ITO, New Delhi V. Surinder Bhatia, Delhi

ITA 5334/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77797 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 08-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 18-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHALINI VERMA
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI C.M. GARG : JUDICIAL MEMBER ITA NO. 5334/DEL/2012 ASSTT. YR: 2009-10 INCOME-TAX OFFICER, VS. SH. SURINDER BHATIA, WARD-29(4), NEW DELHI. PROP. M/S NEW LIFE BRASSI ERS CO., 3214, RAM BAZAR, MORI GATE, DELHI. PAN: AHTPB 1682 K ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SMT. SHALINI VERMA SR. DR. RESPONDENT BY : NONE DATE OF HEARING : 08-07-2014 DATE OF ORDER : 11-07-2014. O R D E R PER S.V. MEHROTRA, A.M: THIS APPEAL, BY THE DEPARTMENT, IS DIRECTED AGAINST THE ORDER DATED 29- 8-2012 PASSED BY THE LD. CIT(A)-XXV, NEW DELHI, IN APPEAL NO. 128/2011- 12, RELATING TO A.Y. 2009-10. 2. NONE PUT IN APPEARANCE ON BEHALF OF THE ASSESSEE AT THE HEARING DESPITE ISSUE OF NOTICE FOR HEARING AT THE ADDRESS FURNISHED IN COLUMN NO. 11 OF FORM NO. 36. WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE, QUA THE ASSESSEE, ON MERITS AND IN THAT PROCESS WE HAVE HEA RD LD. SR. DR AND GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD FI LED RETURN DECLARING INCOMEOF RS. 1,85,140/-. ASSESSMENT WAS COMPLETED U /S 143(1). HOWEVER, SUBSEQUENTLY, NOTICE U/S 143(2) WAS ISSUED ON THE B ASIS OF AIR INFORMATION 2 REGARDING DEPOSIT OF RS. 12,33,132/- DEPOSITED IN I CICI BANK FOR THE PERIOD 1-4-2008 TO 31-3-2009. THE ASSESSEE IN ITS EXPLANAT ION, INTER ALIA, POINTED OUT THAT THE ACCOUNT WAS CLOSED ON 18-2-2009 AND TH E SUM DEPOSITED IN THIS ACCOUNT WAS MADE BY VARIOUS OUTSTATION PARTIES FOR SALE PROCEEDS OF GOODS SUPPLIED BY THE ASSESSEE. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES CONTENTION, INTER ALIA, OBSERVING THAT ASSESSEE HAD NOT GIVEN THE NAME AND ADDRESS OF THE PARTIES WHO HAD DEPOSITED THE AMOUN T. HE MADE AN ADDITION OF RS. 12,37,042/- U/S. 3.1. BEFORE LD. CIT(A) IT WAS SUBMITTED THAT THE TO TAL CASH DEPOSITS ON VARIOUS DATES WERE OUT OF THE SALE PROCEEDS OF BUSI NESS AND THE CASH WITHDRAWALS WERE ALSO MADE FROM THE SAME BANK ACCO UNT FOR THE PURPOSE OF BUSINESS. IT WAS SUBMITTED THAT THE ASSESSING OFFIC ER HAD MADE THE ADDITION ON THE BASIS OF ACCUMULATED CASH DEPOSITS WITHOUT C ONSIDERING THE CORRESPONDING CASH WITHDRAWALS WHICH WERE MADE FOR THE PURPOSE OF BUSINESS. IT WAS FURTHER POINTED OUT THAT IT IS THE SAME CASH OUT OF SALE PROCEEDS WHICH WAS DEPOSITED AND WITHDRAWN AND AGAI N DEPOSITED AS PER THE REQUIREMENT AND FOR THE PURPOSE OF BUSINESS. ACCORD INGLY, IT WAS POINTED OUT THAT ASSESSING OFFICER AT BEST COULD TAKE THE PEAK CREDIT OF THE CASH DEPOSITS FOR THE PURPOSE OF COMPUTING INCOME. 3.2. LD. CIT(A) ACCEPTED THE ASSESSEES CONTENTION AND RESTRICTED THE ADDITION TO RS. 3,60,000/- BY OBSERVING AS UNDER: 4.4. I HAVE CONSIDERED THE ORDER OF THE AO AND T HE SUBMISSIONS OF THE ASSESSEE AND I FIND CONSIDERABLE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE AO IS NOT JUST IFIED TO MAKE THE ADDITION OF THE TOTAL OR ACCUMULATED CASH DEPOS ITS WITHOUT CONSIDERING THE SIMULTANEOUS OR CORRESPONDING CASH WITHDRAWALS WHICH ARE FOR THE PURPOSE OF BUSINESS. IT IS NOT UNCOMMON FOR THE SMALL BUSINESS PEOPLE TO MAKE FREQ UENT CASH DEPOSITS AND WITHDRAWALS IN THE BANK ACCOUNTS OUT O F THE SALE 3 PROCEEDS AS PER THE REQUIREMENT OF BUSINESS CONVENI ENCE. IT IS SEEN THAT THE PEAK CREDIT IN THE BANK ACCOUNT OR PE AK CREDIT BALANCE AS ON 14/07/2008 IS RS. 3,53,200/- AND TO B E FAIR TO THE ASSESSEE THIS AMOUNT SHOULD BE TREATED AS PEAK CRED IT INCOME CONSIDERING THE PEAK CREDIT THEORY. 4.5. AFTER CONSIDERING ALL THE CASE FACTS AND CIRCU MSTANCES OF THE CASE, I AM OF THE VIEW THAT THERE IS NO PROPER JUSTIFICATION FOR MAKING THE ADDITION OF RS. 12,33,132/- OF THE T OTAL CASH DEPOSITS AND IT WILL BE IN THE INTEREST OF JUSTICE AND FAIRNESS TO ACCEPT THE PEAK CREDIT AMOUNT AS INCOME OF THE ASSE SSEE AND ACCORDINGLY, THE ADDITION TO THE EXTENT OF AMOUNT O F RS. 3,60,000/- IS CONFIRMED AND THE BALANCE ADDITION OF RS. 8,73,132 )RS. 12,33,132/-(-) RS. 3,60,000/-) IS DEL ETED. 4. WE HAVE HEARD LD. DR. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) BECAUSE ADMITTEDLY ASSESSEE WAS PARTNER IN M/S NEW LIFE BRASSIERS CO. AND WAS DOING BUSINESS. THEREFOR E, THE ASSESSEE WAS ENTITLED TO DEDUCTION OF WITHDRAWAL ALSO AGAINST TH E RECEIPTS FROM THE SAME BANK ACCOUNT. WE ACCORDINGLY, CONFIRM THE ORDER OF LD. CIT(A). 5. IN THE RESULT, DEPARTMENTS APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11-07-2014. SD/- SD/- ( C.M. GARG ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11-07-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 4