Sh. Chanchal Bassi, Jalandhar V. The Income-tax Officer, Jalandhar

ITA 572/ASR/2014

• Counselvise Citation: 57220914 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 24-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR KANCHAN GARG
• Assessee Lawyers: SANDEEP VIJH
• Keywords: Unexplained cash credit; Peak credit; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.572(ASR)/2014 ASSESSMENT YEAR:2008-09 PAN: AHVPB9645E SH. CHANCHAL BASSI, VS. INCOME TAX OFFICER, 315, DILBAGH NAGAR, WARD-1(1), JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. SANDEEP VIJH, CA RESPONDENT BY: DR. KANCHAN GARG, DR DATE OF HEARING: 09/12/2015 DATE OF PRONOUNCEMENT: 14/12/2015 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT YE AR 2008-09, AGAINST THE ORDER DATED 01.08.2014, PASSED BY THE LD. CIT(A), JALANDHAR. THE ASSSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL: 1(A) THAT THE LD. CIT(A), HAS ERRED IN SUSTAINING THE ADDITION OF RS.9,03,100/- TOWARDS ALLEGED UNEXPLAINED CREDITS I N BANK ACCOUNTS. THE DETAILED SUBMISSIONS MADE BEFORE THE CIT(A) HAVE NOT BEEN APPRECIATED. (B) THAT THE LD. CIT(A), HAS ERRED IN NOT ADMITTING THE ADDITIONAL EVIDENCE DURING THE APPELLATE PROCEEDINGS. (C) THAT THE LD. CIT(A), HAS ERRED IN NOT APPRECIAT ING THE MISTAKE IN THE CALCULATION OF PEAK CREDIT MADE BY THE AO. W ITHOUT PREJUDICE TO THE ABOVE, AT WORST, THE ADDITION TOWA RDS PEAK WORKS OUT TO RS.6,58,138/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E AN INDIVIDUAL HAD FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ON ITA NO.572(ASR)/2014 ASSESSMENT YEAR : 2008-09 2 21.09.2008, DECLARING THEREIN AN INCOME OF RS.1,69, 340/-, WHICH ACCORDING TO ASSESSEE HAD BEEN EARNED FROM THE BUSI NESS OF PURCHASE AND SALE OF OLD VEHICLES SUCH AS MOTOR CYCLES & CAR S. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD SHOWN THE INCOME UNDER THE HEAD BUSINESS/PROFESSION. THE INFORMATION OF THE ASSESSEE WAS ALSO BY THE AO THROUGH AIR FILED BY T HE ICICI BANK LIMITED, ACCORDING TO WHICH, THE ASSESSEE IS MAIN TAINING A BANK ACCOUNT NO. 027301508357 WITH ICICI BANK LIMITED, I N WHICH, THE ASSESSEE, DURING THE YEAR UNDER CONSIDERATION, HAD MADE CASH DEPOSITS OF RS.17,70,600/-. IN RESPONSE TO THE QUERY WITH RE GARD TO THE SOURCES OF THE CASH DEPOSITS, IT WAS SUBMITTED BY THE ASSESS EE THAT THE CASH DEPOSITS IN THE BANK ACCOUNT REPRESENT THE RECEIPTS OF THE BUSINESS WHICH WAS BEING CARRIED ON BY HIM. THE ASSESSEE WAS STATED TO BE IN THE BUSINESS OF SALE AND PURCHASE OF OLD VEHICLES. SIN CE THE ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNT IN RESPECT OF H IS BUSINESS, THE AO ASKED THE ASSESSEE TO FURNISH DOCUMENTARY EVIDENCE IN RESPECT OF SALE AND PURCHASE OF OLD VEHICLES. IN RESPONSE THERETO, THE ASSESSEE FILED