Shri Rajnikant Ranchhodbhai Patel, Ahmedabad V. The Income Tax Officer, Patan Ward-4, Mehsana

ITA 58/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6093 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 07-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ADITYA SHUKLA
• Assessee Lawyers: S V AGRAWAL
• Keywords: Peak credit
• Section: 142(1); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORESHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO. 58/AHD/2016 / ASSESSMENT YEAR: 2006-07 RAJNIKANT RANCHHODBHAI PATEL, VILLAGE-GHUMASAN, TAL. KADI, DIST- MEHSANA, PAN : AIQPP 8274 K VS. THE INCOME-TAX OFFICER, PATAN WARD-4 MEHSANA / (APPELLANT) / (RESPONDENT) ASSESSEE BY : S V AGRAWAL, AR REVENUE BY : ADITYA SHUKLA, SR DR / DATE OF HEARING : 14/02/2018 / DATE OF PRONOUNCEMENT: 20/02/2018 / O R D E R THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A), GANDHINAGA R, AHMEDABAD DATED 16.11.2015 PASSED FOR ASSESSMENT YEAR 2006-07. 2. IN GROUND NO.1, THE ASSESSEE HAS PLEADED THAT NO TICES ISSUED UNDER SECTION 148, 142(1) AND 131 OF THE INCOME-TAX ACT W ERE NOT SERVED UPON THE ASSESSEE; HENCE THE ASSESSMENT ORDER IS VOID. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HIS RETURN OF INCOME ON 18.07.2007 DECLARING TOTAL INCOME AT RS.5 0,400/-. THE ASSESSING OFFICER GOT AN INFORMATION FROM AIR/CIB WING EXHIBI TING THE FACT THAT THE ASSESSEE HAS DEPOSITED A SUM OF RS.17,05,00/- IN CA SH IN A BANK ACCOUNT. HE RECORDED THE REASONS AND ISSUED NOTICE UNDER SECTIO N 148 BY RPAD ON 26.03.2013. NO ONE HAS APPEARED ON BEHALF OF THE A SSESSEE. THEREAFTER, HE ISSUED NOTICE UNDER SECTION 142(1) AND SUMMONS UNDE R SECTION 131(1) WHICH WERE REMAINED UNCOMPLIED WITH. THE CASE OF T HE ASSESSEE IS THAT HE SMC-ITA NO. 58/AHD/2016 RAJNIKANT RANCHHODBHAI PATEL VS. ITO FOR AY: 2006-07 2 WAS OUT OF INDIA FOR TWO YEARS AND HIS HOUSE WAS LO CKED; THEREFORE, NOTICE WAS NOT SERVED UPON HIM. TO MY MIND, THIS IS NOT A JUSTIFICATION TO TERM THE ASSESSMENT ORDER AS ILLEGAL. THE ASSESSING OFFICER HAS PROCEEDED IN ACCORDANCE WITH LAW AND SERVED NOTICE ON THE LAST K NOWN ADDRESS OF THE ASSESSEE. IT WAS FOR THE ASSESSEE TO COMMUNICATE T HE LATEST ADDRESS TO THE ASSESSING OFFICER OR THE PERSON TO WHOM THE ASSESSI NG OFFICER COULD ISSUE THE NOTICE. THE ASSESSEE FAILED TO DO SO. HENCE, THERE IS NO ILLEGALITY IN TAKING THE PROCEEDINGS UNDER SECTION 144 OF THE ACT AND PASSING THE ASSESSMENT ORDER ACCORDING TO THE BEST JUDGMENT OF THE ASSESSING OFFICER. I, THEREFORE, DO NOT FIND ANY MERIT IN THE FIRST GROUN D OF APPEAL. 4. IN THE NEXT GROUND OF APPEAL, THE GRIEVANCE OF T HE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.17,05,500/- U/S 68 OF THE ACT. 5. THE BRIEF FACTS OF THE CASE ARE THAT IN THE DENA BANK ACCOUNT OF ASSESSEE A SUM OF RS.17,05,500/- WAS FOUND TO BE DE POSITED IN CASH DURING THE YEAR. THE ASSESSEE DID NOT GIVE ANY REPLY TO T HE ASSESSING OFFICER; HENCE, HE TREATED THE SAME AS UNEXPLAINED INVESTMEN T AND MADE THE ADDITION. ON APPEAL, THE ASSESSEE CONTENDED THAT H E HAS AN AXIS BANK ACCOUNT WHICH WAS USED FOR THE PURPOSE OF BUSINESS. THE AMOUNTS HAVE BEEN WITHDRAWN FROM AXIS BANK ACCOUNT AND DEPOSITED IN DENA BANK ACCOUNT. A COMBINED PEAK CREDIT WORKING OF