ACIT CIR 25(3), MUMBAI V. MAHENDRA NARAYAN RAJU, MUMBAI

ITA 5073/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88494 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VATRA
• Assessee Lawyers: AJAY R SINGH
• Keywords: Peak credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO. 5073/MUM/2012 (ASSESSMENT YEAR: 2009-10) A C I T - 25(3) VS. SHRI MAHENDRA NARAYAN RAJU 308, C-11, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI 400051 B-107, SAI CHHAYA, JUNCTION ASHOK NAGAR, AKURLI ROAD KANDIVALI (E), MUMBAI 400101 PAN - AAHPR6420Q APPELLANT RESPONDENT APPELLANT BY: SHRI VIVEK VATRA RESPONDENT BY: SHRI AJAY R. SINGH DATE OF HEARING: 02.03.2015 DATE OF PRONOUNCEMENT: 02.03.2015 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A)-35, MUMBAI AND IT PERTAINS TO A.Y. 2009-10. 2. THE ONLY GROUND URGED BY REVENUE READS AS UNDER: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN GIVING RELIEF ON THE ISSUE OF ADDIT ION U/S. 68 BY RESTRICTING THE ADDITION TO RS.14,01,847/- OUT OF R S.30,19,883/- TO THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT IT IS H IGHLY UNBELIEVABLE THAT A PRUDENT MAN WILL WITHDRAW CASH FROM ONE ACCO UNT TO DEPOSIT IN ANOTHER ACCOUNT AND WHEN MOST OF THE WITHDRAWALS AR E VERY SMALL TO THE EXTENT OF RS.500 TO FEW THOUSAND. 3. FACTS NECESSARY FOR DISPOSAL OF THE APPEAL ARE STAT ED IN BRIEF. ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM THREE PROPRIET ARY CONCERNS. FOR THE YEAR UNDER CONSIDERATION HE DECLARED TOTAL INCOME OF ` 45,45,189/-. THOUGH THE RETURN WAS ORIGINALLY PROCESSED UNDER SECTION 143(1 ) OF THE ACT IT WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. DURING THE COUR SE OF SCRUTINY PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE DEPOSI TED ` 30,19,883/- IN HIS SAVING BANK ACCOUNT OF ICICI BANK AT KANDIVALI. THE AO CALLED FOR THE DETAILS WITH REGARD TO AVAILABILITY OF CASH TO MAKE THE DEP OSIT. IN RESPONSE IT WAS ITA NO. 5073/MUM/2012 SHRI MAHENDRA NARAYAN RAJU 2 SUBMITTED THAT CASH HAS BEEN DEPOSITED FROM THE CAS H WITHDRAWN FROM DIFFERENT BANK ACCOUNTS AND CASH IN HAND. THE AO DI SBELIEVED THE VERSION OF THE ASSESSEE ON THE GROUND THAT IT WAS HIGHLY UNBEL IEVABLE THAT A PRUDENT MAN WILL WITHDRAW CASH FROM ONE ACCOUNT TO DEPOSIT IN ANOTHER ACCOUNT. ACCORDINGLY HE MADE AN ADDITION OF ` 30,19,883/- UNDER SECTION 68 OF THE ACT. 4. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THA T THERE WERE SEVERAL CASH WITHDRAWALS FROM OTHER BANK ACCOUNTS WHICH WER E DEPOSITED INTO ICICI BANK AND THEREFORE THERE IS SUFFICIENT SOURCE TO MA KE THE DEPOSIT. IN THE ALTERNATIVE IT WAS CONTENDED THAT EVEN ON MAKING DA Y TO DAY CASH BALANCE ANALYSIS THERE IS NEGATIVE CASH BALANCE TO THE EXTE NT OF ` 14,01,847/- ON 31.12.2008 AND THE AO COULD HAVE, AT BEST, TAKEN TH E PEAK CREDIT INTO CONSIDERATION EVEN IF THE MAIN PLEA IS NOT ACCEPTAB LE. DETAILED STATEMENT OF DAY TO DAY BALANCE IS FURNISHED BEFORE THE LEARNED CIT( A). HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) RESTRI CTED THE ADDITION TO ` 14,01,847/- BY OBSERVING AS UNDER: - UNDER THE GIVEN FACTUAL MATRIX OF THE CASE, THE AP PELLANTS SUBMISSION CANT BE ACCEPTED FULLY SINCE THERE IS NEGATIVE CAS H BALANCE ON MANY DATES, THE HIGHEST BEING ON 31.12.2008 AMOUNTING TO RS.14,01,847/-. THE ADDITION MADE BY THE A.O. IS RESTRICTED TO THE AMOU NT OF RS.14,01,847/- AND THE APPELLANT GETS RELIEF OF RS.16,18,036/- SIN CE THE ENTIRE CASH DEPOSIT CANT BE ADDED TO HIS INCOME. THEREFORE, GO ING BY THE PEAK CREDIT METHOD, I DIRECT THE A.O. TO DELETE THE AMOUNT OF ` 16,18,036/-. 5. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. AT THE T IME OF HEARING THE LEARNED SR. D.R. WAS MAINLY TRYING TO READ THE GROU ND OF APPEAL, PROBABLY UNDER THE IMPRESSION THAT THE ADDITION WHICH IS UND ER DISPUTE IS ` 30,19,883/-. WHEN IT WAS POINTED OUT TO HIM THAT TH E ENTIRE ADDITION IS NOT IN DISPUTE HE WAS UNABLE TO COMPREHEND AS TO WHAT I S THE ADDITION WHICH IS UNDER DISPUTE. AT THE OUTSET IT MAY BE NOTICED THAT IN THE GROUND OF APPEAL ADDITION OF ` 14,01,84/- IS CHALLENGED. THE LEARNED SR. D.R. APPE ARS TO HAVE NOT EVEN LOOKED INTO THE TYPOGRAPHICAL MISTAKE AND HE IS BLISSFULLY IGNORANT OF THE FACT THAT THE ADDITION, WHICH WAS CONFIRMED, WAS ONLY THE PEAK CREDIT. NO MATERIAL, WHATSOEVER, WAS PLACED BEFORE US AND N O ARGUMENT WAS FORTHCOMING TO SHOW THAT THE VIEW TAKEN BY THE CIT( A) UNDER THE GIVEN FACTUAL MATRIX IS WRONG AND CONTRARY TO LAW. ITA NO. 5073/MUM/2012 SHRI MAHENDRA NARAYAN RAJU 3 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFU LLY PERUSED THE RECORD. HAVING REGARD TO THE CIRCUMSTANCES OF THE C ASE WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE LEARNED CIT(A) DOES NO T CALL FOR ANY INTERFERENCE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND MARCH, 2015. SD/- SD/- ( CHANDRA POOJARI ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 2 ND MARCH, 2015 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 35, MUMBAI 4. THE CIT 25, MUMBAI CITY 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.