PHOTOCOPIES OF A FEW RECEIPTS, WHEREIN IT HAD BEEN CLAIMED THAT THE ASSESSEE HAD SOLD OLD VEHICLES, WHICH PERTAINED TO DIFFERENT PERSONS. HOWEVER, THE ASSESSEE COULD NOT FILE ANY EVIDENCE W ITH REGARD TO PURCHASE OF OLD VEHICLES WHICH COULD BE CORRELATED WITH THE ENTRIES IN THE CASH BOOK. THE AO WAS OF THE VIEW THAT THE ASS ESSEE HAD INTRODUCED CASH IN THE SELF PREPARED CASH BOOK, JUST TO EXPLAI N VARIOUS CREDIT ENTRIES IN THE BANK ACCOUNT. THE AO OBSERVED THAT THE CASH BOOK ENTRIES ARE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. THE ASSESSEE ALSO COULD NOT EXPLAIN BEFORE THE AO THAT FROM WHERE THE ASSESSE E HAD MADE PAYMENTS FOR PURCHASE OF OLD VEHICLES. AS THE CORRESPONDING EVIDENCES IN RESPECT OF ALL THE PURCHASE AND SALE OF OLD VEHICLES HAD NOT B EEN PRODUCED DURING ASSESSMENT PROCEEDINGS AND THE PERSONS FROM/TO TH E ASSESSEE HAD PURCHASED/SOLD THE OLD VEHICLES HAD NOT BEEN PRODU CED FOR VERIFICATION, THE AO TREATED ALL THE CREDIT ENTRIES IN THE BANK A CCOUNT OF THE ASSESSEE ITA NO.572(ASR)/2014 ASSESSMENT YEAR : 2008-09 3 FROM UNEXPLAINED SOURCES AND MADE AN ADDITION OF R S.9,03,100/- TO THE RETURNED INCOME OF THE ASSESSEE, WHICH IS EQUIVALEN T TO THE PEAK OF ALL THE CASH CREDIT ENTRIES IN THE BANK ACCOUNT OF THE ASSESSEE. 3. BEFORE, THE LD. CIT(A), THE ASSESSEE SOUGHT TO PRODUCE, BY WAY OF ADDITIONAL EVIDENCE, THE PROFIT & LOSS ACCOUNT AND BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2009 AND COPIES OF CERTAIN REC EIPTS IN RESPECT OF PURCHASE AND SALE OF OLD VEHICLES. IT WAS CONTENDED THAT THESE DOCUMENTS COULD NOT BE FILED BEFORE THE AO SINCE TH EY WERE NOT AVAILABLE AT THAT TIME. IT WAS ALSO CONTENDED THAT THE ASSESS EE HAD SUBMITTED CERTAIN DOCUMENTARY EVIDENCES SUPPORTING THE ASSES SEES CASE BEFORE THE AO, WHEREAS, THE AO HAD REJECTED THEM WITHOUT ANY B ASIS. HOWEVER, THE LD. CIT(A) REJECTED THE ASSESSEES REQUEST FOR ADDI TIONAL EVIDENCE, OBSERVING THAT THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE WAS NOTHING BUT SELF SERVING DOCUMENT. IT WAS ALSO OBSE RVED THAT THE SALE AND PURCHASE DOCUMENTS HAD NOT BEEN PROVIDED IN RESPECT OF ALL THE VEHICLES, WHICH HAD BEEN STATED TO HAVE BEEN PURCHASED AND S OLD; THAT THE SALE PRICE HAD ALSO NOT BEEN MENTIONED IN ANY OF THE DOC UMENT, THAT THE BALANCE SHEET DID NOT CONTAIN ANY DETAIL IN RESPECT OF CLOSING STOCK AVAILABLE WITH THE ASSESSEE. 