The ITO, Ward-9(4), Ahmedabad V. Shri Bhavesh Bharatbhai Mehta, Ahmedabad

ITA 59/AHD/2013

• Counselvise Citation: 5920514 RSA 2013
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-07-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 07-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: S N DIVATIA
• Keywords: Peak credit; Revised return

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD . , ! ' ' ' ' # $%, ! BEFORE SHRI A.MOHAN ALANKAMONY,ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A. NO.59/AHD/2013 AY 2006-07 2. ./ I.T.A. NO.106/AHD/2013 AY 2009-10 THE INCOME TAX OFFICER WARD-9(4) AHMEDABAD / VS. SHRI BHAVESH BHARATBHAI MEHTA 102-H, KANAK KALA APARTMENT-IOI OPP.RAHUL TOWER 100FT.RING ROAD SATELLITE, AHMEDABAD !' ./() ./ PAN/GIR NO. :AGEPB 1835 G ( '* / // / APPELLANT ) .. ( +,'* / RESPONDENT ) '* - / APPELLANT BY : SHRI O.P. BATHEJA, SR.D.R. +,'* . - / RESPONDENT BY : SHRI S.N. DIVATIA, A.R. #'/ . %0 / / / / DATE OF HEARING : 31/07/2013 12 . %0 / DATE OF PRONOUNCEMENT : 14/08/2013 3 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THESE TWO APPEALS BY THE REVENUE IN THE CASE OF S AME ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE LD. CIT(A)-XV, AHMEDABAD [CIT(A) FOR SHORT] DATED 29/10/2012 & 30/10/2012 RESPECTIVELY FOR AYS 2006-07 & 2009-10. 2. SINCE THE APPEALS ARE AGAINST THE SAME ASSESSEE AND THE GROUNDS RAISED ARE IDENTICAL IN BOTH THE APPEALS, THEREFORE BOTH WERE HEARD ITA NOS.59 & 106 / AHD/2013 ITO VS. SHRI BHAVESH BHARATBHAI MEHTA ASST.YEARS 2006-07 & 2009-10 - 2 - TOGETHER AND ARE BEING DISPOSED OF BY A CONSOLIDATE D ORDER FOR THE SAKE OF CONVENIENCE. 3. FIRST, WE TAKE UP THE REVENUES APPEAL, I.E. ITA NO.59/AHD/2013 PERTAINING TO ASST.YEAR 2006-07. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1) THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.11,96,797/- OUT OF TOTAL ADDITION OF RS.13,22,786/- MADE ON ACCOUNT OF UNDISCLOSED INCOM E. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSIN G OFFICER BE RESTORED. 2. BRIEFLY STATED FACTS ARE THAT THE CASE WAS REOP ENED U/S.148 AND THE ASSESSMENT WAS CONCLUDED U/S.143(3) R.W.S.147 OF TH E ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT). THE ASSES SING OFFICER WHILE FRAMING THE ASSESSMENT U/S.143(3) R.W.S.147 OF THE ACT HAD MADE ADDITION OF RS.13,22,786/- ON ACCOUNT OF THE PEAK BALANCE AP PEARING IN THE UNDISCLOSED BANK ACCOUNT FOR THE F.Y. 2005-06 RELEV ANT TO A.Y. 2006-07 AND ALSO MADE ADDITION OF RS.52,408/- ON ACCOUNT OF INTEREST RECEIVED FROM THE UNDISCLOSED BANK ACCOUNT. THE ASSESSEE AG GRIEVED BY THIS ORDER, FILED AN APPEAL BEFORE THE CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CONFIRMED THE ACTION O F THE AO TO THE EXTENT OF TAKING OF THE PEAK CREDIT BALANCE, BUT ALLOWED T HE ALTERNATIVE RELIEF ITA NOS.59 & 106 / AHD/2013 ITO VS. SHRI BHAVESH BHARATBHAI MEHTA ASST.YEARS 2006-07 & 2009-10 - 3 - CLAIMED BY THE ASSESSEE IN RESPECT OF INCREMENTAL P EAK. NOW, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. LD.SR.DR STRONGLY SUPPORTED THE ORDER OF THE AO. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A) AND ALSO RELIED ON THE DECISION OF HONBLE HIGH COU RT OF GUJARAT RENDERED IN THE CASE OF CIT VS. ASHIT S.SHAH IN TAX APPEAL NO.2436 OF 2009,DATED 02/08/2011. LD.COUNSEL FOR THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE CO-ORDINATE BENCH AHMEDA BAD RENDERED IN THE CASE OF ITO VS. SHRI MANUBHAI NARAYANBHAI PATEL IN ITA NO.2161/AHD/2012 FOR AY 2008-09, DATED 12/04/2013. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY GRIEVANCE OF THE REVENUE IS IN ADOPTING TH E INCREMENTAL PEAK BY THE LD.CIT(A). WE FIND THAT LD.CIT(A) HAS ALLOW ED THE ALTERNATIVE GROUND TAKEN BY THE ASSESSEE THAT THE ADDITION TOWA RDS PEAK CREDIT SHOULD HAVE BEEN RESTRICTED TO THE INCREMENTAL AMOUNT FOR THE YEAR BY EXCLUDING THE PEAK CREDIT FOR THE EARLIER YEAR. THE LD.C IT(A) IN PARA-5.3 HAS DECIDED THIS ISSUE AS UNDER:- 5.3. THERE IS NO GROUND NO.3 MAY BE BECAUSE OF TYP OGRAPHICAL ERROR IN THE GROUNDS OF APPEAL SUBMITTED BY APPELLA NT. IN REFERENCE TO GROUND NO.4 BEING 4.1, THE APPELLANT C ONTENDED AN ALTERNATIVE GROUND (WITHOUT PREJUDICE) THAT THE ADD ITION TOWARDS PEAK CREDIT SHOULD HAVE BEEN RESTRICTED TO THE INCR EMENTAL AMOUNT FOR THE YEAR BY EXCLUDING THE PEAK CREDIT FOR THE E ARLIER YEAR. I AM INCLINED TO ACCEPT THE CONTENTION OF THE APPELLANT BECAUSE AS PER REAL INCOME THEORY THE WORKING OF PEAK FOR A PERI OD MORE THAN A YEAR HAS TO BE ON THE BASIS OF INCREMENTAL PEAK. T HE LEGAL ITA NOS.59 & 106 / AHD/2013 ITO VS. SHRI BHAVESH BHARATBHAI MEHTA ASST.YEARS 2006-07 & 2009-10 - 4 - PROPOSITION FOR CONSIDERATION OF INCREMENTAL PEAK I S SUPPORTED BY CASE LAWS RELIED ON BY APPELLANT. IN FACT, THE ORD ER DATED 29.4.2011 OF HONBLE ITAT AHMEDABAD B BENCH IN TH E CASE OF ITO WD.5(3) VS. SHRI PRAMOD T.JARIWALA (ITA NO.2425 /AHD/2009) AFFIRMS THE ACTION OF TAKING PEAK AS INCOME. HONB LE GUJARAT HIGH COURT IN THE CASE OF CIT-1 V. ASHIT S.SHAH (TAX AP PEAL NO.2436 OF 2009) IN THEIR JUDGEMENT DATED 02.08.2011 IN REFERE NCE TO WORKING OF PEAK UPHELD INCREMENTAL WORKING OF PEAK. AS DI SCUSSED IN EARLIER PARA THAT WORKING OF PEAK CREDIT IS GIVEN B Y APPELLANT AND ATTACHED WITH THIS APPEAL ORDER AS ANNEXURE-A, IT I S OBSERVED FROM THE SAME WORKING THAT APPELLANT HAS NOT CONSIDERED THE OPENING BALANCE OF THE BANK ACCOUNT AS ON 01.04.2005. THE APPELLANT HAS ONLY TAKEN CASH DEPOSITED IN THE BANK ACCOUNT AND C ASH WITHDRAWAL DURING THE PREVIOUS YEAR. THE APPELLANT HAS NOT SUBMITTED ANY WORKING OF INCREMENTAL PEAK WORKING. I HAVE ALREADY HOLD THAT OF PEAK OF RS.13,22,786 FOR THE P REVIOUS YEAR IS VERIFIABLE AND CORRECT. IT IS ALSO VERIFIED THAT A PPELLANT HAS SATISFACTORILY EXPLAINED THE OTHER ENTRIES IN THIS ACCOUNT RELATED TO AUTO SWEEP AND REVERSE SWEEP AND CHEQUE ISSUED TO RELATIVE AND FRIENDS. IT IS ALSO VERIFIABLE THAT THESE TRA NSACTIONS DO NOT AFFECT THE WORKING OF PEAK AS GIVEN BY THE APPELLAN T. NOW FOR INCREMENTAL PEAK, IN THE CASE OF APPELLANT FOR PREVIOUS YEAR RELEVANT TO A.Y. 2004-05 THE A.O. HAS TAKEN PE AK OF RS.4,98,281 FROM THIS BANK ACCOUNT AND ADDED THE SA ME IN TOTAL INCOME. I HAVE CONFIRMED THE ADDITION OF SUCH PEAK CREDIT ADDITION U/S.69 OF THE ACT IN THE APPEAL ORDER FOR A.Y. 2004 -05. IN THE SUBSEQUENT YEAR I.E. PREVIOUS YEAR RELEVANT TO A.Y. 2005-06, THE A.O. MADE ADDITION OF PEAK OF RS.19,07,026. I HAVE RESTRICTED THE SAME TO RS.14,26,245 IN MY APPEAL ORDER FOR A.Y.200 5-06 AFTER CONSIDERING THE INCREMENTAL PEAK AND GIVING THE CRE DIT OF RS.4,98,281 BEING INCOME OF APPELLANT FOR A.Y.2004- 05. IT IS THEREFORE FOR INCREMENTAL PEAK RELATED TO PREVIOUS YEAR RELEVANT TO A.Y. 2006-07, CREDIT OF RS.19,24,526 (4,98,281 + 14 ,26,245) IS REQUIRED TO BE GIVEN. CONSIDERING THIS ASPECT, THE RE WILL BE NO ADDITION ON ACCOUNT OF PEAK OF RS.13,22,786 DURING PREVIOUS YEAR SINCE THE INCREMENTAL PEAK IT WORKED OUT AFTER CONS IDERING RS.19,24,526 THEN THE PEAK IS LESS THAN THIS AMOUNT AND SAME INCOME CANNOT BE TAXED TWICE. THE A.O. IS THEREFOR E DIRECTED TO ITA NOS.59 & 106 / AHD/2013 ITO VS. SHRI BHAVESH BHARATBHAI MEHTA ASST.YEARS 2006-07 & 2009-10 - 5 - DELETE THE ADDITION OF RS.11,96,797 (13,22,786 1, 25,989) SINCE APPELLANT HIMSELF OFFERED THE INCOME OF RS.1,25,989 IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S.148 OF TH E ACT. AS PER HONBLE SUPREME COURT JUDGEMENT IN THE CASE OF GOET ZE (INDIA) LTD. V.CIT (2006) 157 TAXMAN 1 (SC), THE HONBLE SU PREME COURT HELD THAT ASSESSING AUTHORITY HAS NO POWER TO ENTE RTAIN A CLAIM MADE BY ASSESSEE AFTER FILING OF ORIGINAL RETURN OT HERWISE THAN BY FILING OF REVISED RETURN. IT IS THEREFORE, A.O. I S DIRECTED TO DELETE THE ADDITION PART OF RS.11,96,797. THE APPELLANT G ETS RELIEF ACCORDINGLY. THIS GROUND IS PARTLY ALLOWED. 4.1. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE REASONING GIVEN BY THE LD.CIT(A). WE FIND THAT THERE IS NO INFIRMI TY IN THE REASONING ADOPTED BY THE LD.CIT(A). HE HAS RIGHTLY ADOPTED T HE INCREMENTAL PEAK. IT IS SETTLED PROPOSITION OF LAW THAT THE ASSESSEE CANNOT BE TAXED TWICE FOR THE SAME AMOUNT. IN THE LIGHT OF THE DECISION OF H ONBLE GUJARAT HIGH COURT RELIED UPON BY THE LD.COUNSEL FOR THE ASSESS EE IN THE CASE OF CIT VS. ASHIT SHAH IN TAX APPEAL NO.2436/AHD/2009(SUPR A) AND ALSO THE DECISION OF ITAT C BENCH AHMEDABAD RENDERED IN T HE CASE OF ITO VS. SHRI MANUBHAI NARAYANBHAI PATEL IN ITA NO.2161/AHD/ 2012(SUPRA), WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CI T(A), THE SAME IS HEREBY UPHELD. THEREFORE, GROUND RAISED BY THE REVENUE IS DISMISSED. 5. IN THE RESULT, REVENUES APPEAL FOR AY 2006-07 I S DISMISSED. 6. NOW, WE TAKE UP THE REVENUES APPEAL, I.E. ITA N O.106/AHD/2013 FOR AY 2009-10. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1) THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ITA NOS.59 & 106 / AHD/2013 ITO VS. SHRI BHAVESH BHARATBHAI MEHTA ASST.YEARS 2006-07 & 2009-10 - 6 - ADDITION OF RS.11,59,318/- OUT OF TOTAL ADDITION OF RS.12,20,366/- MADE ON ACCOUNT OF UNDISCLOSED INCOM E. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDAB AD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 3) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD.CO MMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6.1. GROUNDS RAISED BY THE REVENUE IN THIS APPEAL A RE ALSO SIMILAR AS WERE IN REVENUES APPEAL FOR AY 2006-07(SUPRA) EXCE PT CHANGE IN FIGURES. SINCE NO CHANGE IN THE FACTS AND CIRCUMST ANCES ARE POINTED OUT BY THE LD.SR.DR, THEREFORE TAKING OUR CONSISTENT VI EW TAKEN IN REVENUES APPEAL IN ASSESSEES OWN CASE FOR AY 2006-07 IN ITA NO.59/AHD/2013(SUPRA), FOR THIS YEAR ALSO THIS GROUND OF THE REVENUE IS DI SMISSED. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE SD/- SD/- (. ) (# $%) ! ! ( A. MOHAN ALANKAMONY ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 14/ 08 /2013 60.., '.../ T.C. NAIR, SR. PS ITA NOS.59 & 106 / AHD/2013 ITO VS. SHRI BHAVESH BHARATBHAI MEHTA ASST.YEARS 2006-07 & 2009-10 - 7 - 3 . +%7 872% 3 . +%7 872% 3 . +%7 872% 3 . +%7 872%/ COPY OF THE ORDER FORWARDED TO : 1. '* / THE APPELLANT 2. +,'* / THE RESPONDENT. 3. % #9 / CONCERNED CIT 4. #9() / THE CIT(A)-XV, AHMEDABAD 5. 7'$: +% , , / DR, ITAT, AHMEDABAD 6. :;< =/ / GUARD FILE. 3# 3# 3# 3# / BY ORDER, ,7% +% //TRUE COPY// > >> >/ // / ( ( ( ( ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 5.8.13 (DICTATION-PAD 8 PAG ES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 6.8.13 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.14.8.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14.8.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER