLY ON THE SUBMISSIONS OF THE ASSESSEE IS ALSO NOT CORRECT ON THE PART OF THE CIT(A), THEREFORE, THE ADDITIONS SO CON FIRMED IS LIABLE TO BE DELETED. D. WITHOUT PREJUDICE TO THE GROUND OF APPEAL IN A., B. AND C. ABOVE, THE PEAK OF THE DAY WORKED OUT BY THE LD. CIT(A) THAT HAS BEEN TAKEN AS RS.18,50,000/- (A/C N O. 398502010090651) + RS.1,OO,000/- (A/C NO. 398502010092638)= RS.19,50,000/- WHEREAS, THE BALANCE OF THE DAY IN AC. NO. 398502010090651 IS RS.5,17,557.77 AND NOT RS.18,50,OOOI- AND THE BALAN CE OF THE DAY IN AC. NO. 398502010092638 IS RS.8,387.9 4 AND NOT RS.1,OO,000/- AS HAS BEEN WORKED OUT BY THE LD. CIT(A). THE LD. CIT(A) HAS ERRED IN IGNORING TH E WITHDRAWALS MADE ON THE SAME DAY IN WORKING OUT THE PEAK THEREFORE, THE PEAK WORKED OUT IS INCORRECT. 2. THE APPELLANT CRAVES LEAVE FOR ADDITION, MODIFICATION, ALTERATION, AMENDMENT OF ANY OF THE GROUNDS OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME DECLARING INCOME OF RS.2,60,354/ ON 26.06.20 10. IN THIS CASE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 (HEREINAFTER REFERRED AS THE ACT) WAS PASSED ON 18. 03.2013 AT TOTAL 4 INCOME OF RS. 46,20,490/ AFTER MAKING ADDITION OF R S.43,59,900/ ON ACCOUNT OF UNDISCLOSED CASH AND CHEQUES DEPOSIT IN THE BANK ACCOUNT. DURING THE YEAR UNDER CONSIDERATION THE AS SESSEE WAS EMPLOYED WITH SATYA COLLEGE OF ENGINEERING AND TECH NOLOGY AS MANGER ADMINISTRATION. AO NOTED THAT IN HIS BANK AC COUNTS THERE IS A CASH DEPOTS OF RS.23,59,900/- AND CHEQUE DEPOSITS OF RS. 20,00,000/-. DURING THE COURSE OF THE ASSESSMEN T PROCEEDING IT WAS SUBMITTED BY THE ASSESSEE THAT HIS PERSONAL BAN K ACCOUNT WAS USED BY HIS EMPLOYER FOR MAKING CERTAIN PAYMENTS AN D OFFICIAL AND OTHER EXPENDITURES AND FOR THAT PURPOSE THE CASH WA S DEPOSITED AND CHEQUE IN QUESTION ALSO PERTAINS TO HIM AND AFTER DEPOSITING THE SAME HE HAD WITHDRAWN THE WHOLE AMOUNT IN CASH. HO WEVER THE ASSESSEE FAILED TO FURNISH THE CONFIRMATION FROM TH E EMPLOYER IN SUPPORT OF THE ABOVE CLAIM. SUBSEQUENTLY NOTICE UND ER SECTION 133(6) OF THE ACT WAS ISSUED BY THE A.O TO THE ASS ESSEE'S EMPLOYER VIDE LETTER DATED 17.01.2012. IN RESPONSE VIDE LETT ER DATED 14.2,.2012 THE SATYA COLLEGE OF ENGINEERING AND TEC HNOLOGY COMPLETELY DENIED HAVING ANY CONNECTIONS WITH THE T RANSACTIONS IN QUESTION CARRIED OUT FROM THE BANK ACCOUNT OF THE A SSESSEE. KEEPING IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE ABOVE DEPOSITS WERE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE AND ACCORDINGLY ADDITION OF RS. 43,59,000/- WAS MADE AN D ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE INCOME TAX ACT, 19 61 VIDE ORDER DATED 18.3.2013 AND INCOME WAS ASSESSED AT RS. 46,2 0,490/-. 5 AGAINST THE ASSESSMENT ORDER, ASSESEE APPEALED BEFO RE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 29.7.2016 HAS PARTLY ALLOWED THE APPEAL BY RESTRICTED THE ADDITION TO RS . 19,50,000/-, AS A RESULT THE ASSESSEE GETS RELIEF OF RS. 24,09,900/-. 3. AGGRIEVED WITH IMPUGNED ORDER DATED 29.7.2016, A SSESSEE FILED THE APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS STATED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN PARTLY CONFIRMING THE ADDITION TO THE TUNE OF RS. 1 9,50,000/- BASED ON THE PEAK CREDIT, WHICH IS ARBITRARY, BECAUSE LD. CIT(A) HAS HIMSELF UPHELD THAT IT WILL NOT BE CORRECT TO TREAT THE TOT AL DEPOSITS AS THE INCOME OF THE ASSESSEE WITHOUT GIVING DUE CONSIDERA TION TO THE WITHDRAWALS AND EXPENDITURES. WHEREAS DURING THE CO URSE OF HEARING BEFORE THE LD. CIT(A) THE SUBMISSION WERE MADE FOR THE SOURCE OF THE DEPOSITS AND THE NATURE OF EXPENDITURES INCURRE D ON BEHALF OF THE EMPLOYER. THEREFORE, HE STATED THAT THE PEAK SO TAK EN BY THE LD. CIT(A) IS NOT BASED ON THE FACTS OF THE CASE SO IT IS ALSO LIABLE TO BE DELETED. HE FURTHER STATED THAT LD. CIT(A) HAS FUR THER UPHELD THAT MOREOVER IF ONE TAKES DEPOSITS WITHOUT GIVING SETOF F TO WITHDRAWAL THEN IT WILL RESULT DOUBLE ADDITION. LIKEWISE IF RE CEIPTS ARE TAKEN AS INCOME THEN WITHDRAWAL AND PAYMENTS HAS ALSO TO BE TREATED AS AN EXPENDITURE. WHEREAS THE LD. CIT(A) AFTER EXAMINING THE DETAILS SUBMITTED BY THE ASSESSEE AND WORKING OUT THE PEAK OF THE ACCOUNTS IS NOT JUSTIFIED. IT WAS THE FURTHER CONTENTION OF THE LD. COUNSEL OF 6 THE ASSESSEE THAT DURING THE COURSE OF HEARING IT W AS SUBMITTED BEFORE THE LD. CIT(A) THAT THE ASSESSEE HAS BEEN FR OM A VERY POOR FAMILY BACKGROUND AND HIS FATHER WAS A TAXI DRIVER AND HE WAS MERELY AN EMPLOYEE OF THE COLLEGE AND THE SOURCE OF THE DEPOSITS IN HIS ACCOUNTS HAS BEEN THE MONEY GIVEN BY HIS EMPLOY ER AND DEPOSITED IN HIS ACCOUNT VIS-A-VIS THE EXPENDITURES WERE ALSO INCURRED BY THE ASSESSEE ON THE INSTRUCTIONS OF HIS EMPLOYER AND HE WAS ONLY LEFT WITH A BEGGARLY AMOUNT IN HIS ACCOUNT THEREFORE, THE ASSESSEE IS NOT IN A POSITION TO EXPLAIN THE SOURCE OF EVERY WITHDRAWALS MADE BY HIM ON BEHALF OF HIS EMPLOYER W ITH SUPPORTING EVIDENCES AND SUBSTANTIVE DOCUMENTS, THEREFORE, NOT RELYING FULLY ON THE SUBMISSIONS OF THE ASSESSEE IS ALSO NOT CORRECT ON THE PART OF THE CIT(A), THEREFORE, THE ADDITIONS SO CONFIRMED IS LI ABLE TO BE DELETED. HE FURTHER STATED THAT THE PEAK OF THE DAY WORKED OUT BY THE LD. CIT(A) THAT HAS BEEN TAKEN AS RS.18,50,000/- (A/C N O. 398502010090651) + RS.1,00,000/- (A/C NO. 398502010 092638)= RS.19,50,000/- WHEREAS, THE BALANCE OF THE DAY IN A /C. NO. 398502010090651 WAS RS.5,17,557.77 AND NOT RS.18,50 ,OOO/- AND THE BALANCE OF THE DAY IN AC. NO. 398502010092638 W AS RS.8,387.94 AND NOT RS.1,OO,000/- AS HAS BEEN WORKED OUT BY THE LD. CIT(A). HE FURTHER STATED THAT LD. CIT(A) HAS ERRED IN IGNORIN G THE WITHDRAWALS MADE ON THE SAME DAY IN WORKING OUT THE PEAK THEREF ORE, THE PEAK WORKED OUT IS INCORRECT AND ADDITION IN DISPUTE MAY BE DELETED BY ALLOWING THE APPEAL OF THE ASSESSEE. IN SUPPORT OF HIS CONTENTION, 7 HE FILED A PAPER BOOK CONTAINING PAGES 1-114 IN WHI CH HE HAS ATTACHED THE COPY OF FORM 16 SHOWING EMPLOYMENT WIT H SATYA COLLEGE OF ENGINEERING & TECHNOLOGIES PALWAL HARYAN A SALARY ASSESSMENT YEAR 2010-11; STATEMENT GIVEN TO AO DURI NG ASSESSMENT PROCEEDINGS APPLYING VERSION FACTS; DATE WISE SUMMA RY OF BANK A/C WITH UBI WITH WITHDRAWAL, OPENING AND CLOSING BALAN CE; COPY OF LETTER TO AO SUBMITTING FAMILY STATUS AND CASH FLOW STATEM ENTS; BRIEF CHART GIVING DESCRIPTION OF CREDIT CARD PAYMENTS ALONGWIT H BANK STATEMENT ETC; COPY OF REQUISITION OF INFORMATION U/S. 133(6) FILED BY THE ASSESSEE BEFORE AO; COPY OF INFORMATION PERTAINING TO THE RELATIONSHIP OF THE MENTIONED CREDIT CARD ACCOUNT I SSUED BY CITI BANK; COPY OF INFORMATION CALLED FOR U/S. 133(6) OF THE I.T. ACT, 1961 ISSUED BY AXIS BANK; COPY OF LETTER ISSUED BY UNIO N BANK OF INDIA IN RESPECT OF LETTER NO. 37 DATED 24.9.2014; COPY OF S UBMISSION FILED BY ASSESSEE BEFORE COMMISSIONER OF INCOME TAX APPEALS -XXX; COPY OF REMAND REPORT ISSUED BY AO; COPY OF REJOINDER SUBMI SSION FILED BY ASSESSEE BEFORE CIT(A)-XXI; COPY OF FURTHER SUBMISS ION FILED BY ASSESSEE BEFORE CIT(A)-XVIII ALONGWITH ENCLOSURES: (I) COPY OF LETTER OF APPROVAL ISSUED BY ALL INDIA COUNCIL FOR TECHNIC AL EDUCATION, (II) COPY OF COMPANY / LLP MASTER DATA, (III) COPY OF AF FIDAVIT OF APPELLANT, (IV) COPY OF BANK STATEMENT OF UNION BAN K OF INDIA OF SH. ASHRAF ALI A/C 398502010092611, (V) COPY OF BANK ST ATEMENT OF UNION BANK OF INDIA OF SH. SANTOSH SHARMA A/C NO. 398502010094143; COPY OF FURTHER REMAND REPORT ISSU ED BY AO; 8 COPY OF REPORT FOR FILING YOUR REJOINDER ISSUED BY CIT; COPY OF FURTHER REJOINDER SUBMISSION FILED BY ASSESSEE BEFORE CIT(A )-XXVIII; COPY OF FURTHER SUBMISSION FILED BY ASSESSEE BEFORE CIT(A)- XXVIII. 5. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, E SPECIALLY THE CONTENTION RAISED IN THE GROUNDS OF APPEAL AND THE PAPER BOOK FILED BY THE LD. COUNSEL OF THE ASSESSEE. I FIND THAT LD. CIT(A) HAS ELABORATELY DISCUSSED AND ADJUDICATED THE ISSUES I N DISPUTE VIDE PARA NO. 2.3 TO 2.4 OF HIS IMPUGNED ORDER. FOR THE SAKE OF CONVENIENCE, I AM REPRODUCING THE SAID RELEVANT FI NDING AS UNDER:- 2.3 DURING THE COURSE OF APPELLATE PROCEEDING THE SUBMISSION MADE BEFORE THE AO WAS REPEATED AND BY THE HELP OF THE NATURE OF VARIOUS TRANSACTIONS THE APPELLANT TRIED TO DEMONSTRATE THAT THERE TRANSACTIONS WERE CARRIED OUT BY THE INSTRUCTION OF THE EMPLOYER. HOWEVER, NO ADDITIONAL EVIDENCE COULD BE PRODUCED TO PROVE THAT HIS ACCOUNT WAS INDEED USED AS AN BENAMI ACCOUNT BY HIS EMPLOYER. NOW THE QUESTION ARISE IF A UNDISCLOSED ACCOUNT IS FOUND, THEN WHETHER ALL THE DEPOSITS IN THE SAID ACCOUNT SHOULD BE 9 ADDED AS INCOME OF THE ASSESSEE OR ONLY A INCOME ATTRIBUTED TO THE SAID TRANSACTIONS AFTER DUE ANALYSIS OF THE TOTAL RECEIPTS AND PAYMENTS SHOULD BE TAKEN AS UNDISCLOSED INCOME OF THE ASSEESEE. 2.4 FROM THE PERUSAL OF THE BANK ACCOUNTS' IT IS APPARENT THAT THAT DURING THE YEAR UNDER CONSIDERATION THERE IS TOTAL CASH DEPOSITS OF 23,59,000/- AGAINST CASH WITHDRAWAL OF RS.13,63,000/-. FURTHER DD OF RS. 961931/- HAS BEEN ISSUED FROM THE SAID BANK ACCOUNT IMMEDIATELY AFTER DEPOSIT OF CASH. CASH HAS BEEN WITHDRAWN IMMEDIATELY AFTER DEPOSIT OF CHEQUES FURTHER MOST OF THE PAYMENTS ARE MADE AGAINST EXPENDITURES MADE THROUGH CREDIT CARDS. HENCE TAKING ALL THE FACTS TOGETHER IT IS APPARENT THAT IT WILL NOT BE CORRECT TO TREAT THE TOTAL DEPOSITS AS INCOME OF THE ASSESSEE WITHOUT GIVING DUE CONSIDERATION TO THE WITHDRAWALS AND EXPENDITURES. MOREOVER IF ONE ONLY TAKE DEPOSITS WITHOUT GIVING SET-OFF TO THE WITHDRAWAL THEN IT WILL RESULT DOUBLE ADDITION. LIKEWISE IF RECEIPTS ARE TAKEN AS INCOME THEN 10 WITHDRAWAL AND PAYMENTS HAS ALSO TO BE TREATED AS EXPENDITURE. HOWEVER IN THE CASE UNDER CONSIDERATION THE APPELLANT IS NOT IN A POSITION TO EXPLAIN THE TRANSACTIONS WITH SUPPORTING EVIDENCE. HENCE TAKING ALL THE (ACTORS INTO CONSIDERATION, THE PEAK CREDIT OF BOTH THE BANK ACCOUNTS OF THE ASSESSEE IS TREADED AS UNDISCLOSED INCOME .WHICH COMES TO RS. 19,50,000/-(A/C NO 398502010090651 RS. 18,50,000/- + A/C NO 398502010092638 RS.1,00,000/-). IN RESULT, THE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME IS RESTRICTED TO RS. 19,50,000/-. THE APPELLANT WILL GET RELIEF OF RS. 24,09,900/- ACCORDINGLY. 6.1 AFTER PERUSING THE AFORESAID FINDING OF THE LD. CIT(A), I FIND THAT DURING THE YEAR UNDER CONSIDERATION THERE IS TOTAL CASH DEPOSITS OF 23,59,000/- AGAINST CASH WITHDRAWAL OF RS.13,63,000 /- AND A DD OF RS.961931/- HAS BEEN ISSUED FROM THE SAID BANK ACCO UNT IMMEDIATELY AFTER DEPOSIT OF CASH. CASH HAS BEEN WI THDRAWN IMMEDIATELY AFTER DEPOSIT OF CHEQUES. FURTHER MOST OF THE PAYMENTS WERE MADE AGAINST EXPENDITURES THROUGH CREDIT CARDS . THEREFORE, IT WILL NOT BE CORRECT TO TREAT THE TOTAL DEPOSITS AS INCOME OF THE ASSESSEE WITHOUT GIVING DUE CONSIDERATION TO THE WI THDRAWALS AND EXPENDITURES. MOREOVER IF ONE ONLY TAKE DEPOSITS WI THOUT GIVING SET- OFF TO THE WITHDRAWAL THEN IT WILL RESULT DOUBLE AD DITION. LIKEWISE IF RECEIPTS ARE TAKEN AS INCOME THEN WITHDRAWAL AND PA YMENTS HAS ALSO TO BE TREATED AS EXPENDITURE. HOWEVER IN THE CASE U NDER 11 CONSIDERATION THE ASSESSEE IS NOT IN A POSITION TO EXPLAIN THE TRANSACTIONS WITH SUPPORTING EVIDENCE. HENCE TAKING ALL THE FACTORS INTO CONSIDERATION, THE PEAK CREDIT OF BOTH THE BAN K ACCOUNTS OF THE ASSESSEE WAS TREATED AS UNDISCLOSED INCOME WHICH CO MES TO RS. 19,50,000/-(A/C NO 398502010090651 RS. 18,50,000/- + A/C NO 398502010092638 RS.1,00,000/-). THEREFORE, THE ADDI TION ON ACCOUNT OF UNDISCLOSED INCOME WAS RIGHTLY RESTRICTE D TO RS. 19,50,000/- BY THE LD. CIT(A). IN VIEW OF THE ABOVE FACTS, I AM OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS PASSED A SPEAKING AND WELL REASONED ORDER, WHICH DOES NOT NEED ANY INTER FERENCE ON MY PART, HENCE, I UPHOLD THE ORDER OF THE LD. CIT(A) O N THE ISSUE IN DISPUTE AND REJECT THE ISSUE IN DISPUTE RAISED B Y THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 17-08-2017. SD/ (H.S. SIDHU) JUDICIAL MEMBER DATED :17-08-2017 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.