ITO, Kolar V. Shri. Varkey Validath Rosamma, Madikeri

ITA 621/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2038 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-11-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 12-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V S SREELEKHA
• Assessee Lawyers: R CHANDRASHEKAR
• Keywords: Peak credit
• Section: 142(1); 234B; 143(2); 144

Judgement Text

PAGE 1 OF 5 ITA NO.621/B/09 1 IN THE INCOME TAX APPELLATE TRIBUNA L, BANGALORE BENCH B BEFORE SHRI GEORGE GEORGE K, J.M. AND SHRI A MOHAN ALANKAMONY, A.M ITA NO.621/BANG/2009 (ASSESSMENT YEAR 2005-06) THE INCOME TAX OFFICER, WARD-2, KOLAR. - APPELLANT VS SHRI VARKEY VALIDATH ROSAMMA, PRINCIPAL, JYOTHI SCHOOL, MADIKERE, CHINTAMANI TQ. - RESPONDENT APPELLANT BY : SMT. V S SREELEKHA RESPONDENT BY : SHRI R CHANDRASHEKAR ORD ER PER GEORGE GEORGE K : THIS APPEAL, FILED BY THE REVENUE, IS DIRECTED AG AINST THE ORDER OF LEARNED CIT(A)-V, BANGALORE DATED 24TH MARCH, 2009. THE ASST. YEAR CONCERNED IS 2005-06. 2. THE EFFECTIVE GROUNDS RAISED ARE AS FOLLOWS:- I) THE CIT(A) HAS GRANTED RELIEF ON INSUFFICIENT DATA AND ON ORAL SUBMISSION OF THE ASSESSEE. PAGE 2 OF 5 ITA NO.621/B/09 2 II) THE CIT(A) OUGHT NOT TO HAVE WORKED OUT THE PEAK CREDIT ON HIS OWN AND ALLOWED THE RELIEF ON BALANCE AMOUNT, WHEN THE ASSESSEE HAS NOT BROUGHT ANY EVIDENCE IN SUPPORT OF HIS CLAIM OF BANK DEPOSITS WHICH IS TREATED AS INCOME FROM OTHER SOURCES FOR THE SAID YEAR. THERE IS NO MATERIAL ON RECORD TO NEGATE THE ASSESSMENT ORDER OF ASSESSING OFFICER. UNDER SUCH CIRCUMSTANCES, THE QUESTION OF WORKING OUT PEAK CREDITS AND TREATING IT AS UNEXPLAINED INCOME DOES NOT ARISE. III) THE CIT(A) OUGHT NOT TO HAVE WORKED OUT THE PEAK CREDIT ON HIS OWN AND ALLOWED THE RELIEF ON BALANCE AMOUNT, INSPITE OF ISSUING LETTERS AND SUMMONS, THE ASSESSEE DID NOT APPEAR NOR SENT ANY REPLY FOR FILING THE EXPLANATION TO THE AO BEFORE PASSING THE ORDER U/S 144 FOR DEPOSIT MADE IN BANK ACCOUNT FOR THE SAID YEAR. NO OTHER MATERIAL ON RECORD IS THERE TO NEGATE THE ASSESSMENT ORDER OF AO. UNDER SUCH CIRCUMSTANCES THE QUESTION OF WORKING OUT PEAK CREDITS AND TREATING IT AS UNEXPLAINED INCOME DOES NOT ARISE. 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS:- THE ASSESSEE IS AN INDIVIDUAL. SHE IS THE PRINCI PAL AND CONSULTANT TO JYOTHI VIDYA NIKETAN AT CHINTAMANI. BA SED ON AIR INFORMATION, NOTICE U/S 142(1) WAS ISSUED TO THE AS SESSEE ON 13.11.2007. IN RESPONSE TO THE SAME, THE ASSESSEE FILED RETURN OF INCOME ON 23.11.2007 DECLARING AN INCOME OF RS.84,0 00/-. ON FURTHER NOTICE ISSUED U/S 143(2) AND 142(1), THERE WAS NO RESPONSE AND SINCE THE BOOKS OF ACCOUNTS WERE NOT PRODUCED F OR VERIFICATION, THE ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT. IN THE PAGE 3 OF 5 ITA NO.621/B/09 3 ASSESSMENT, THE ASSESSING OFFICER BROUGHT TO TAX TH E CREDITS IN THE BANK AMOUNTING TO RS.11,12,500/- AS INCOME FROM OTHER SOURCES AND CONCLUDED THE ASSESSMENT DETERMINING A TOTAL IN COME OF RS.13,72,100/-. THE DEMAND RAISED INCLUDING THE IN TEREST U/S 234A AND 234B AMOUNTED TO RS.7,00,936/-. 4. ON FURTHER APPEAL, IT WAS SUBMITTED THAT ASSESS EE WAS A TREASURER OF JYOTHI VIDYA NIKETAN, A TRUST, WHICH R UNS JYOTHI SCHOOL AT CHINTAMANI. THE ASSESSEE TOGETHER WITH A NOTHER TRUSTEE OF THE TRUST HAD OPENED A JOINT SAVINGS BANK ACCOUN T WITH CANARA BANK. IT WAS SUBMITTED THAT FUNDS COLLECTED FROM T HE STUDENTS TOWARDS BOOKS AND UNIFORM WERE DEPOSITED IN THE SAI D JOINT SAVINGS BANK ACCOUNT AND THE ASSESSEE HAD FURNISHED A COPY O F THE RESOLUTION PASSED IN THE TRUST FOR SUCH DEPOSITS. IT WAS FURTHER SUBMITTED THAT THE AMOUNTS WERE WITHDRAWN TO MAKE P AYMENTS TO THE SUPPLIERS OF BOOKS AND UNIFORMS AND NO PART OF THE DEPOSITS MADE IN THE JOINT BANK ACCOUNT COULD BE TERMED AS I NCOME OF THE ASSESSEE. IT WAS FURTHER CONTENDED THAT THE ASSESS ING AUTHORITY IS NOT RIGHT IN BRINGING TO TAX THE ENTIRE DEPOSITS MA DE IN THE BANK ACCOUNT HELD JOINTLY. IT WAS SUBMITTED THAT THERE WAS NO BASIS FOR DETERMINING TOTAL INCOME AT RS.13,72,100/-. 5. THE CIT(A) WAS OF THE VIEW THAT THERE WAS NO CONCRETE EVIDENCE PRODUCED FOR THE SOURCE OF THIS I NCOME DEPOSITED IN THE BANK ACCOUNT. HE HELD THAT THE PE AK CREDIT OF RS.5,73,537/- SHOULD BE BROUGHT TO TAX INSTEAD OF R S.11,12,500/- PAGE 4 OF 5 ITA NO.621/B/09 4 TAKEN BY THE ASSESSING OFFICER AS INCOME FROM OTHER SOURCES. ACCORDINGLY, HE PARTLY ALLOWED THE ASSESSEE'S APPEAL. 6. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFO RE US. THE LEARNED DR SUBMITTED NECESSARILY THE MATTER HAS TO BE REMITTED BACK TO THE ASSESSING OFFICER, SINCE THERE WAS NO PROPER BASIS ON WHICH THE CIT(A) HAS ARRIVED AT THE PEAK C REDIT OF RS.5,73,537/-. IT WAS SUBMITTED THAT THE CIT(A) IS WRONG IN REDUCING THE ADDITION MADE UNDER THE INCOME 'FROM O THER SOURCES' AT RS.5,73,537/- INSTEAD OF RS.11,12,500/- ADOPTED BY THE ASSESSING OFFICER. IT WAS FURTHER CONTENDED BY THE LEARNED DR, EVEN ASSUMING EVIDENCES WERE FURNISHED BEFORE THE L EARNED CIT(A) BY THE ASSESSEE CONCERNED, THE SAME WAS NOT PUT TO T HE ASSESSING OFFICER FOR HIS REMARKS AND HENCE, THERE IS A VIOLA TION OF RULE 46A OF THE I T RULES. 7. ON THE OTHER HAND, THE LEARNED AR SUBMITTED THA T AS AGAINST THE ADDITION OF PEAK CREDIT OF RS.5,73,537/ - BY THE CIT(A), THE ASSESSEE HAD FILED APPEAL BEFORE THE TRIBUNAL I N ITA NO.535/BANG/2009 AND THE SAME WAS DISPOSED OF BY THE ORDER OF THE TRIBUNAL DATED 16TH OCTOBER, 2009. THE TRIBUNA L VIDE ORDER CITED SUPRA, HAD REMITTED THE MATTER BACK TO THE FI LE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. WE ARE OF THE VIEW, THE MATTER HAS TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER, SINC E TRIBUNAL IN PAGE 5 OF 5 ITA NO.621/B/09 5 ASSESSEE'S APPEAL (ITA NO.535/BANG/2009 DATED 16/10 /2009), HAD REMITTED THE ISSUE TO ASSESSING OFFICER FOR FRE SH CONSIDERATION. HENCE, THE ENTIRE MATTER IS RESTOR ED TO THE FILE OF THE ASSESSING OFFICER AND HE SHALL EXAMINE THE DETA ILS/EVIDENCES FURNISHED BY THE ASSESSEE TO ARRIVE AT A PROPER CONC LUSION. NEEDLESS TO SAY, THE ASSESSEE SHALL BE AFFORDED ADEQ UATE OPPORTUNITY OF HEARING, BEFORE THE COMPLETION OF THE ASSESSMENT. 9. IN THE RESULT, THE APPEAL FILED BY REVENUE IS AL LOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 4TH DECEMBER, 2009. SD/- SD/- (A MOHAN ALANKAMONY) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED :04/12/2009 COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE CIT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF 7. GF, ITAT, NEW DELHI. MSP/1/2/ BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.