SHRI CHANDAN CHAUDHARY, Burhanpur V. The ITO, Burhanpur

ITA 523/IND/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5749 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 04-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: S S DESHPANDE
• Keywords: Unexplained investment; Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO.523/IND/2014 A.Y. : 2008-09 SHRI CHANDAN CHOUDHARY, ITO, BURHANPUR VS. BURHANPUR APPELLANT RESPONDENT PAN NO. AKXPC3957D A PPELLANT S BY : SHRI S.S.DESHPANDE, CA RESPONDENT BY : SHRI G.S.GAUTAM, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, INDORE, DATED 31.03.2014 FOR THE ASSE SSMENT YEAR 2008-09. 2. THIS APPEAL IS TIME BARRED BY FOUR DAYS. TO THIS EF FECT, THE ASSESSEE HAS FILED THE AFFIDAVIT STATING ON OAT H THAT THE DATE OF HEARING : 29.12.2015 DATE OF PRONOUNCEMENT : 08 .0 2 .201 6 SHRI CHANAN CHOUDHARY, BURHANPUR VS. ITO, BURHANPUR , I.T.A.NO. 523/IND/2014 A.Y. 2008-09 2 2 ORDER WAS RECEIVED BY THE ASSESSEE ON 1.6.2014. THE SECOND APPEAL WAS PREPARED BY SHRI D. R. KAPADIA OF BURHAN PUR AND DUE TO HIS ILLNESS THE APPEAL COULD NOT BE FILED IN TIME. THE ASSESSEE PRAYED THAT THE DELAY MAY BE CONDONED. 3. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - 1. THAT THE ORDER PASSED BY THE LD. AO AND ENHANCED BY THE LD. CIT(A) IS WRONG AND WITHOUT PROPER BASIS. 2. THAT THE LD. CIT(A) HAS ALSO ERRED IN NOT CONSIDERING THE FACTS REGARDING THE SOURCE OF INCOM E AS STATED IN GROUNDS OF APPEAL AND WRONGLY ADDED RS. 3,38,572/- BEING INCOME FROM INVESTMENT AND MONEY LENDING BUSINESS. THAT THE LD. CIT(A) IS ALSO WRONG IN ENHANCING THE INCOME AT RS. 2,87,153/-, THE SAME IS WITHOUT PROPER BASIS AND DESERVES TO BE CANCELLED. 4. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED THE RETURN OF INCOME ON 30.3.2009 SHOWING THE INCOM E OF RS. 1,00,910/- AND AGRICULTURAL INCOME OF RS. 75,000/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD SHOW N INCOME SHRI CHANAN CHOUDHARY, BURHANPUR VS. ITO, BURHANPUR , I.T.A.NO. 523/IND/2014 A.Y. 2008-09 3 3 IN THE FORM OF CATTLE TRADING, INTEREST INCOME FROM BANK AND AGRICULTURAL INCOME. THERE WAS AN AIR INFORMATION T HAT THE ASSESSEE WAS HAVING A SAVING BANK ACCOUNT WITH BANK OF INDIA AND IT WAS NOTICED THAT HUGE CASH TRANSACTION S HAVE BEEN DONE FROM THIS ACCOUNT. THE ASSESSEE HAS MADE CASH DEPOSIT OF RS. 31,79,300/- IN THE SAID ACCOUNT. THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS ENGAGED IN TRADING OF GOAT AND SHEEP. THE ASSESSEE HAD NO ANY OTHER BUSINESS. THEREFORE, THE ASSESSEE HAS WITHDRAWN THIS AMOUNT A ND DEPOSITED THIS AMOUNT. THE AO AFTER CONSIDERING THE BANK DEPOSIT AND PEAK CREDIT OF CASH DEPOSIT IN BANK ACC OUNT WAS TAKEN AT RS. 3,07,765/-, WHICH WAS TREATED AS UNEXP LAINED INVESTMENT OF THE ASSESSEE. MOREOVER, 10% OF THE PE AK INVESTMENT WAS HIS PROFIT AND MADE THE ADDITION OF RS. 3,38,542/-. 5. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS WORKED OUT 10% OF THE TOTAL DEPOSIT AS HIS PROF IT AND THE PROFIT WAS DEPOSITED IN THE BANK ACCOUNT. THEREFORE , RS. 2,87,153/- WAS ADDED TO THE INCOME OF THE ASSESSEE. SHRI CHANAN CHOUDHARY, BURHANPUR VS. ITO, BURHANPUR , I.T.A.NO. 523/IND/2014 A.Y. 2008-09 4 4 6. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED BEFORE ME THAT THE ASSESSEE HAS BANK DEPOSITS AGGREGATING TO RS. 31,79,300/- AND THE AO HAS COMPUTED THE PEAK CREDIT AND NET DEPOSIT OF RS. 3,07,765/- WAS ADDED AS A BUSINESS I NCOME AND, MOREOVER, THE AO HAS CALCULATED 10% OF THE INV ESTMENT AS HIS PROFIT. THE ASSESSEE ALSO SUBMITTED THAT IF THIS ADDITION IS SUSTAINED AND IF THE FURTHER ADDITION OF RS. 2,8 7,153/- IS MADE, IT WILL AMOUNT TO DOUBLE ADDITION. THEREFORE, IT MAY BE DELETED. 7. THE LD. DR OBJECTED TO IT. 8. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT AS PER THE ASSESSMENT ORDER, THE AO HAS WORKED OUT THE PROFIT OF UNDISCLOSED INCOME AT RS. 30,777/- @ 10%. IT IS OBSERVED THAT THE RATE OF 10% HAS BEEN APPLIED FOR PEAK INVE STMENT FIGURE INSTEAD OF APPLYING TOTAL TURNOVER OF RS. 31 ,79,300/-. I FIND THAT THE PEAK INVESTMENT IS ADDED AS INCOME OF THE ASSESSEE AND NET PROFIT OF THE SAME HAS ALREADY BEE N WORKED OUT BY THE ASSESSING OFFICER. THEREFORE, THE ADDITI ON ON THE SAME AMOUNT OF TURNOVER OF RS. 31,79,300/- IS NOT R EQUIRED TO SHRI CHANAN CHOUDHARY, BURHANPUR VS. ITO, BURHANPUR , I.T.A.NO. 523/IND/2014 A.Y. 2008-09 5 5 BE DONE. THEREFORE, I DELETE THE SAME. I CONFIRM TH E ADDITION OF RS. 3,38,542/- ON ACCOUNT OF UNEXPLAINED INVESTMENT AND UNDISCLOSED PROFIT OF RS.30,777/- ON UNDISCLOSED BU SINESS AND REST OF THE ADDITION IS ENHANCED. 9. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COU RT ON 8 TH FEBRUARY, 2016. SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 8 TH FEBRUARY, 2016. CPU* 414