AXIS BA NK AND DENA BANK ACCOUNTS WAS SUBMITTED BEFORE THE LEARNED CIT(A). LEARNED CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER WHIC H HAS BEEN PLACED ON RECORD AT PAGE NOS. 33 TO 35 OF THE PAPER-BOOK. LE ARNED ASSESSING OFFICER, TO SOME EXTENT, WAS SATISFIED THAT, ON COMPARISON W ITH THE WITHDRAWAL AND DEPOSITS, IT IS DISCERNIBLE THAT SOME OF THE AMOUNT S CAN BE HELD AS SMC-ITA NO. 58/AHD/2016 RAJNIKANT RANCHHODBHAI PATEL VS. ITO FOR AY: 2006-07 3 RECONCILED. ON THE STRENGTH OF THIS REMAND REPORT, LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT PEAK CREDIT AVAILABLE IN TH IS ACCOUNT BE ADDED AS UNEXPLAINED INCOME OF THE ASSESSEE. SOMEHOW, LEARNE D CIT(A) DID NOT ACCEPT THIS CONTENTION AND CONFIRMED THE ADDITION. 6. LEARNED COUNSEL FOR THE ASSESSEE REITERATED HIS STAND BEFORE ME. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES AND SUBMITTED THAT PEAK BALANCE AVAILABLE IN ANY ACCOUNT COULD BE CONSIDERED AS INCOME OF THE AS SESSEE IF IT IS DEMONSTRATED THAT SUCH ACCOUNT WAS FOR THE PURPOSE OF BUSINESS VIZ. IF AN ASSESSEE IS ENGAGED IN TRADING, HE DEPOSITS THE SAL E PROCEEDS IN THAT ACCOUNT AND ALSO WITHDREW THE AMOUNTS FOR MAKING PURCHASES; THEN, THE PEAK CAN BE CALCULATED. THE ASSESSEE FAILED TO DEMONSTRATE THIS FACT. 7. I HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. ON PAGE NO.22, THE ASSESSEE HAS PLACED ON RECORD TYPED COPY OF AXIS BANK ACCOUNT STATEMENT. HE POINTED OUT THAT OUT OF THIS BANK, WITHDRAWALS WERE MADE AND THESE WERE DEPOSITED IN D ENA BANK ACCOUNT. A PERUSAL OF THESE ACCOUNTS WOULD INDICATE THAT THE A MOUNTS WERE FLOWING FROM WELL FOUND ASSOCIATES AND ZN ATPAROUT SOURCES. THESE SOURCES HAVE PAID THE MONEY TO THE ASSESSEE WHICH WAS DEPOSITED. THE CONTENTION OF THE ASSESSEE COULD BE ACCEPTED IF IT IS ESTABLISHED THA T HE HAS CARRIED OUT SOME WORK FOR THESE FIRMS/SOURCES AND THEY HAVE PAID MON EY TO THE ASSESSEE. THIS MONEY WAS DEPOSITED IN AXIS BANK ACCOUNT AND T HEN IT WAS WITHDRAWN FOR RE-DEPOSITING IT IN DENA BANK ACCOUNT. SINCE I T WAS AN EX-PARTE ASSESSMENT ORDER, THE INVESTIGATION COULD NOT BE MA DE IN THIS REGARD. THEREFORE, I DEEM IT PROPER TO SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION OF THE ISSUE. THE ASSE SSEE WILL BE AT LIBERTY TO SMC-ITA NO. 58/AHD/2016 RAJNIKANT RANCHHODBHAI PATEL VS. ITO FOR AY: 2006-07 4 SUBMIT ANY DETAILS IN SUPPORT OF HIS EXPLANATION. THE OBSERVATIONS MADE BY ME WILL NOT IMPAIR OR INJURE THE CASE OF THE ASSESS ING OFFICER AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENSE OR EXPLANATIONS OF THE ASSESSEE. LEARNED ASSESSING OFFICER SHALL DECIDE THE ISSUE IN ACCORDA NCE WITH THE LAW. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 20 TH FEBRUARY, 2018 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 20/02/2018 BIJU T., SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) %, / ITAT, AHMEDABAD 1. DATE OF DICTATION- 15.02.2018 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 15.02.2018 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 20.02.2018. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT..20.02.2018 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK20.0 2.2018 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER