SHRI KARAN KUMAR BHATIA, Indore V. THE ITO 5(1), Indore

ITA 595/IND/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99112 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 04-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: GIRISH AGRAWAL
• Keywords: Unexplained investment; Business income; Peak credit

Judgement Text

KARAN KUMAR BHATIA ITA 595 OF 2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO. 595/IND/2015 A.Y. 2008-09 KARAN KUMAR BHATIA, INDORE PAN AOGPB 3119 K :: APPELLANT VS ITO-5(1), INDORE :: RESPONDENT ASSESSEE BY SHRI GIRISH AGRAWAL RESPONDENT BY SHRI R.A. VERMA, DR DATE OF HEARING 09.12.2015 DATE OF PRONOUNCEMENT 09.12.2015 O R D E R THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING T HE ORDER OF LD. CIT(A)- II, INDORE, DATED 30.4.2015. 2. THE SUM & SUBSTANCES OF THE GROUNDS OF APPEAL IS THAT LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS.2,03,971/- O N ACCOUNT OF PEAK CREDIT AMOUNT IN RETAIL CLOTH BUSINESS. FACTS, IN BRIEF, A RE THAT THE ASSESSEE IS DERIVING INCOME FROM RETAIL CLOTH BUSINESS, SALARY AND OTHER SOURCES. THE ASSESSEE FILED THE RETURN DECLARING THE INCOME AT R S.78,340/-. THE AO NOTED THAT ASSESSEE DERIVES INCOME FROM RETAIL TRADING AN D DO NOT MAINTAIN BOOKS OF ACCOUNT. THE ASSESSEE DEPOSITED RS.11,36,000/- IN THE BANK ACCOUNT IN KOTAK MAHINDRA BANK. THE ASSESSEE WAS ASKED TO FURN ISH RELEVANT DETAILS TO VERIFY THE SOURCE AND AVAILABILITY OF CASH/FUND ON THE DATE OF TRANSACTION KARAN KUMAR BHATIA ITA 595 OF 2015 2 ENTERED INTO. THE ASSESSEE FILED THE REQUIRED DETAI LS BUT DENIED TO HAVE MAINTAINED CAPITAL ACCOUNT AND BALANCE-SHEET FOR TH E PREVIOUS YEAR. FURTHER, THE AO NOTED THAT THE ASSESSEE OFFERED THE PEAK OF THE BANK TRANSACTION AS THE UNEXPLAINED INVESTMENT AND CALCULATED THE PROFI T AT THE RATE OF 5% ON THE TOTAL TRANSACTION. THEREAFTER, THE AO DETERMINED TH E PEAK OF THE AMOUNT AT RS.2,69,317/- AS UNEXPLAINED INVESTMENT WHICH IS BA LANCE AS ON 26.7.2007. THE PROFIT ON THE BUSINESS @5% WAS DETERMINED AT RS .75,000/- ON THE TURNOVER OF RS.15 LACS. HOWEVER, LD. CIT(A), AFTER TAKING INTO CONSIDERATION OF SUBMISSIONS AND REMAND REPORT, RESTRICTED THE ADDIT ION TO RS.2,03,971/-. STILL AGGRIEVED, THE ASSESSEE IS BEFORE ME. 3 BEFORE ME, LEARNED COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSION MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT TH E CASH DEPOSIT DURING THE YEAR UNDER CONSIDERATION RELATES TO HIS RETAIL TRAD E BUSINESS FOR WHICH INCOME U/S 44AF OF RS.75,000/- WAS OFFERED. THE ASSESSEE A LSO OFFERED PEAK CREDIT OF RS.56,171/- OF THE BANK ACCOUNT AFTER AVAILING TELE SCOPING OF CERTAIN AMOUNTS. THEREFORE, THE ADDITION ON ACCOUNT OF PEAK CREDIT F OR DEPOSITS IN THE BANK ACCOUNT SHOULD BE RESTRICTED RS. AT RS.56,171/-. TH US, ONCE THE AO HAS ACCEPTED THE BUSINESS INCOME OFFERED BY APPLYING TH E PROVISIONS OF SECTION 44AF, NO FURTHER ADDITION IS CALLED FOR. ON THE OTH ER HAND, LD. DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 4 I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. I FIND THAT LD. REVENUE AUTHORITIES WERE PA RTLY RIGHT IN MAKING/SUSTAINING ADDITION BUT LOOKING TO THE NATUR E OF THE BUSINESS OF THE KARAN KUMAR BHATIA ITA 595 OF 2015 3 ASSESSEE, FAILED TO NOTE THE FACT FROM THE BANK ACC OUNT (PAGE NO.9 OF THE PAPER BOOK) THAT THE ASSESSEE HAS OPENING BALANCE A S ON 1.4.2007 AT RS.13,414/- AND ON 3.4.2007 & 7.4.2007, HE DEPOSITE D RS.48,000/- & RS.10,000/-, RESPECTIVELY, WHICH SHOULD HAVE BEEN T AKEN AS THE CAPITAL AVAILABLE FROM BUSINESS TRANSACTION FROM EARLIER YE ARS. THEREFORE, IN VIEW OF THE TOTALITY OF THE FACTS/CIRCUMSTANCES AS NARRATED ABOVE AND TO CUT SHORT THE MATTER, I AM OF THE VIEW THAT AMOUNTS AT RS.13,414+ RS.48,000+RS.10,000 ARE EXPLAINED. THEREFORE, THE TOTAL OF THE SAME I.E RS. 71,414/- IS DIRECTED TO BE DELETED. REMAINING ADDITION IS SUSTAINED. 5. IN THE RESULT, THE APPEAL IS ALLOWED PARTLY. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 09.12.201 5. SD/- (B.C. MEENA) ACCOUNTANT MEMBER DATED : 09.12.2015 !VYS! COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR, INDORE