ITO, New Delhi V. Sh. Manish Thakur, Delhi

ITA 5751/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4746 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 24-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P GUPTA
• Keywords: Peak credit; Commercial expediency

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. K. N. CHARY , JM ITA NO. 5751/DEL/2014 : ASSTT. YEAR : 2010 - 11 INCOME TAX OFFICER, WARD - 29(2), NEW DELHI VS SH. M ANISH THAKUR, 1479, S.P. MUKHERJEE MARG, DELHI - 110006 (APPELLANT) (RESPONDENT) PAN NO. A BVPT2768C ASSESSEE BY : SH. SATYAJEET GOEL, CA & SH. R. S. SINGHVI, CA REVENUE BY : SH. S. P. GUPTA, S R. DR DATE OF HEARING : 13 .0 9 .201 7 DATE OF PRONOUNCE MENT : 13 .0 9 .201 7 ORDER PER N. K. SAINI, AM : THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 02.07.2014 OF LD. CIT(A ) - XXV , NEW DELHI . 2. FOLLOWING GR OUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 90,38,173/ - ON ACCOUNT OF CASH DEPOSIT IGNORING THE FACT THAT THE ASSESSES FAILED TO ESTABLISH THE SOURCE AND NAT URE OF THE DEPOSITS.' 2. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN APPLYING A RATE OF 15% ON THE GROSS RECEIPTS AND AT THE SAME TIME HE HAS NOT ITA NO . 5751 /DE L/2014 MANISH THAKUR 2 MADE ANY ADDITION ON ACCOUNT OF PEAK INVESTMENT.' 3. 'ON THE FACTS AND CIRCUMSTA NCES OF THE CASE THE LD. CIT(A) HAS ERRED IN APPLYING A RATE OF 15% ON THE CASH DEPOSITS WHEREAS HE SHOULD HAVE CONSIDERED ALL THE DEPOSITS WHETHER IN CASH OR OTHERWISE SINCE THE ASSESSEE HAD NOT DISCLOSED ANY OF THESE BANK ACCOUNTS.' 4. 'THE LD. APPELLAT E AUTHORITY HAD ERRED IN LIMITING THE ADDITION MADE BY THE AO TO RS. 13,55,726/ - IN CONTRADICTION TO HIS OWN CONCLUSION THAT THE RECEIPTS WERE NOT FROM BUSINESS AND WHERE RECEIPTS FROM UNDISCLOSED SOURCES.' 5. 'THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL.' 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT AN IDENTICAL ISSUE WAS ALSO IN VOLVED IN THE APPEAL OF THE ASSESSEE IN ITA NO.4668/DEL/2014 WHICH WAS FILED AGAINST THE SAME IMPUGNED ORDER OF THE LD. CIT(A) AND HAS BEEN DISPOSED OFF BY THIS BENCH OF THE TRIBUNAL VIDE ORDER DATED 26.07.2017. IT WAS FURTHER STATED THAT THIS ISSUE IS NOW SQUARELY COVERED VIDE AFORESAID REFERRED TO ORDER DATED 26.07.2017. ITA NO . 5751 /DE L/2014 MANISH THAKUR 3 4. IN HIS RIVAL SUBMISSION THE LD. DR COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 5. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL AVAILABLE ON RECORD, IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS WAS A SUBJECT MATTER OF THE ASSESSEE S APPEAL IN ITA NO. 4668/DEL/2014 WHEREIN THE ISSUE HAS BEEN DECIDED PARTLY IN FAVOUR OF THE ASSESSEE AND THE RELEVANT FINDINGS AR E GIVEN IN PARAS 3.4 TO 4 OF THE ORDER DATED 26.07.2017 WHICH READ AS UNDER: 3. 4 HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND MATERIAL AVAILABLE ON RECORD, WE FIND THAT THERE WAS NO DISPUTE ABOUT INCOME FROM THE FIRM. THE DISPUTE IS ABOUT C ASH DEPOSITS OF RS.90,38,173/ - , WHICH AS PER THE ASSESSEE IS RS.77,00,289/ - CLAIMED AS FROM BUSINESS OF THE ASSESSEE. THERE IS NO DISPUTE THAT ONUS LIES UPON THE CLAIMANT TO ESTABLISH THE GENUINENESS OF THE CLAIM. THE OBJECTION OF THE ASSESSING OFFICER REM AINED THAT THE ASSESSEE COULD NOT FURNISH EVIDENCE THAT THE CASH DEPOSITS IN QUESTION WERE MADE FROM BUSINESS AND THE ASSESSEE COULD NOT FILE BILLS AND VOUCHERS IN SUPPORT THEREOF. IN SUCH CIRCUMSTANCES THE ID. CIT (APPEALS) HAS PREFERRED TO ESTIMATE THE P ROFIT AT RS.13,55,726/ - BY APPLYING 15% ON THE GROSS RECEIPTS OF THE DEPOSITS RS,90,38,173/ - . THE REVENUE HAS NOT QUESTIONED THIS ACTION OF THE ID. CIT ( APPEALS) BEFORE THE TRIBUNAL. THE ASSESSEE HAS QUESTIONED THE ACTIO N OF THE ID. CIT (APPEALS) ITA NO . 5751 /DE L/2014 MANISH THAKUR 4 IN ESTIM ATING THE PROFIT BY APPLYING PROFIT RA TE OF 15% OF THE GROSS RECEIPT A ND SUSTAINING THE ADDITION OF RS.9,28,000/ - OVER AND ABOVE INCOME DECLARED AND SURRENDERED BY ASSESSEE. THE ID. AR HAS CONTENDED BEFORE THE TRIBUNAL THAT ASSESSEE WAS ALSO ENGAGED IN THE PROPRIETARY BUSINESS OF ICE CREAM SUCH AS ICE CREAM CUPS AND STR AWS AND OTHER RELATED ITEMS. THE SUPPLIES WERE MADE THROUGHOUT INDIA AND AS A MATTER OF BUSINESS AND COMMERCIAL EXPEDIENCY; TRADING ACTIVITIES WERE MAIN LY .THROUGH CASH ONLY. HE C ONTENDED THAT THE ESTIMATION OF INCOME BY THE ID. CIT (APPEALS) IS HIGHLY ARBITRARILY AND IN TOTAL DISREGARD TO THE DETAILS OF DEPOSIT AND WITHDRAWALS IN THE BANK ACCOUNT. EVEN ON THE BASIS OF PRINCIPLE OF PEAK CREDIT, TOTAL ADDITION WORKS OUT TO RS.3,63, 923/ - AND AS SUCH THERE IS NO BASIS TO COMPUTE THE INCOME AT RS.13,55,726/ - . 3.5 SO FAR AS ACTION OF THE ASSESSING OFFICER IS CONCERNED, WE ARE OF THE VIEW THAT ENTIRE CASH DEPOSITED IN THE BANK ACCOUNT CANNOT BE TREATED AS INCOME OF THE ASSESSES WITHOUT APPRECIATING THE NATURE OF TRANSACTIONS THROUGH BANK ACCOUNT. THERE IS NO DISPUTE THAT VARIOUS TRANSACTIONS REFLECTED IN BANK ACCOUNT AND CORRESPONDING WITHDRAWALS WERE PART OF THE BUSINESS ACTIVITIES, ESPECIALLY WHEN THE ASSESSING OFFICER HAS ACCEPTED THE INCOME FROM OTHER SOURCES TO THE EXTENT OF RS.64,500/ - MAINLY RELATED TO BUSINESS ACTIVITIES. THE ID. C1T (APPEALS) HAS ALSO NOT SHOWN ANY BASIS FOR ESTIMATION OF INCOME BY APPLYING PROFIT RATE OF 15% ON THE ENTIRE RECEIPTS IN THE SAVING BANK ACCOUNT. ITA NO . 5751 /DE L/2014 MANISH THAKUR 5 4. CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE PRESENT CASE DISCUSSED ABOVE, WE ARE OF THE VIEW THAT APPLICATION OF 7% OF THE GROSS RECEIPTS OF RS.90,38,173/ - , SUBJECT TO CORRECTION BY THE ASSESSING OFF ICER, AS TO WHETHER THE CORRECT FIGURE AS PER THE ASSESSEE IS RS.77,00,289/ - WILL BE REASONABLE TO WORK OUT THE PROFIT OF THE ASSESSEE, WHICH WOULD BE INCLUSIVE OF THE AMOUNT OF RS.63,803/ - RETURNED IN THE RETURN OF INCOME AND RS.3,63,923/ - SURRENDERED BEFORE THE ASSESSING OFFICER. THE GROUNDS ARE THUS PARTLY ALLOWED. 6. SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER DATED 26.07.2017 IN ITA NO. 4668/DEL/2014 IN ASSESSEE S OWN CASE, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 7 . IN THE RESULT, THE APPEAL OF THE DEPARTMEN T IS DISMISSED. ( ORDER PRON OUNCED IN THE COURT ON 13 /0 9 / 2017 ) SD/ - SD/ - (K. N. CHARY ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13 /09 /2017 *SUBODH* COPY FORWARDED TO: 1 . A PPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR