ITO 25(1)(2), MUMBAI V. SUDHIR M SHAH, MUMBAI

ITA 6215/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4264 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 25-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 08-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JITENDRA SINGH
• Assessee Lawyers: JOTNILAKSHMI NAYAK
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI . . , . . '# '# '# '# , $ $ $ $ % % % % BEFORE SHRI R.K. GUPTA, JM, AND SHRI N. K. BILLAIYA , AM /. I.T.A. NO.6215/MUM/2011 ( & & & & '& '& '& '& / ASSESSMENT YEAR: 2008-2009) INCOME TAX OFFICER, 25(1)(2), C-11 2 ND FLOOR, PRATYAKSHKARBHAVAN BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI- 400051 / VS. SHRI SUDHIR M. SHAH 1905, GURUKUL TOWER, J.S. MARG, DAHISAR (EAST), MUMBAI-68. ( $ /. )* /. PAN/GIR NO. : AFGPS1131K ( (+ / APPELLANT ) : ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : SHRI JITENDRA SINGH ,-(+ . / RESPONDENT BY : SMT. JOTNILAKSHMI NAYAK 0$ / DATE OF HEARING : 25.06. 2013 23' 0$ /DATE OF PRONOUNCEMENT : 10. 07.2013 4 4 4 4 / O R D E R PER : R.K. GUPTA, JM THIS APPEAL FILED BY THE DEPARTMENT AGAINST THE OR DER OF LD. CIT(A) -35, DATED 28.06.2011 RELATING TO THE ASSESSMENT YEAR 20 08-09. 2 ITA 6215 M 2011(AY-2008- 09) ITO VS. SUDHI R M SHAH 2. THE DEPARTMENT IS RESTRICTING THE ADDITION OF RS .26,46,135/- TO RS. 9,10,825/- WITHOUT APPRECIATING THE FACT THAT THE A SSESSEE HAD CONCEALED THIS PARTICULAR BANK ACCOUNT IN IDBI BANK AND DID NOT OF FER/DEPOSITS EARNED OUT OF THE BUSINESS ACTIVITIES. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURE OF PHARMACEUTICAL PRODUCTS. THE ASSESSMENT WAS COMPLETED ON A TOTAL INCOME OF RS. 50,01,450/- AGAINST RETURN INCOME OF RS. 2,31,630/-. ASSESSING OFFICER RECEIVED CERTAIN INFORMATION FROM AIR BY WHICH IT WAS INFORMED THAT ASSESEE HAS DEPOSITED A SUM OF RS. 26,46,135 IN THE SAVING BANK ACCOUNT MAINTAI NED WITH IDBI BANK LTD.. THE AO ALSO NOTICED THAT ASSESSEE HAS INTRODUCED CAPITA L OF RS. 15,34,708/- IN THE PROPRIETARY CONCERNED. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE CASH DEPOSITS IN BANK AS WELL AS INTRODUCED CAPITAL IN THE PROPRIETA RY CONCERNED. IT WAS EXPLAINED THAT THE BANK ACCOUNT IN HIS PERSONAL ACCOUNT HAVI NG NOTHING TO DO WITH BUSINESS CONDUCTED BY HIM AND IN THE BANK ACCOUNT THE OLD OU TSTANDING DUES FROM VARIOUS PARTIES, RELATIVES AND FRIENDS RECEIVED AND THE SAM E WERE DEPOSITED IN THE BANK ACCOUNT AS WELL AS IN THE PROPRIETARY CONCERNED. AL TERNATIVELY IT WAS SUBMITTED THAT IN RESPECT OF CASH DEPOSIT ONLY PEAK AMOUNT SHOULD BE ADDED WHICH IS ONLY OF RS. 9,10,825/-. IT WAS ALSO CONTENDED THAT A SUM OF RS. 17,58,400/- WITHDRAWN FROM BANK SHOULD BE TAKEN INTO CONSIDERATION FOR WORKIN G OUT THE PEAK AMOUNT. HOWEVER, THE AO DID NOT ACCEPT THE CLAIM OF THE ASS ESSEE AS HE WAS NOT SATISFIED WITH THE EXPLANATION. ACCORDINGLY, HE ADDED THE ADD ITION OF RS. 40,32,450/- ON ACCOUNT OF CASH DEPOSIT IN BANK AND INTRODUCTION O F CAPITAL IN PROPRIETARY CONCERNED RESPECTIVELY. THE CONTENTION RAISED BEFOR E THE ASSESSING OFFICER WERE REITERATED BEFORE LD. CIT(A). AFTER CONSIDERING TH E SUBMISSIONS HE FOUND THAT THE ADDITION CAN BE MADE ONLY ON THE BASIS OF PEAK THEO RY. HE FOUND THAT PEAK AMOUNT 3 ITA 6215 M 2011(AY-2008- 09) ITO VS. SUDHI R M SHAH IS OF RS. 9,10,825/- . ACCORDINGLY HE DIRECTED THE AO TO RESTRICT THE ADDITION OF RS. 26,46,135 TO RS. 9,10,825/-. HOWEVER, THE CAPITAL INTRODUCED IN THE PROPRIETARY CONCERNED AT RS. 13,84,846 WAS CONFIRMED. NOW THE D EPARTMENT IS IN APPEAL HELD BEFORE THE TRIBUNAL. 4. LD. DR STRONGLY SUBMITTED THAT LD. CIT(A) WAS NO T CORRECT IN WORKING OUT OF THE PEAK AMOUNT AT RS. 9,10,825/-. IT WAS SUBMIT TED THAT THE AMOUNT WITHDRAWN FROM BANK WAS NOT REDEPOSITED IN THE BANK AS THE SA ME HAS RE-DEPOSITED SOMEWHERE ELSE, ACCORDINGLY THE ENTIRE AMOUNT IS LI ABLE TO BE CONFIRMED. 5. ON THE OTHER HAND, THE LD. AR WAS PLACED RELIANC E ON THE ORDER OF THE LD. CIT(A). 6. AFTER CONSIDERING THE ORDER OF THE AO, CIT(A) AN D SUBMISSIONS OF BOTH THE PARTIES, WE FOUND THAT MATTER SHOULD GO BACK TO FIL E OF THE ASSESSING OFFICER TO CONSIDER THE ASPECT ONCE AGAIN. THE CONTENTION OF T HE LD. DR THAT CASH DEPOSIT IN THE BANK WAS INDEPENDENT DEPOSIT AS NO AMOUNT WAS R E-DEPOSITED FROM THE AMOUNT WHICH WAS WITHDRAWN BY THE ASSESSEE. THE AMOUNT DEP OSITED IN PROPRIETARY CONCERN WAS A DIFFERENT AMOUNT OR WAS DEPOSITED AF TER WITHDRAWING FROM THE BANK, THEREFORE, ENTIRE DEPOSIT MADE IN THE BANK IS LIABL E TO BE TAXED. THE SUBMISSION OF THE LD. DR NEEDS VERIFICATION IF AO FOUND THAT NO AMOUNT WAS RE-DEPOSITED IN THE BANK FROM THE AMOUNT OF WITHDRAWAL MADE EARLIER FRO M THE SAME BANK THEN OF COURSE ENTIRE AMOUNT DEPOSITED IN THE BANK IS LIABL E TO ADDED TO THE INCOME OF THE ASSESSEE. THE CIT(A) HAS ALREADY CONFIRMED THE ADDI TION OF RS. 13,84,846/- ON ACCOUNT OF PERSONAL ADVANCED AMOUNT RECEIVED BACK. THEREFORE, THIS FACT IS ALSO TO BE TAKEN INTO CONSIDERATION WHILE WORKING OUT PEAK AMOUNT, AS, THERE IS NO DISPUTE 4 ITA 6215 M 2011(AY-2008- 09) ITO VS. SUDHI R M SHAH IN ADOPTING PEAK THEORY. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THE ISSUE INVOLVED AND REMAND THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR PASSING THE FRESH ORDER AFTER AFFORDING THE REASONABLE OPPORTUNITY TO THE ASSESSEE. WE ORDER A CCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS A LLOWED FOR STATISTICAL PURPOSE. 06 ) 7 89: ;0 )0 <' ORDER PRONOUNCED ON 10 TH DAY JULY, 2013 . 4 23' 6 10.07.2013 3 SD/- SD/- ( N. K. BILLAIYA ) ( R.K. GUPTA ) $ / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI: DATED : 10. 07. 2013 . /. PRAMOD KUMAR, PS 4 4 4 4 ,0 ,0 ,0 ,0 >'0 >'0 >'0 >'0 / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT 3. ? ) ( / THE CIT(A) 4. ? / CIT - CONCERNED 5. @ ,0 , , / DR, ITAT, MUMBAI 6. A& B / GUARD FILE 4 4 4 4 / BY ORDER, 8 88 8 / < < < < ) ) ) ) (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI