The ITO, Ward-6(4), Ahmedabad V. Shree Swami Industries, Ahmedabad

ITA 632/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89427 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 28-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained cash credit; Peak credit
• Section: 143(3); 68; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI SHAILENDRA KR. YADAV, J.M. & SHRI ANIL CHATURVEDI, A.M.) I.T. A. NO. 632 /AHD/2011 (ASSESS MENT YEAR: 2005-06) INCOME TAX OFFICER, WARD- 6(4), C.U. SHAH BUILDING, ASHRAM ROAD, AHMEDABAD V/S SHREE SWAMI INDUSTRIES PLOT NO. 75/3/1, PHASE-1, GIDC, VATVA, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAAFS5141C APPELLANT BY : SMT. SONIA KUMAR, SR. D.R RESPONDENT BY : SHRI S.N. DIVETIA, A.R. ( )/ ORDER DATE OF HEARING : 21-04-2015 DATE OF PRONOUNCEMENT :07-05-2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-XI, AHMEDABAD DATED 20.12.2010 FOR A.Y. 2005-06. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING OF PLASTIC SHEETS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2005-06 ON 10.08.2005 DECLARING TOTAL INCOME AT RS. 45,210/-. THE CASE WAS ITA NO 632/ AHD/2011 . A.Y. 2005- 06 2 SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 27.12.2007 AND THE TOTAL IN COME WAS DETERMINED AT RS. 42,76,623/-. THEREAFTER THE ASSESSMENT FRAMED U /S. 143(3) WAS SET ASIDE BY LD. CIT BY INVOKING PROVISIONS OF SECTION 263 OF THE ACT BY ORDER DATED 24.03.2009. THEREAFTER ASSESSMENT WAS FRAMED U/S. 1 43(3) R.W.S. 263 VIDE ORDER DATED 24.11.2009 BY MAKING ADDITION OF RS. 13 ,50,000/- AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. AGGRIEV ED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO V IDE ORDER DATED 20.12.2010 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFOR E US AND HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS;- 1. THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO VERIFY THE CONTENTION OF THE ASSESSEE, AN D TO DELETE THE ADDITION OF RS. 3,00,000/- MADE ON ACCOUNT OF DEPOSIT IN THE NAME O F ARIHANT FINVEST U/S 68 OF THE ACT, IF ASSESSEE'S CONTENTIONS ARE FOUND TO BE CORR ECT IN CONTRAVENTION OF SEC. 251. 2. THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO VERIFY THE CONTENTION OF THE ASSESSEE, AN D TO RE-COMPUTE, BY APPLYING 'PEAK- CREDIT METHOD' FOR MAKING THE ADDITION ON ACCOUNT O F DEPOSIT OF RS, 10,50,000/- IN THE NAME OF SURAT TEXTILE U/S 68 OF THE ACT , IF ASSESS EE'S CONTENTION ARE FOUND CORRECT , IN CONTRAVENTION OF SEC.251. 4. BEFORE US, LD. D.R. SUBMITTED THAT BOTH THE GROUNDS BEING INTER CONNECTED, CAN BE CONSIDERED TOGETHER. 5. BEFORE US, LD. D.R. SUBMITTED THAT A.O HAD MADE ADD ITIONS OF 2 AMOUNTS RECEIVED BY IT. WITH RESPECT TO THE ADDITION MADE U /S. 68 ON ACCOUNT OF RECEIPT OF DEPOSIT OF RS. 3,00,000/- RECEIVED FROM ARIHANT FINVEST, A.O WAS DIRECTED BY LD. CIT(A) TO VERIFY THE CONTENTIONS OF ASSESSEE AND IF THE ITA NO 632/ AHD/2011 . A.Y. 2005- 06 3 CONTENTION OF ASSESSEE WAS FOUND CORRECT, A.O WAS D IRECTED TO DELETE THE ADDITION. WITH RESPECT TO ADDITION OF AMOUNT RECEIV ED FROM SURAT TEXTILE, A.O WAS DIRECTED TO RE-COMPUTE THE ADDITION ON THE BASIS OF PEAK CREDIT METHOD AND RESTRICT THE ADDITION TO PEAK CREDIT. LD . D.R. SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 251OF THE ACT, LD. CI T(A) DOES NOT HAVE POWER TO REMAND AND THEREFORE REMANDING THE MATTER TO A. O IS NOT AS PER THE PROVISIONS OF SECTION 251. HE THEREFORE SUBMITTED T HAT ORDER OF A.O BE UPHELD. LD. A.R. ON THE OTHER HAND SUPPORTED THE OR DER OF A.O. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT A.O HAD MADE ADDITION OF RS. 3 LAC ON ACC OUNT OF DEPOSIT RECEIVED BY ASSESSEE FROM ARIHANT FINVEST AND RS. 10,50,000/ - ON ACCOUNT OF RECEIPTS FROM SURAT TEXTILES. WITH RESPECT TO THE ADDITIONS MADE IN RESPECT OF DEPOSIT FROM ARIHANT FINVEST, LD. CIT(A) HAS REMITTED THE M ATTER TO A.O TO VERIFY THE CONTENTIONS OF THE ASSESSEE AND IF THE CONTENTI ONS WAS FOUND CORRECT, THE ADDITION WAS DIRECTED TO BE DELETED. WITH RESPECT T O THE ADDITION IN RESPECT OF SURAT TEXTILE LD. CIT(A) DIRECTED THE A.O TO WORK O UT THE PEAK CREDIT BALANCE AND RESTRICT THE ADDITION TO THE PEAK CREDI T SUBJECT TO THE VERIFICATION. WE THUS FIND THAT CIT(A) WHILE DECIDING THE ISSUE H AD DIRECTED THE A.O TO VERIFY THE VARIOUS EVIDENCES SUBMITTED BY THE ASSES SEE AND THEREAFTER DELETE THE ADDITION. AT THIS MOMENT IT WILL BE RELEVANT TO REFER TO RELEVANT PROVISIONS OF SECTION 251 WHICH READS AS UNDER:- POWERS OF THE COMMISSIONER (APPEALS) 251 (1) IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEALS) SHALL HAVE THE FOLLOWING POWERS- (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT. ITA NO 632/ AHD/2011 . A.Y. 2005- 06 4 7. THE PERUSAL OF PROVISIONS OF SECTION 251(1)(A) REV EALS THAT CIT(A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT CAN CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT. THE POWER OF SETTING ASIDE WHICH WA S AVAILABLE TO CIT(A), IS NO MORE AVAILABLE TO CIT(A) BY VIRTUE OF AMENDMENT MADE BY FINANCE ACT 2001 WITH EFFECT FROM 1.06.2001. THUS IT CAN BE SEE N THAT IN THE PRESENT CASE CIT(A) HAS SET ASIDE THE ISSUE TO THE FILE OF A.O, THE POWERS OF WHICH ARE NOT AVAILABLE TO HIM AT THE RELEVANT TIME. WE THEREFORE ARE OF THE VIEW THAT THE MATTER NEEDS TO BE RESTORED TO THE FILE OF CIT(A) F OR CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THEREAFTER DECIDING THE ISSUE ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE AND IN ACCORDA NCE WITH LAW AND AFTER RECORDING A CLEAR FINDING ON THE ISSUE. IN THE RESU LT BOTH THE GROUND OF REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 07 - 05 - 2015. SD/- SD/- (SHAILENDRA KR. YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AH MEDABAD