Shri Rajnikant Narendrabhai Patel, Vadodara V. The Income Tax Officer, Ward-4, Anand

ITA 61/AHD/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5407 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 08-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: N M DARJI
• Keywords: Salary income; Peak credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER RAJNIKANT NARENDRABHAI PATEL, MARUTI KRUPA, 7 - GOKUL NAGAR, ANAND, V.V. NAGAR ROAD, ANAND - 388001 PAN: ADOPP6683R (APPELLANT) VS THE IT O , WARD - 4 , ANAND (RESPONDENT) REVENUE BY : S H RI ALBINUS TIRKEY , SR. D . R. ASSESSEE BY: SHRI N.M. DARJI, A.R. DATE OF HEARING : 01 - 08 - 2 018 DATE OF PRONOUNCEMENT : 28 - 09 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A. Y. 2010 - 11 , ARI SES FROM ORDER OF THE CIT(A) - 2, VADODARA DATED 03 - 11 - 2 015 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1) THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS, IN CONFIRMING THE ADDITION MADE BY THE AO OF THE PEAK OF THE CASH DEPOSITED IN SB ACCOUNTS RS.12,65,151/ - U/S.69A OF THE ACT HOLDING THAT THE APPELLANT WAS FOUND TO BE THE OWNER OF EXCESSIVE MONEY TO THE EXTENT OF RS.12,65,151/ - AS ON 13/03/2010 THE CIT(A) IS NOT JUSTIFIED IN HOLDING THAT THE APPELLANT IS TO BE THE OWNER OF UNEXPLAINED CASH RS.12,65,151/ - AS THE APPELLANT IS SERVING IN BSNL AS SENIOR TELEPHONE OPERATOR HAVING SOURCE OF INCOME FROM SALARY AND SAV ING BANK INTEREST. HE IS NOT ENGAGED IN ANY TRADE OR BUSINESS OR PROFESSION. I T A NO . 61 / A HD/20 16 A SS ESSMENT YEAR 2010 - 11 I.T.A NO. 61 /AHD/20 16 A.Y. 2010 - 11 PAGE NO RAJNIKANT NARENDRABHAI PATEL VS. IT O 2 2) WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL NO. 1 ABOVE (RESERVING THE RIGHTS TO EMPHASIS ON GROUNDS OF APPEAL NO. 1 ABOVE) THE CIT(A) HAS ERRED IN LAW AND FACTS IN NOT ALL OWING THE ADDITION OF PEAK CASH CREDIT RS.5,98,487/ - MADE BY THE AO IN AY:2009 - 10. 3) THE CIT(A) IS NOT JUSTIFIED IN NOT GIVING ANY FINDING IN RESPECT OF THE SALARY OF THE APPELLANT CREDITED BY CHEQUE RS.2,27,389/ - DURING THE PREVIOUS YEAR IN HIS AXI S BANK SB ACCOUNT NO.038010100106146 HELD JOINTLY WITH HIS SON JAY AS THE SAME AMOUNT HAD BEEN TAKEN IN TO CONSIDERATION BY THE AO IN WORKING OUT PEAK OF CASH RS.12,65,151/ - AS PER DETAILS AVAILABLE IN THE ASSESSMENT ORDER. 3 ALL THE GROUNDS OF APPEAL AR E INTER - CONNECTED, THEREFORE FOR THE SAKE OF CONVENIENCE, THEY ARE ADJUDICATED BY THIS COMMON ORDER AS UNDER. 4 . IN THIS CASE, RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2 , 66 , 456/ - WAS FILED O N 16 TH JULY, 2010. SUBSEQUENTLY, THE CASE WAS SELECTED UND ER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 26 TH MARCH, 2011. DURING THE COURSE OF SECURITY ASSESSMENT , ON VERIFICATION OF BANK DETA IL, THE ASSESSING OFFICER HAS NOTIC ED THAT CERTAIN TRANSACTION OF CASH DEPOSIT MADE IN THE BANK ACCOUNT OF T HE ASS E SSEE DURING THE YEAR UNDER CONSIDERATION . AS PER THE AIR INFORMATION, THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS MADE DEPOSIT /TRANSFER AMOUNTING TO RS. 4 5 , 44 , 100/ - IN THE SB WITH AXIS BANK A/C NO. 457010100083793/ - HELD JOINTLY WITH HIS W IFE AND ANOTHER AXIS BANK A/C. NO. 4570101000 26406 HELD WITH SON. THE ASSESSING OFFICER REPRODUCED THE COPIES OF BANK A/C ON PAGE 2, 3, AND 4 OF ASSESSMENT ORDER. THEREAFTER, THE ASSESSING OFFICER HAS I SS U ED SHOW CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN T HE CASH DEPOSIT IN HIS BANK A/C HELD IN JOINT NAME WITH OTHER FAMILY MEMBERS AS CITED ABOVE IN THIS ORDER. THE ASSESSEE HAS STATED THAT THE ABOVE ENTRIES WERE OF THE AMOUNT BORROWED FROM HIS FRIENDS AND RELATIVES FOR THE PURPOSE OF OBTAINING VISA FOR THE PURPOSE OF STUDY BY HIS SON IN ABROAD AND REQUESTED THE ASSESSING OFFICER TO COMPUTE TAX LIABILITY ON THE BASIS OF PEAK CREDIT OF ALL THE ACCOUNTS. THE ASSESSING OFFICER HAS STATED THAT ASSESSEE HAS FAILED TO EXPLAIN THE ENTRIES OF CASH DEPOSIT/CREDIT TRA NSFER IN HIS BANK A/C AND HE HAS NOT EXPLAINED THE SOURCE AND NOT OFFERED THE AMOUNTS FOR TAXATION. THEREAFTER, AT PAGE NO. 5 TO 14 , THE ASSESSING OFFICER HAS GIVEN THE DETAILS OF WITHDRAWAL AND DEPOSIT AND BALANCE ON DIFFERENT DATES FROM THE AFORESAID A CCOUNTS AND WORKED OUT THE PEAK CREDIT TO THE I.T.A NO. 61 /AHD/20 16 A.Y. 2010 - 11 PAGE NO RAJNIKANT NARENDRABHAI PATEL VS. IT O 3 AMOUNT OF RS. 12 , 65 , 151/ - . THE ASSESSING OFFICER HAS CONSIDERED THE PEAK CREDIT AS THE INCOME OF THE A SSE SSEE AND ADDED THIS AMOUNT OF RS . 12 , 65 , 151/ - TO THE TOTAL INCOME OF THE ASSESSEE U/S. 69A OF THE ACT. 5 . AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF THE LD. CIT(A) IS REPRODUCED AS UNDER: - 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORDS, SUBM ISSION OF THE APPELLANT AND REMAND REPORT OF THE ASSESSING OFFICER. I FIND THAT THE CASH DEPOSIT IN THE BANK ACCOUNT WITH AXIS BANK LTD., ANAND TO THE EXTENT OF RS.45,44,100/ - ARE NOT DISPUTED BY THE APPELLANT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ALTHOUGH THE APPELLANT CLAIMED THAT HE HAD BORROWED FUNDS FROM FRIENDS AND RELATIVES FOR THE PURPOSE OF OBTAINING VISA FOR HIS SON BUT HE DID NOT PURSUE THIS CLAIM FURTHER, BY FILING DOCUMENTARY EVIDENCE BEFORE THE ASSESSING OFFICER. INSTEAD, THE APPELLANT HAS REQUESTED THE ASSESSING OFFICER TO COMPUTE THE TAX LIABILITY BY CONSIDERING THE PEAK CREDIT OF ALL THE BANK ACCOUNT. ACCORDINGLY, THE ASSESSING OFFICER HAS MADE A DETAILS ANALYSIS OF ALL THE CASH DEPOSIT AND WITHDRAWAL MADE AND THEN WORKED OUT PEAK CA SH DEPOSIT OF RS.12,65,151/ - AS ON 13.03.2010 (INCORRECTLY MENTIONED AS 13.03.2009 BY ASSESSING OFFICER). THE COMPUTATION OF PEAK CASH DEPOSIT IN THE BANK ACCOUNT IS ALSO NOT BEEN DISPUTED BY THE APPELLANT. HOWEVER, AT THE APPELLATE STAGE, THE APPELLANT HA S CLAIMED RECEIPT OF CASH FROM 10 PERSONS AS DETAILED IN PARA - 3 ON THE BASIS OF THEIR AFFIDAVIT. BUT DURING THE COURSE OF REMAND PROCEEDINGS, THE APPELLANT COULD NOT ESTABLISH THE CREDITWORTHINESS OF SUCH PERSONS AND SOURCE OF CASH IN THEIR HANDS. SINCE TH E AMOUNT HAS BEEN CLAIMED TO HAVE RECEIVED IN CASH, THE GENUINENESS OF THE TRANSACTIONS HAS ALSO NOT BEEN ESTABLISHED BY THE DOCUMENTARY EVIDENCE. KEEPING IN VIEW THESE FACTS AND ALSO THE FACT THAT NO SUCH DETAILS WERE FURNISHED BEFORE THE ASSESSING OFFICE R ALTHOUGH THE APPELLANT ATTENDED THE PROCEEDINGS ON 11.02.2013, FILLING OF AFFIDAVIT AT THE APPELLATE STAGE CERTAINLY GOES TO PROVE THAT THE APPELLANT HAS FABRICATED THE AFFIDAVIT IN CONNIVANCE WITH HIS FRIENDS/RELATIVES. THE FACT THAT THE APPELLANT HAS N OT COME FORWARD TO CONTROVERT THE REMAND REPORT OF THE ASSESSING OFFICER ALSO GOES TO ESTABLISH THAT THE CLAIM OF CASH BORROWED IS AN AFTER THOUGHT AND REMAINS UNSUBSTANTIATED. ACCORDINGLY, I HOLD THAT THE APPELLANT HAS/DEPOSITED CASH IN THE BANK ACCOUNT O UT OF HIS UNACCOUNTED SOURCES ONLY. 4 .1. IN RESPECT OF CLAIM OF CREDIT FOR THE ADDITION MADE IN A.Y. 2009 - 10 AT RS.5,98,487/ - , IT IS NOTICED FROM THE ASSESSMENT ORDER OF A.Y. 2009 - 10 THAT THE PEAK DEPOSIT OF RS.5,98,487/ - WAS WORKED OUT AS ON 30.03.2009 IN THE SAME BANK ACCOUNTS WITH THE AXIS BANK LTD. ON PERUSAL OF BANK STATEMENT IN THE YEAR UNDER CONSIDERATION REVEALS THAT THE PEAK CREDIT OF LAST ASSESSMENT YEAR HAS BEEN SHOWN AS OPENING BALANCE IN THE CURRENT ASSESSMENT YEAR. TO BE SPECIFIC, THE OPENING BALANCE AS ON 02.04.2009 HAS BEEN SHOWN AT RS.2,46,377/ - IN BANK ACCOUNT NO. 457010100083793 AND RS.2,83,2567 - IN BANK ACCOUNT NO. 457010100026406. SINCE PEAK CREDIT ADDED IN THE LAST ASSESSMENT YEAR HAS BEEN SHOWN AS OPENING BALANCE IN THE BANK ACCOUNT IN THE YEAR UNDER CONSIDERATION, THE SAME HAS ALREADY BEEN CONSIDERED IN THE CASH WITHDRAWAL MADE BY THE APPELLANT AS THE CASH WITHDRAWAL HAVE BEEN DEDUCTED FROM THE CASH DEPOSITED IN THE BANK) ACCOUNT. ACCORDINGLY, I HOLD THAT THE APPELLANT DOES NOT DESERVE ANY RELIEF ON THIS ACCOUNT. 4.2. THE APPELLANT HAS ALSO CLAIMED THAT THE CASH DEPOSIT IN BANK ACCOUNT CANNOT BE ADDED BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT SINCE HE HAS NOT BEEN MAINTAINING BOOKS OF ACCOUNT AND BANK STATEMENT IS NOT HIS BOO KS OF ACCOUNT. THIS CLAIM OF THE APPELLANT IS AGAINST THE FACTS OF THE CASE AS WELL AS LEGAL POSITION BECAUSE THE I.T.A NO. 61 /AHD/20 16 A.Y. 2010 - 11 PAGE NO RAJNIKANT NARENDRABHAI PATEL VS. IT O 4 ASSESSING OFFICER HAS NOT MADE ADDITION U/S. 68. IN FACT, THE ASSESSING OFFICER HAS MADE THE ADDITION U/S. 69A ON ACCOUNT OF INVESTMENT IN CAS H DEPOSIT IN THE BANK ACCOUNT. AS A MATTER OF FACT, THE APPELLANT HAS DEPOSITED CASH IN THE BANK ACCOUNT MORE THAN THE WITHDRAWAL MADE BY HIM AND ACCORDINGLY THE APPELLANT WAS FOUND TO BE OWNER OF EXCESSIVE MONEY TO THE EXTENT OF RS.12,65,151/ - AS ON 13.03 .2010 SOURCE OF WHICH REMAINED UNEXPLAINED. SINCE THE SOURCE OF MONEY HELD BY THE APPELLANT AT RS.12,65,151/ - REMAINED UNEXPLAINED, THE ADDITION HAS BEEN RIGHTLY MADE BY THE ASSESSING OFFICER U/S. 69A OF THE ACT. ACCORDINGLY, THE ADDITION MADE IS SUSTAINED AND THE APPELLANT FAILS IN RESPECT OF GROUND NO. 1 . 6 . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS SUBMITTED PAPER BOOK CONTAINING INFORMATION AND DETAILS FURNISHED BEFORE THE ASSESSING OFFICER AND LD. CIT(A) DURING THE COU RSE OF ASSESSMENT AND APPELLATE PROCEEDINGS. HE HAS CONTENDED THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF THE PEAK OF THE CASH DEPOSIT MADE BY THE ASSESSING OFFICER U/S. 69A. HE HAS ALSO ST AT ED THAT LD. CIT(A) HAS ALSO ERRED IN NOT ALLOWING T HE ADDITION OF PEAK CASH CREDIT OF RS . 5 , 98 , 487/ - MADE BY ASSESSING OFFICER IN ASSESSMENT YEAR 2009 - 10. HE HAS ALSO STATED THAT CIT(A) IS NOT JUSTIFIED FOR NOT GIVING ANY FINDING IN RESPECT OF SALARY OF THE A SSESSEE CREDITED BY CHEQUE OF RS . 2 , 27 , 389/ - . ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER LD. CIT(A). 7 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. ON SCRUTINY THE ASSESSING OFFICER HAS NOTICED CASH DEPOSIT OF RS. 25,64,900/ - AND RS . 1979 2 00/ - IN BANK A/C. NO. 457010100083793 AND BANK A/C NO. 457010100 0 26406 WITH THE AXIS BANK HELD BY THE ASSESSE JOIN TLY WITH HIS WIFE AND OTHER A/C JOINTLY WITH HIS SON. THE ASS ESSEE WAS TO EXPLAIN THE SOURCE OF VARIOUS CASH DEPOSITED IN THE AFORESAID BANK A/C S . T HE ASSESSEE EXPLAINED IN A GENERAL MANNER THAT T H E IMPUGNED CASH WAS BORROWED F R O M FRIENDS AND RELATIVES FOR THE PURPOSE OF OBTAINING VISA FOR THE STUDY OF HIS SON. ON FAILING TO SUBSTANTI AT E THE SOURCE OF CASH DEPOSIT, THE ASSESSEE HAS REQUESTE D THE ASSESSING OFFICER TO COMPUTE THE T A X LIABILITY BY COMPUTING THE PEAK CREDIT OF ALL HIS ACCOUNTS. THEREFORE , THE ASSESSING OFFICER HAS WOR K ED OUT THE PEAK CASH DEPOSIT IN THE AFORESAID BANK ACCOUNTS T O THE AMOUNT OF RS. 12,65,151/ - . BEFORE THE LD. CI T(A) THE ASSESSEE HAS CLA IMED RECEIPT OF CASH DEPOSITS F R O M 10 I.T.A NO. 61 /AHD/20 16 A.Y. 2010 - 11 PAGE NO RAJNIKANT NARENDRABHAI PATEL VS. IT O 5 PERSONS BUT HE COULD NOT ESTA BLISH THE CREDITWORTHINESS OF SAME PERSONS W ITH RELEVANT SUPPORTING MATERIAL . THE L D . CIT(A) H A S SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER AS THE AS SESS EE HAS FAILED TO PROVE THE SOURCE OF SUM DEPOSITS. REGARD ING GROU ND O F APPEAL OF THE ASSESSEE PERTAINING TO NOT ALLOWING THE ACTION O F PEAK CASH CREDI T OF RS . 5,98,487/ - MADE BY T H E ASSESSING OFFICER IN ASSESSMENT YEAR 2009 - 1 0 AND IN RESPECT OF SALARY O F RS . 227389/ - DURING THE PREVIOUS YEAR CREDITED IN HIS BANK. IN THIS CONNECTION, WE HAVE PERUSED THE MATERIAL ON RECORD AND FIND TH A T T HESE TWO ISSUES RAISED BY THE ASSESSE HAS NOT BEEN ADJUDICATED WITH SPECIFIC ALLY IN THE ORDERS OF ASSESSING OFFICER AN D THE LD. CIT(A) . THERE F ORE, WE CONSIDER IT APPROPRIATE TO RESTORE TH E SE TWO ISSUES TO THE FILE OF ASSESSING OFFICER TO DECIDE A AFRESH AFTER EXAMINATION /VERIFICATION OF THE RELEVANT MA TERIAL S AND AFTER AFFORDING ADEQUATE OPPORTUNITY T O THE ASSESSEE. ACCORDINGLY , THE APPEAL OF T HE ASSESSEE I S PARTLY ALLOWED FOR STATISTIC A L PURP O SES . 8. IN THE RESULT , THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OURT ON 28 - 09 - 201 8 SD/ - SD/ - ( MAHAVIR PRASAD ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 28 /09 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,