4. IN AN APPLICATION FOR ADDITIONAL EVIDENCE FILED BEFORE ME, THE ASSESSEE HAS CONTENDED THAT SUCH ADDITIONAL EVIDENC E, WHICH WAS SOUGHT TO BE FILED BEFORE THE LD. CIT(A), INCLUDES THE ASS ESSEES REPLY FILED DURING THE ASSESSMENT PROCEEDINGS FOR THE NEXT ASSESSMENT YEAR, I.E. 2009-10 AND THE DOCUMENTS SHOWING SALE/PURCHASE OF VEHICLES AND AFFIDAVIT/CERTIFICATE REGARDING BANK WITHDRAWALS. I T HAS BEEN CONTENDED THAT THE REPLY DATED 20.10.2012 COULD NOT HAVE BEEN AVAILABLE WITH THE ASSESSEE WHEN THE ASSESSMENT FOR THE ASSESSMENT YEA R 2008-09 WAS COMPLETED; THAT THE DOCUMENTS EVIDENCING PURCHASE/ SALE OF VEHICLES WERE ALSO NOT AVAILABLE WITH THE ASSESSEE DURING TH E YEAR; THAT THE ITA NO.572(ASR)/2014 ASSESSMENT YEAR : 2008-09 4 ASSESSEES CONTENTION THAT HE WAS ENGAGED IN THE P URCHASE AND SALE OF VEHICLES NOT HAVING BEEN ACCEPTED, IT WAS WITH GREA T DIFFICULTY THAT THE ASSESSEE WAS ABLE TO OBTAIN CERTAIN ADDITIONAL EVID ENCE IN THIS REGARD AFTER THE COMPLETION OF THE ASSESSMENT PROCEEDINGS. 5. THE LD. DR, ON THE OTHER HAND, PLACED STRONG REL IANCE ON THE IMPUGNED ORDER IN THIS REGARD, CONTENDING THAT THE LD. CIT(A) RIGHTLY REJECTED THE APPLICATION FOR ADDITIONAL EVIDENCE, P ARTICULARLY IN VIEW OF THE DISCREPANCY CONTAINED THEREIN, AS SPECIFICALLY POIN TED OUT BY THE LD. CIT(A). 6. ON CONSIDERING THE RIVAL CONTENTIONS, IT IS SEEN THAT THE ADDITIONAL EVIDENCE SOUGHT TO BE FILED BY THE ASSESSEE COMPRIS ING OF THE ASSESSES REPLY DATED 20/10/2012 FILED BEFORE THE AO FOR THE ASSESSMENT YEAR 2009-10. THIS IS EVIDENTLY, WOULD NOT HAVE BEEN AVA ILABLE WITH THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 I.E. THE Y EAR UNDER CONSIDERATION. THE DOCUMENTS EVIDENCING PURCHASE/SA LE OF VEHICLES WERE ALSO NOT AVAILABLE WITH THE ASSESSEE AT THE TIME OF THE ASSESSMENT PROCEEDINGS. THE ASSESSEE HAD NOT MAINTAINED BOOKS OF ACCOUNT, WHICH FACTS STAND NOTED IN THE ASSESSMENT ORDER. THE ASSE SSEES STAND THAT HE WAS ENGAGED IN THE PURCHASE/SALE OF VEHICLES, WAS N OT ACCEPTED. IT WAS THIS THAT FORCED THE ASSESSEE TO OBTAIN DOCUMENTS IN THIS REGARD, WHICH CAME ABOUT ONLY AFTER COMPLETION OF THE ASSESSMENT PROCEEDINGS. NOW, IT CANNOT BE DENIED THAT THESE DOCUMENTS HAVE A DIRECT BEARING ON THE MATTER CONCERNING GROUND NOS. 1(A) & 1(B). AFFIDAVI T AND BANK CERTIFICATE ARE RELATED TO THE CALCULATION OF PEAK CREDIT WHICH FORMS THE SUBJECT MATTER OF GROUND NO.1(C) 7. IN THE ABOVE VIEW OF THE MATTER, THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IS ADMITTED AND THE MATTER IS REMANDED TO THE FILE OF THE AO, TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, ON CONSI DERING THE ABOVE ITA NO.572(ASR)/2014 ASSESSMENT YEAR : 2008-09 5 ADDITIONAL EVIDENCE, BY AFFORDING DUE AND ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE, NO DOUBT, SH ALL CO-OPERATE IN THE FRESH PROCEEDINGS BEFORE THE AO. 8. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14TH DECEMBER, 2015. SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 14/12/2015 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:SH. CHANCHAL BASSI, JALANDHAR. 2. THE ITO, WARD-1(1), JALANDHAR. 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.