ITO, New Delhi V. Shri Anil Suri, New Delhi

ITA 5969/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9597 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 23-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KAPOOR
• Assessee Lawyers: NEEKANTH KHANDELWAL
• Keywords: Peak credit
• Section: 143(3); 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: A: NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT ME MBER ITA NO:- 5969/DEL/2016 (ASSESSMENT YEAR: 2011-12) INCOME TAX OFFICER, WARD - 30(5), NEW DELHI VS SH. ANIL SURI, E - 17, KALKAJI, NEW DELHI PAN-AWSPS9197C APPELLANT RESPONDENT APPELLANT BY SHRI. SANJAY KAPOOR , SR. DR RESPONDENT BY SHRI. NEEKANTH KHANDELWAL, ADV ORDER PER ANADEE NATH MISSHRA, AM [A]. THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE ORDER DATED 30.08.2016 PASSED BY LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-10, NEW DELHI [IN SHORT, LD.CIT(A)] PERTAINING TO ASSESSMENT YEAR 2011-12. IN THIS APPEAL, THE TAX E FFECT IS LESS THAN THE MONETARY LIMIT FIXED BY THE CENTRAL BOARD OF DI RECT TAXES (IN SHORT CBDT) IN ITS CIRCULAR NO.17/2009 DATED 08.0 8.2019. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN ALLOWING THE RELIEF OF RS.77,15,236/- TO T HE ASSESSEE OUT OF ADDITION OF RS.1,03,35,000/- MADE U/S 69 A OF THE I T ACT BY APPLYING PEAK CREDIT THEORY AND HAS ALLOWED RS.26,19,764/- AS INC OME FROM BUSINESS ACTIVITY, WHICH WAS A MAXIMUM AMOUNT AVAILABLE ON A PARTICULAR DATE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ITA NO: - 5213/DEL/2014 PAGE | 2 ERRED IN RELYING UPON THE ASSESSMENT MADE BY THE AO IN THE ASSESSEE'S OWN CASE FOR A.Y. 2010-11 & 2013-14, WHEREIN WHILE COMPLETING THE ASSESSMENT U/S 143(3), AO GAVE THE ASSESSEE BENEFIT OF PEAK CREDIT. HOWEVER, THE PEAK CREDIT AS APPLIED BY THE LD. CIT( A) IS NOT APPLICABLE IN THE INSTANT CASE AS PEAK CREDIT IS NECESSARILY BASE D ON THE PRESUMPTION THAT THE ASSESSEE IS IN A CONTINUOUS PROCESS OF DEP OSITING AND WITHDRAWING SAME MONEY INTO BANK ACCOUNTS AND HENCE THE SOURCE OF SOME OF THE MONEY DEPOSITED IN THE BANK CAN BE EXPLAINED FROM T HE WITHDRAWALS. IN ESSENCE, TAKING THE PEAK CREDIT MEANS GIVING BENEFI T OF CASH WITHDRAWALS (AFTER REMOVING PERSONAL CONSUMPTION). IN THE INSTA NT CASE, THE ASSESSEE HAD DEPOSITED CASH IN THE BANK AMOUNTING TO RS.1,03 ,35,000/- AND HAD WITHDRAWN RS.15,41,950/- ONLY. THEREFORE, THE AMOUN T OF PEAK CREDIT WORKED OUT BY LD. CIT(A) IS ERRONEOUS IN SO FAR AS IT GIVES BENEFIT IN EXCESS OF THE CASH WITHDRAWALS. 3. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAD CLAIMED EXPENSES TO THE TUNE OF RS.1,52,763/- OUT OF THE GROSS INCOME OF RS .5,46,704/-, WHICH HAS ALSO NOT BEEN CONSIDERED WHILE ARRIVING AT THE PEAK CREDIT. IN VIEW OF THE ABOVE, THE OBSERVATION OF THE LD. CIT(A) THAT WHILE PASSING ORDER U/S 143(3) IN ASSESSEE'S OWN CASE FOR AY 2010-11 & 2012-13, TH E AO HAD ALLOWED THE BENEFIT OF PEAK CREDIT HAS GOT NO FORCE AND HENCE N OT JUSTIFIED. FURTHER, THE APEX COURT IN VARIOUS DECISION HAS HELD THAT THE PR INCIPLE OF RES-JUDICATA IS NOT APPLICABLE IN TAX MATTERS AS EACH ASSESSMENT YE AR IS SEPARATE AND FINAL ONLY FOR THAT YEAR. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACTS THAT THE ASSESSEE HA D CLAIMED THAT THE CASH CREDIT WERE CASH RECEIVED AGAINST AGREEMENT TO SELL THE PROPERTY, HOWEVER, THE AGREEMENT CANNOT BE TREATED AS GENUINE AS THE S ALE AGREEMENT IS ON A PLAIN STAMP PAPER WHICH IS NOT EVEN ATTESTED. FURTH ER, AS PER AMENDED SECTION 269SS OF THE ACT, THE CASH RECEIVED DURING NEGOTIATIONS FOR TRANSFER OF IMMOVABLE PROPERTY ATTRACTS 100% PENALTY U/S 271 D OF THE ACT. THOUGH, THIS NEW AMENDMENT IS NOT APPLICABLE IN THE RELEVAN T YEAR, IT CONVEYS THE INTENTION OF THE LEGISLATURE. [B]. AT THE OUTSET, IT WAS BROUGHT TO THE NOTICE B Y LEARNED COUNSEL FOR THE ASSESSEE, AT THE TIME OF HEARING THAT TAX E FFECT IN THIS APPEAL IS BELOW RS. 50,00,000./-. VIDE RECENT CBDT CIRCULA R NO.17/2019 DATED 08.08.2019 READ WITH EARLIER CBDT CIRCULAR NO . 3 OF 2018, DATED 11.07.2018, MINIMUM THRESHOLD LIMIT OF TAX EF FECT OF FILING OF APPEALS BY REVENUE IN INCOME TAX APPELLATE TRIBUNAL ('ITAT', FOR SHORT) HAS BEEN ENHANCED TO RS. 50,00,000/-. IN A S UBSEQUENT ITA NO: - 5213/DEL/2014 PAGE | 3 CLARIFICATION ISSUED BY CBDT VIDE F.NO. 279/MISC/M- 93/2018-ITJ, DATED 20/08/2019, IT HAS BEEN CLARIFIED BY CBDT THA T THE AFORESAID REVISED MONETARY LIMIT IS ALSO APPLICABLE TO ALL PE NDING APPEALS IN ITAT. THEREFORE, IN VIEW OF THE FOREGOING, WE ARE O F THE VIEW THAT THIS APPEAL FILED BY REVENUE IS NOT MAINTAINABLE. THE LE ARNED DEPARTMENTAL REPRESENTATIVE ALSO DID NOT PRESS THE APPEAL. ACCORDINGLY, THIS APPEAL IS DISMISSED BEING NOT PRE SSED, AND ALSO NOT MAINTAINABLE, HAVING REGARD TO AFORESAID CBDT C IRCULAR NO. 17/2019 DATED 08.08.2019 READ WITH AFORESAID CBDT C IRCULAR NO. 3 OF 2018 IN THE LIGHT OF AFORESAID CLARIFICATION D ATED 20/08/2019. [C]. BEFORE LEAVING, WE CLARIFY THAT REVENUE WILL B E AT LIBERTY TO APPROACH INCOME TAX APPELLATE TRIBUNAL U/S 254(2) O F INCOME TAX ACT, 1961 SEEKING RECALL OF THIS ORDER AND, FOR RESTORATION OF THE APPEAL IF IT IS FOUND THAT THIS APPEAL OF REVENUE IS NOT COVERED BY AFORESAID CBDT CIRCULARS DATED 08.08.2019 AND 11.07.2018. [D]. IN THE RESULT, THE APPEAL BY REVENUE IS DISMI SSED. OUR DECISION WAS ORALLY PRONOUNCED IN THE OPEN COURT AF TER CONCLUSION OF HEARING ON THE DATE OF HEARING. NOW, THIS WRITTE N ORDER IS PRONOUNCED IN OPEN COURT ON 01.10.2019. SD/- SD/- (H.S. SIDHU) (ANADEE NATH MI SSHRA) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED: 01.10.2019 ITA NO: - 5213/DEL/2014 PAGE | 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED 30.09.2019 DRAFT PLACED BEFORE AUTHOR APPROVED DRAFT COMES TO THE SR.PS/PS ORDER SIGNED AND PRONOUNCED ON FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. DATE OF UPLOADING ON THE WEBSITE 01.10.2019