ITO, UDAIPUR V. Shri Rajesh Sinha, UDAIPUR

ITA 509/JODH/2013

• Counselvise Citation: 50923314 RSA 2013
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 11-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Income from undisclosed sources; Peak credit; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 509/JU/2013 ASSESSMENT YEAR: 2008-09 THE INCOME-TAX OFFICER VS. SHRI RAJESH SINHA WARD 2(2) 5, NEW POLO GROUND, UDAIPUR NEAR HANUMAN TEMPLE SAHELI NAGAR, UDAIPUR PAN NO. AMLPS 6840 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI DEPARTMENT BY : SHRI N.A. JOSHI, DR DATE OF HEARING : 30.04.2014 DATE OF PRONOUNCEMENT : 05.05.2014 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE FOR A.Y 2008-2009 AGAINST THE ORDER OF THE CIT(A), UDAIPUR, DATED 12.08.2013. 2 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS A PPEAL: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT (A) HAS ERRED IN: 1. REDUCING THE ADDITION OF RS. 12,75,759/- TO RS. 1,35,294/- BY TAKING THE PEAK CREDIT ON THE BASIS O F DETAILS FILED BY THE A.R. BEFORE THE ID. CIT(A) WIT HOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF CASH DEPOSITED IN UNDISCLOSED SAVING BANK ACCOUNT. 2.1 ACCEPTING THE ADDITIONAL EVIDENCES DESPITE TH E FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE COMPEL LING CIRCUMSTANCES WHICH PREVENTED HIM TO FILE THE DETAI LS BEFORE THE AO AS PER RULE 46A OF THE I.T. RULE. 2.2 ALSO ERRED IN ACCEPTING THE ADDITIO NAL EVIDENCES WITHOUT GIVING OPPORTUNITY TO THE A.O. AS REQUIRED UNDER RULE 46A. 3. GIVING THE BENEFIT OF PEAK CREDIT TO THE ASS ESSEE WITHOUT APPRECIATING THE FACT THAT THE PEAK CREDIT CANNOT BE APPLIED IN ASSESSEE'S CASE SINCE THE CASH DEPOSITS WERE MADE AT VARIOUS PLACES AND ON VARIOUS DATES AND WHEREAS ALL THE WITHDRAWALS WERE MADE AT 3 UDAIPUR ITSELF ON VARIOUS DATES; AND FURTHER THE AS SESSEE COULD NOT SUBSTANTIATE HIS ARGUMENT THAT THE MONEY SO WITHDRAWN FROM BANK THROUGH LARGE NUMBER OF CHEQUES AT DIFFERENT DATES IN FACT REPRESENTED CASH CHEQUES ONLY AND NOT OTHERWISE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE A.O. HAS MADE AN ADDITION OF RS. 13,20,759/- ON ACCOUNT OF I NCOME FROM UNDISCLOSED SOURCES BEING CASH DEPOSITS IN THE BANK AND HAS ALSO ADDED RS. 36 BEING THE RELATED INTEREST THEREON. T HE ASSESSEE IS A SALARIED PERSON WHO ALSO DERIVES INCOME FROM AGRICU LTURAL ACTIVITIES. FOR A.Y. 2008-09, HE FILED HIS RETURN OF INCOME [RO I] ON 24.3.2009 DECLARING TOTAL INCOME OF RS. 1,12,200/-. THE ASSE SSEE IS EMPLOYED IN M/S RAJDEEP MARBLE & MINERALS, UDAIPUR AS ITS MA NAGER. THE ASSESSEE WAS ASKED TO SPECIFICALLY FURNISH COPIES O F ALL BANK ACCOUNT STATEMENTS FOR THE PERIOD 1.4.2007 TO 31.3.2008 MAI NTAINED IN HIS OWN NAME AND IN THE NAMES OF OTHER FAMILY MEMBERS. THE ASSESSEE REPLIED VIDE LETTER DATED 20.8.2010 THAT HE IS HAVI NG SAVING BANK ACCOUNT WITH UCO BANK, BAPU BAZAR, UDAIPUR WITH ACC OUNT NO. 13306. IT WAS STATED THAT HE HAD CLOSED THIS BANK ACCOUNT IN F.Y. 2009-10 AND HAD SURRENDERED BANK PASS BOOK. THEREF ORE, HE 4 PLEADED THAT DUE TO CLOSURE OF BANK ACCOUNT, THE BA NK WAS NOT ISSUING THE STATEMENT OF THE BANK ACCOUNT. HE STAT ED THAT APART FROM THIS BANK ACCOUNT, HE DOES HAVE ANY OTHER BANK ACCOUNT. AS PER THE AIR INFORMATION GATHERED FROM THE COMPUTER SYSTEM, IT WAS NOTED THAT THE ASSESSEE HAD MAINTAINED BANK ACCOUNT IN HIS NAME IN BANK OF BARODA, SUKHER BRANCH, UDAIPUR IN WHICH CAS H DEPOSITS TOTALING RS. 10,30,800/- HAD BEEN MADE DURING THE Y EAR UNDER CONSIDERATION. THE ASSESSEE WAS ASKED TO FURNISH D ETAILS OF DEPOSITS AND WITHDRAWALS MADE IN THIS BANK ACCOUNT. IN THE MEANTIME, THE A.O. OBTAINED BANK STATEMENT OF THE ASSESSEE FROM T HE BANK OF BARODA DIRECTLY. IT WAS FOUND THAT THE ASSESSEE HA D MAINTAINED A SAVINGS BANK ACCOUNT IN HIS NAME IN BANK OF BARODA AND CASH WAS DEPOSITED TOTALING RS. 12,75,759/-. THE AUTHORISIE D REPRESENTATIVE OF THE ASSESSEE ALSO PRODUCED A COPY OF THIS BANK A CCOUNT IN BANK OF BARODA. AFTER PERUSAL OF THE SAME, IT WAS NOTICED THAT CASH DEPOSITS AT VARIOUS PLACES IN THE COUNTRY, NAMELY, BETTIA, NEW DEHI, GURGAON, CHENNAI, JAMSHEDPUR, AGRA, RANCHI, FARIDAB AD, INDORE ETC WERE MADE IN THIS BANK ACCOUNT. THE ASSESSEE WAS A SKED T EXPLAIN THE SOURCE OF THESE DEPOSITS. THE ASSESSEE REPLIED VIDE LETTER DATED 29.11.2010 AS UNDER: 5 1. THAT THE ASSESSEE IS HAVING SAVING ACCOUNT WITH BANK OF BARODA, SUKHER, UDAIPUR. THE ASSESSEE IS DO ING SERVICE WITH M/S. RAJDEEP MARBLE & MINERALS, UDAIPU R WHERE HE USUALLY MNAKES VARIOUS TOURS FOR BETIA, JAMSHEDPUR, NEW DELHI NCR, AGRA AND CHENNAI AND OTHER DIFFERENCE PLACES FOR GETTING BUSINESS FOR HI S EMPLOYER AND THUS, HE IS HAVING VARIOUS BUSINESS RELATIONS AND FRIENDS AT THESE PLACES DUE TO HIS BU SINESS ACTIVITY: 2. SOMETIMES, WHEN HIS FRIENDS CAME TO UDAIPUR FO R THEIR BUSINESS PURPOSE AND THEY ARE HAVING INSUFFIC IENT CASH AND NEED PETTY AMOUNT OF CASH FOR PAYMENT TO PARTIES, HE HELP THEM IN CASH FOR PAYMENT TO THE SE LLER PARTIES AND THEY REMITTED THE AMOUNT OWE FROM THE ASSESSEE DEPOSITING CASH IN BANK ACCOUNT OF THE ASS ESSEE AT THEIR HOME TOWN. THE TRANSACTION APPEARING IN T HE BANK ACCOUNT WITH BANK OF BARODA, SUKHER, UDAIPUR REFLECTS TRANSACTIONS OF SUCH NATURE ONLY. THE PART IES DEPOSITED CASH IN THE BANK ACCOUNT OF THE ASSESSEE FROM THEIR PLACES WHICH HAVE ALREADY BEEN PAID BY THE ASSESSEE TO HELP THEM IN UDAIPUR FOR BUSINESS NEEDS ; 3. YOU HAVE ASKED EXPLANATION FOR EACH TRANSITION OF BANK ACCOUNT BUT IT IS NOT POSSIBLE FOR US TO EXPLA IN CASH TRANSACTION OF BANK ACCOUNT AS THESE TRANSACTIONS 6 REFLECT PERSONAL TRANSACTION FOR HELPING HAND ONLY AND THERE IS NO NEXUS WITH BUSINESS TRANSACTIONS. 4. THE A.O. FOUND THE ABOVE EXPLANATION OF THE ASSE SSEE PRIMA FACIE AS FABRICATED AND CONFIRMED IT. IN ADDITION TO THE ABOVE REPLY, THE ASSESSEE MADE FURTHER SUBMISSIONS THROUG H WRITTEN REPLY ON 1.12.2010 WHICH READS AS UNDER: ' 1. THAT THE TRANSACTIONS IN BANK ACCOUNT WITH BANK OF BARODA, SUKHER, UDAIPUR IS IN CASH; I.E. CASH DEPOS IT AND CASH WITHDRAWAL. CASH DEPOSITED BY THE FRIENDS OF T HE ASSESSEE IN THEIR HOME TOWN WHICH WAS GIVEN TO THEM BY THE ASSESSEE IN UDAIPUR DURING THEIR BUSINESS VISIT TO HELP THEM OUT, HAS BEEN WITHDRAWN BY THE ASSESSEE I N UDAIPUR. THUS, THERE IS ROTATION OF MONEY ONLY. THE ASSESSEE HAS ROTATED SMALL MONEY ONLY TO HELP HIS FRIENDS AND TAKEN ADVANTAGE FOR BUSINESS OF HIS EMPLOYER. ROTATION OF MONEY IN CASH IS NOT A UNDISCLOSED INCOME OF THE ASSESSEE BECAUSE ONCE THE CASH DEPOSITED IN THE BANK HAS SUBSEQUENTLY WITHDRA WN BY THE ASSESSEE AND THE WITHDRAWN AMOUNT HAS AGAIN BEEN GIVEN TO OTHER FRIENDS. THUS, THERE IS ROTATIO N OF CASH ONLY. MAXIMUM CASH DEPOSITED AT A TIME IN BANK ACCOUNT IS RS. 49,900/- ONLY WHICH IS PEAK CREDIT I N THE BANK ACCOUNT; 7 2. THE ASSESSEE IS A REGULAR ASSESSEE OF THE DEPART MENT SINCE A. Y. 2000-01 AND HAVING CASH OF RS. 49,900/- IN JUSTIFIED LOOKING TO THE INCOME DISCLOSED BY THE AS SESSEE IN RETURN OF INCOME. BUT THE A.O. WAS NOT SATISFIED AND MADE TOTAL ADDIT ION OF RS. 12,75,759/- BY TREATING THE CASH DEPOSITS IN THIS B ANK ACCOUNT AS UNEXPLAINED. THE A.O. ALSO MADE ADDITION OF RS. 45 ,000/- HAVING BEEN MADE THEREIN. BEING AGGRIEVED, THE ASSESSEE P REFERRED APPEAL AND THE LD. CIT(A) HAS GIVEN A MAJOR RELIEF TO THE ASSESSEE BY ADOPTING THE PEAK CREDIT THEORY AND HAS SUSTAINED A DDITION OF RS. 1,35,294/- ONLY AS INCOME FROM UNDISCLOSED SOURCES. HOWEVER, HE HAS CONFIRMED THE INTEREST INCOME OF RS. 36/-. NOW THE REVENUE IS AGGRIEVED. 5. AFTER HEARING BOTH THE SIDES, WE HAVE FOUND THAT THE ONLY MATERIAL GROUND RAISED IS REGARDING REDUCTION OF AD DITION OF RS. 12,75,759/- TO RS. 1,35,294/- BY TAKING THE PEAK CR EDIT THEORY ON THE BASIS OF DETAILS FILED. THE DEPARTMENT HAS CHAL LENGED THE BENEFIT GIVEN BY GIVING PEAK CREDIT THEORY AND HAS ALSO DISPUTED THAT THE DETAILS FILED BY THE AUTHORIZED REPRESENTA TIVE BEFORE THE 8 LD. CIT(A) WHICH IS ONLY A COPY OF STATEMENT OF ACC OUNT IN THE BANK. THE DEPARTMENT HAS TREATED THIS STATEMENT AS ADDITI ONAL EVIDENCE AND HAS TAKEN A GROUND U/R 46A OF THE I.T. RULES TH AT THE ADDITIONAL EVIDENCE HAVE BEEN ACCEPTED WITHOUT GIVING OPPORTUN ITY OF BEING HEARD TO THE A.O. BUT DURING HEARING, IT WAS FOUND THAT, IN FACT, NO ADDITIONAL EVIDENCE AS HAS BEEN ALLEGED WAS FILED B EFORE THE LD. CIT(A). THE BANK STATEMENT DEPICTING CASH DEPOSITS WAS ALREADY AVAILABLE BEFORE THE A.O. THE LD. CIT(A) HAS EXTRA CTED THE ENTIRE STATEMENT OF THE BANK IN RESPECT OF THE ACCOUNT OF THE ASSESSEE IN THE BANK OF BARODA, SUKHER, UDAIPUR. WE HAVE GONE THROUGH ALL THE DETAILS AND HAVE FOUND THAT WHEN THE A.O. IS OF THE OPINION THAT ALL THESE DEPOSITS BELONG TO THE ASSESSEE, THEN JUSTIFI ABLY THE BENEFIT OF PEAK CREDIT HAS TO BE ALLOWED TO THE ASSESSEE. THIS IS A FIT CASE OF EXTENDING THE BENEFIT OF PEAK CREDIT PRINCIPLE B ECAUSE THERE ARE NUMEROUS CREDITS/DEPOSITS WHICH WERE MADE IN THIS O NE ACCOUNT. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE FIND ING OF THE LD. CIT(A). WE HAVE ALSO FOUND THAT THE PEAK CREDIT WO RKS OUT TO RS. 1,35,294/- AS ON 14.1.2008. ACCORDINGLY, WE CONFIR M THE IMPUGNED FINDING AND DISMISS THE APPEAL OF THE REVENUE. 9 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 05 TH MAY, 2014. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 05 TH MAY, 2014 VL/- COPY TO: THE APPELLANT THE RESPONDENT THE CIT BY ORDER THE CIT(A) THE DR ASSISTANT REGISTRAR ITAT, JODHPUR