Yati Garg, New Delhi V. ITO, New Delhi

ITA 5238/DEL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77617 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 11-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 25-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Salary income; Peak credit
• Section: 234B; 68; 69

Judgement Text

ITA NO. 5238/DEL/2011 ASSTT.YEAR: 2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `H NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.5238/DEL/2011 ASSESSMENT YEAR : 2008-09 YATI GARG, VS INCOME TAX OFFICER, C/O RAJ KUMAR & ASSOCIATES,CA W ARD-25(2), 4435/7, ANSARI ROAD, NEW DELHI. DARYA GANJ, NEW DELHI-110002 (PAN: AIAPG1319A) (APPELLANT) (RESPONDENT ) APPELLANT BY: SHRI RAJ K UMAR RESPONDENT BY : SHRI SAMEER SHARMA, SR.DR O R D E R PER CHANDRAMOHAN GARG, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF COMMISSIONER OF INCOME TAX(A)-XXI, NEW DELHI DATED 08.08.2011 IN APPEAL NO. 159/10-11 FOR AY 2008-09. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THI S APPEAL:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES, LOWER AUTHORITIES ERRED IN LAW AND ON FACTS IN TREATING T HE CREDITS OFT. 23,12,8751- IN PNB BANK ACCOUNT AS BELONGING TO ASSESSEE AGAINST CLAIMED AS OF HUF AND ERRED IN ADDING THE SAME U/S. 68 AND 69. 2. THAT THE CREDITS RELATES TO RETAIL TRADE OF HUF ON WHICH, AT THE MOST, THE PROFIT SHOULD BE CALCULATED U/S. 44 ITA NO. 5238/DEL/2011 ASSTT.YEAR: 2008-09 2 AF BEING 5% OF TURNOVER OF T.16,75,0001-, WHICH PRO FIT CALCULATES RS.83,750/- 3. THAT WITHOUT PREJUDICE, TO G. N. 2, ALTERNATIVEL Y, IT SHOULD HAVE BEEN TREATED AS RETAIL TURNOVER OF ASSE SSEE AND PROFIT SHOULD BE CALCULATED AT RS.83,750/- @5% OF TURNOVER OF RS. 16,75,000/-. 4. THAT WITHOUT PREJUDICE, EVEN ON PRESUMING THESE CREDITS AS UN-EXPLAINED, THE ADDITION SHOULD NOT EX CEED BY THE FIGURE OF PEAK OF SUCH CREDIT. 5. THAT NO INTEREST U/S. 234 B SHOULD HAVE BEEN LEVIED. 3. BRIEFLY STATED, THE FACTS GIVING RISE TO THIS AP PEAL ARE THAT THE ASSESSEE FILED RETURN OF INCOME DECLARING AN INCOME OF RS.1, 23,507 ON 29.03.2009. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AN D STATUTORY NOTICES WERE ISSUED AND SERVED ON THE ASSESSEE. THE ASSESSEE DE RIVES INCOME FROM SALARY AS A PARTNER IN GARG BEARING CO. AND BANK INTEREST. ON BEING ASKED BY THE ASSESSING OFFICER ABOUT THE BANK ACCOUNT OF THE ASS ESSEE, THE ASSESSEE SUBMITTED THAT HE MAINTAINED ONLY ONE BANK ACCOUNT IN SBI, SHAKUR BASTI BRANCH, NEW DELHI. THEN THE ASSESSING OFFICER CONF RONTED THE ASSESSEE WITH HIS ACCOUNT IN PUNJAB NATIONAL BANK, RANI BAGH , DELHI WHEREIN THERE WAS A CASH DEPOSIT AMOUNTING TO RS.23,12,875 DURING F.Y. 2007-08. THE ASSESSING OFFICER HELD THAT THE EXPLANATION SUBMITT ED BY THE ASSESSEE WAS NOT SATISFACTORY AND THE ASSESSING OFFICER ADDED TH IS AMOUNT TO THE RETURNED ITA NO. 5238/DEL/2011 ASSTT.YEAR: 2008-09 3 INCOME OF THE ASSESSEE U/S 68 AND 69 OF INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 4. BEING AGGRIEVED BY THE ABOVE ASSESSMENT ORDER, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX(A) WHICH WAS ALSO DISMISSED BY PASSING IMPUGNED ORDER. NOW, THE EMPT Y HANDED ASSESSEE IS BEFORE THIS TRIBUNAL IN THE SECOND APPEAL WITH THE GROUNDS AS REPRODUCED HEREINABOVE. GROUND NO. 4 OF THE ASSESSEE 5. THE AR STARTED THE ARGUMENTS WITH GROUND NO. 4 A ND THE LD. DR HAS NOT PLACED ANY SERIOUS OBJECTION IN THIS REGARD. A PROPOS GROUND NO.4, THE AR PLACED RELIANCE ON VARIOUS DECISIONS INCLUDING D ECISION OF JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF C OMMISSIONER OF INCOME TAX VS KULWANT RAI 291 ITR 36 (DEL); DECISIO N OF HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF IN COME TAX VS SHRI KAMAL KUMAR BHOLA IN ITA NO. 5781/2010 DATED 28.09. 2011; DECISION OF HONBLE M.P. HIGH CORUT IN THE CASE OF COMMISSIO NER OF INCOME TAX VS RAJEEV SHUKLA 296 ITR 743 AND DECISION OF ITAT D ELHI C BENCH IN ITA NO.4183/DEL/2010 DATED 12.11.2010. ON THE BASIS OF THESE DECISIONS RELIED BY THE AR, IT HAS BEEN CONTENDED THAT WHEN T HERE IS A SMALL DEPOSIT DURING THE WHOLE YEAR IN THE BANK ACCOUNT OF THE AS SESSEE, THEN TOTAL AMOUNT ITA NO. 5238/DEL/2011 ASSTT.YEAR: 2008-09 4 OF DEPOSITS DURING THE FINANCIAL YEAR CANNOT BE TRE ATED AS INCOME IN THE HANDS OF ASSESSEE. AT THE MOST, THE PEAK OF RS. 1,53,123 MAY BE TAKEN AS INCOME OF THE ASSESSEE OUT OF THESE DEPOSITS OF RS.23,12,8 75. LD. DR FAIRLY ACCEPTED THAT THE DEPARTMENT HAS NO SERIOUS OBJECTI ON IF THE AMOUNT OF PEAK CREDIT IS TAKEN AS INCOME OF THE ASSESSEE OUT OF TO TAL DEPOSITS MADE DURING THE FINANCIAL YEAR TO THE BANK ACCOUNT OF THE ASSES SEE. 6. SINCE ADMITTEDLY, THERE WAS A DEPOSIT OF RS.23,1 2,875/- DURING THE FINANCIAL YEAR TO THE BANK ACCOUNT OF THE ASSESSEE WHICH WAS DEPOSITED IN SALARY AMOUNTS OF THOUSANDS ON VARIOUS DATES, THEN IT CANNOT BE JUSTIFIED IF ENTIRE AMOUNT OF DEPOSITS DURING THE YEAR IS CONSID ERED AS INCOME IN THE HANDS OF ASSESSEE. RESPECTFULLY FOLLOWING THE ABO VE REFERRED DECISIONS, SPECIALLY THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS KULWANT RAI (SUPRA) A ND DECISION OF COORDINATE BENCH OF DELHI IN THE CASE OF ITO VS HAR I SHANKAR (SUPRA), WE HOLD THAT IN THIS SITUATION, ONLY THE PEAK CREDIT C AN BE TAKEN AS INCOME OUT OF THESE DEPOSITS MADE DURING THE YEAR TO THE BANK ACC OUNT OF THE ASSESSEE. ACCORDINGLY, IN VIEW OF ABOVE, GROUND NO. 4 OF THE ASSESSEE IS ALLOWED WITH THIS DIRECTION TO THE ASSESSING OFFICER THAT THE AS SESSING OFFICER SHALL TAKE ONLY PEAK CREDIT AS INCOME OF THE ASSESSEE OUT OF T HESE DEPOSITS AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSE E. FINALLY, GROUND NO.4 OF ITA NO. 5238/DEL/2011 ASSTT.YEAR: 2008-09 5 THE ASSESSEE IS ALLOWED WITH THE DIRECTION TO THE A SSESSING OFFICER AS INDICATED ABOVE. GROUND NO. 1, 2 & 3 7. DURING THE ARGUMENTS, LD. AR SUBMITTED THAT IF F OURTH ALTERNATIVE CONTENTION OF THE ASSESSEE PERTAINING TO THE BOOK C REDIT IS ACCEPTED, THEN THE ASSESSEE IS NOT INTERESTED TO AGITATE THESE GROUNDS ON MERITS. THUS, GROUND NO. 1, 2 & 3 OF THE ASSESSEE ARE DISMISSED AS NOT P RESSED. GROUND NO. 5 OF THE ASSESSEE 8. GROUND NO. 5 OF THE ASSESSEE IS CONSEQUENTIAL TO THE MAIN GROUND OF THE ASSESSEE, THEREFORE, THE SAME IS ALSO RESTORED TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION THAT THE ISSUE OF INTEREST U/S 234B OF THE ACT SHALL BE DECIDED IN CONSEQUENCE TO THE DETERMINATION OF INCO ME ON THE BASIS OF PEAK CREDIT AS DIRECTED ABOVE. THUS, GROUND NO. 5 OF TH E ASSESSEE IS RESTORED TO THE FILE OF ASSESSING OFFICER. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS POSED OF IN THE MANNER AS MENTIONED HEREINABOVE AND MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 5238/DEL/2011 ASSTT.YEAR: 2008-09 6 ORDER PRONOUNCED IN THE OPEN COURT ON 17.4.2014. SD/- SD/- (G.D. AGRAWAL) (CHANDRA MOHAN GARG) VICE PRESIDENT JUDICIAL MEMBER DT. 17 TH APRIL 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR