Beant Kumar Bawa, Moga V. The Income Tax Officer, Moga

ITA 634/ASR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7809 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 15-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Assessee Lawyers: AJAY KUMAR JAIN; BALPREET SINGH MALWA LD CAS
• Keywords: Salary income; Peak credit
• Section: 80C; 131

Judgement Text

IN THE INCOME TAX APPELLATE T RIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO.634(ASR)/2016 ASSESSMENT YEAR:2011-12 BEANT KUMAR BAWA S/O SALIG RAM BAWA, PATTI NATHUKE, DUDIKE, MOGA. PAN:AIXPB-1924F VS. INCOME TAX OFFICER, WARD -1, MOGA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. AJAY KUMAR JAIN & SH. BALPREET SINGH MALWA (LD. CAS.) RESPONDENT BY: SH. RAHUL DHAWAN (LD. DR) DATE OF HEARING: 19.09.2017 DATE OF PRONOU NCEMENT:20.09.2017 ORDER PER N. K. CHOUDHRY: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE, ON FEELING AGGRIEVED AGAINST THE ORDER DATED 28.10.201 6 PASSED BY LD. CIT(A)-3, LUDHIANA, FOR ASST. YEAR: 2011-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED BY SUSTAINING THE ADDITION OF RS.2054530/- OUT OF T OTAL ADDITION OF RS.2566280/- ON ACCOUNT OF UNEXPLAINED DEPOSIT IN B ANK ACCOUNT OF APPELLANT WITHOUT APPRECIATING THE FACT THAT THE CA SH DEPOSIT IN BANK ACCOUNT BELONGED TO MAHANT LACHMAN DASS EDUCATIONAL SOCIETY & APPELLANT IS SECRETARY CUM CASHIER OF SOCIETY. FURT HER, THE LD. COMMISSIONER FAILED TO APPRECIATE THE FACT THAT ALL ENTRIES RELATING TO CASH DEPOSIT & WITHDRAWAL IN BANK ACCOUNT OF APPELLANT W ERE DULY RECORDED IN THE BOOKS OF ACCOUNTS OF SOCIETY & SAME WERE PRODUC ED BEFORE ASSESSING OFFICER & CIT(A). 2. WITHOUT PREJUDICE TO GROUND NO.1 THE LD. COM MISSIONER OF INCOME TAX (APPEAL) HAS ERRED BY NOT GIVING THE BENEFIT OF CAS H WITHDRAWAL FROM BANK I TA NO.634(ASR)/2016 A SST. YEAR: 2012-13 2 ACCOUNTS OF APPELLANT FROM THE CASH DEPOSITS IN BAN K ACCOUNTS OF APPELLANT. THE LD. CIT(A) & AO HAS FAILED TO APPREC IATE THE FACT THAT THERE WERE CASH WITHDRAWAL FROM BANK ACCOUNTS OF APPELLAN T BEFORE DEPOSITING THE CASH IN BANK ACCOUNTS. 3 THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, AL TER OR WITHDRAWN ANY GROUND OF APPEAL BEFORE FINAL HEARING. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THAT THE APPELLANT FILED HIS RETURN OF INCOME ON 30 .03.2012 DECLARING INCOME OF RS.1,83,340/-. THE APPELLANT DE RIVES INCOME FROM SALARY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE AO OBSERVED THAT THE APPELLANT HAD MADE CASH DEPOSIT OF RS.25,6 6,280/- IN HIS SAVING BANK ACCOUNT NO.281010100026859 MAINTAINED W ITH AXIS BANK, JAGRAON. THE APPELLANT VIDE ORDER SHEET ENTRY DATED 08.01.2013 WAS ASKED TO EXPLAIN EACH AND EVERY ENTRY OF DEPOSIT IN HIS SAVING BANK ACCOUNT. IN RESPONSE, THE APPELLANT SUBMITTED THAT HE HAD DEPOSITED AND WITHDRAWN CASH FROM HIS BANK ACCOUNT FOR HELPIN G SOCIETY I.E. MAHANT LACHMAN DASS EDUCATIONAL SOCIETY (REGD.) UND ER WHICH HE IS WORKING AS SECRETARY AND DRAWING SALARY OF RS.1,80, 000/- PER ANNUM. THE A.O ALTHOUGH RECORDED THE STATEMENT OF THE APPE LLANT BUT WAS NOT SATISFIED WITH THE CONTENTIONS OF APPELLANT. THE AO HELD THAT THE APPELLANT HAD COMPLETELY FAILED TO EXPLAIN THE CASH DEPOSITS AND WITHDRAWAL IN HIS BANK ACCOUNT, THEREFORE, MADE DIS ALLOWANCE OF RS.25,66,280/- U/S 69 OF THE ACT ON ACCOUNT OF UNEX PLAINED CASH DEPOSITS. THE AO ALSO PLACED HIS RELIANCE UPON MANY JUDGMENTS/DECISIONS. FURTHER, THE AO OBSERVED THAT THE APPELLANT HAD CLA IMED DEDUCTION U/S 80C OF THE ACT AMOUNTING TO RS.9,900/ -. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT HAD FAILED TO PRODUCE THE EVIDENCE IN SUPPORT OF HIS CLAIM MADE U/S 80C O F THE ACT. ACCORDINGLY, THE AO MADE DISALLOWANCE OF RS.9,900/- U/S 80C OF ACT. I TA NO.634(ASR)/2016 A SST. YEAR: 2012-13 3 4. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE AP PELLANT IS WORKING AS CASHIER-CUM-SECRETARY WITH MAHANT LACHMAN DASS, SENIOR SECONDARY SCHOOL RUN BY MAHANT LACHMAN DASS EDUCATIONAL SOCIETY. THE APPELLANT HAS MAINTAINED SAVING BANK ACCOUNT WITH A XIS BANK & MADE WITHDRAWAL AND DEPOSITS FOR THE PURPOSE OF SOCIETY, WHICH HAS BEEN DULY RECORDED IN REGULAR BOOKS OF ACCOUNTS OF SOCIET Y AND SAME HAVE BEEN PRODUCED DURING THE COURSE OF REMAND PROCEEDI NGS. THE APPELLANT FURTHER ARGUED THAT, HE DEPOSITED THE CASH OF SOCIETY IN HIS PERSONAL SAVING ACCOUNT INSTEAD OF SOCIETY BAN K ACCOUNT AS WITHDRAWAL FROM THE SOCIETY BANK ACCOUNT CAN BE MADE ONLY AFTER GETTING SIGNATURE OF APPELLANT & PRINCIPAL OF SOCIETY AND MOST OF TIME THE PRINCIPAL REMAINING OUT OF STATION. THE SOCIETY IS REGULAR ASSESSEE ASSESSED WITH ITO, JAGRAON-1 & ITR FOR A.Y. 2011- 12 ALONG WITH CERTIFIED COPY OF TH E ASSESSEE ACCOUNT IN THE BOOKS OF SOCIETY HAS BEEN SUBMITTED TO THE ASSESSING OFFICER. THE ASSESSING OFFICER DID NOT ACCEPT THE TRANSACTIONS OF DEP OSIT & WITHDRAWAL FROM APPELLANT BANK ACCOUNT FOR THE PURP OSE OF SOCIETY & MADE ADDITION OF R.25,66,280/- ON ACCOUNT OF DEPOSITS I N BANK ACCOUNT. IT WAS FURTHER ARGUED THAT THE ASSESSING OFFICER A LSO FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAS MADE WITHDRAWALS FROM SAME BANK ACCOUNT BEFORE THE DATE OF DEPOSITS. THE LD. ASSESSIN G OFFICER DURING THE REMAND PROCEEDINGS ACCEPTED WITHDRAWAL OF RS. 5,11,750/- FROM THE APPELLANT BANK ACCOUNT FOR THE PURPOSE OF SOCI ETY AND DID I TA NO.634(ASR)/2016 A SST. YEAR: 2012-13 4 NOT ACCEPT THE REMAINING ON THE GROUND THAT THE APPEL LANT HAS FAILED TO PRODUCE THE DOCUMENTARY EVIDENCE IN THE SHAPE OF PASSPORT OR OTHER JOURNEY TICKETS OF PRINCIPAL OF SOCIETY WITHOUT APPRECIAT ING THE FACT THAT THE REMAND PROCEEDINGS HAS BEEN INITIATED IN THE MON TH OF MAY, 2016 AND IT IS NOT POSSIBLE FOR ANY PERSON TO KEEP JOURNEY TICKETS. THE ASSESSING OFFICER FURTHER STATED THAT THE SOCIETY IS NOT REQUIRED ANY MONEY FROM APPELLANT EXCEPT RS.5,11,750/ - ON THE GROUND THAT THE SOCIETY HAS SUFFICIENT BALANCE. IT WAS FUR THER ARGUED BY THE LD. AR THAT IT IS WELL ACCEPTED JUDICIAL PRINCIP AL THAT THE ASSESSING OFFICER CANNOT TAKE DECISION ON BEHALF OF THE SO CIETY & IT IS PURELY PREROGATIVE OF BUSINESSMAN WHO RUN BUSINESS. THE ASSESSING OFFICER DID NOT ACCEPT THE TRANSACTION DULY RECORDED IN R EGULAR BOOKS OF ACCOUNTS ON FLIMSY GROUNDS WITHOUT ANY MATERIAL CONTRARY TO THE SUBMISSION MADE BY APPELLANT. THE LD. AR FURTHER ARGUED THAT THE REASON FOR AMOUNT RECEIVED FROM SOCIETY HAS BEEN EXPLAINED AND COPY OF ASSESSEE ACCOUN T IN THE BOOKS OF SOCIETY ALONG WITH COMPLETE BOOKS OF ACCOUNTS OF SO CIETY WERE PRODUCED BEFORE THE ASSESSING OFFICER AND THERE SHOULD N OT BE ANY REASON TO SUSPECT THE REGULAR AND RECORDED TRANSACTIONS IN THE BOOKS OF SOCIETY. THEREFORE, IT IS PRAYED THAT THE APPELLANT IS SMALL SALARIED EMPLOYEE AND GETTING SALARY AND HAVING NO OTHER SOURCE OF INCOME AND DEPOSITS IN BANK ACCOUNT WAS DULY BROUGHT ON RECORD DURI NG THE COURSE I TA NO.634(ASR)/2016 A SST. YEAR: 2012-13 5 OF ASSESSMENT PROCEEDINGS, THEREFORE, TRANSACTIONS OF APPELL ANT WITH SOCIETY BE ACCEPTED. WITH REGARD TO THE GROUND NO. 2:- THE LD. AR WITHOUT PREJUDICE TO THE ABOVE SUBMISSION AND ARGUMENT, IF THERE IS NO T RANSACTION OF DEPOSIT AND WITHDRAWAL WITH SOCIETY, EVEN THEN THE BENEFIT OF C ASH WITHDRAWAL SHOULD BE GIVEN FOR THE CONSIDERATION OF THE DEPOSIT IN BANK ACCOUNT. THE APPELLANT HAD PREPARED CASH FLOW STATEMENT DEMONSTRATING THE WITH DRAWAL AND DEPOSITS IN BANK ACCOUNT OF APPELLANT & IT IS CLEAR THAT MAXIMU M NEGATIVE BALANCE (PEAK BALANCE) WAS RS.3,34,840/- AS ON 04.08.2010 & IT WA S CONVERTED INTO POSITIVE BALANCE ON 09.08.2010, THEREFORE, THE PEAK BALANCE CAN BE CONSIDERED FOR THE TAXATION PURPOSES. THE LD. AR ALSO RELIED UPON THE VARIOUS JUDGMENTS OF HONBLE PUNJAB & HARYANA HIGH COURT & AMRITSAR & CHANDIGARH ITAT BENCHES. (I) CIT, CHANDIGARH VS. PARNEETA GOYAL, ITA NO 2 78 OF 2010 (P & H HIGH COURT) (II) ITO VS SH NAGENDRA PRASHAD ITA NO. 200/2014, ITAT, AMRITSAR BENCH. (III) ITO VS NAVDEEP SINGH, ITA NO 24 OF 2013, ITA T, AMRITSAR BENCH. (IV) SH VIVEK JOLLY VS DCIT ITA NO 672/CHD/2012,IT AT, CHANDIGARH BENCH. 5. ON THE OTHER HAND, LD. DR DRAWN OUR ATTENTION T O PARA NO.3.5 TO 3.9 OF THE IMPUGNED ORDER HEREIN AND SUBMITTED TH AT THE LD. CIT(A) THOROUGHLY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND R IGHTLY CAME TO CONCLUSION THAT BY AND LARGE THE THEORY CONCOCTED BY THE APPELLANT IS NOT CONVINCING ENOUGH AND AT TIMES DEFEAT S THE LOGIC OF HUMAN PROBABILITIES BECAUSE THE APPELLANT HAD COMPLETE LY FAILED TO EXPLAIN THE EACH DEPOSIT AND WITHDRAWAL IN HIS BANK AC COUNT AND IT I TA NO.634(ASR)/2016 A SST. YEAR: 2012-13 6 REFLECTS FROM THE ASSESSMENT PROCEEDINGS THAT THE APPELLANT EVEN FAILED TO FILE COPIES OF BOOKS OF ACCOUNTS AND RELEVANT COPIES OF CASH BOOK AS CLAIMED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THEREFORE, THE APPEAL OF THE ASSESSEE IS LIABLE TO BE D ISMISSED. 6. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE AS THE ASSESSEE HAD TAKEN MAIN STAND FOR WITHDRAWAL A ND DEPOSITS OF AMOUNT IN HIS OWN ACCOUNT DUE TO THE UNAVAIL ABILITY OF THE PRINCIPAL OF THE SCHOOL BECAUSE MOST OF TIME THE PRINCIPA L REMAINS OUT OF STATION. IT IS UNDISPUTED FACT THAT ASSESSEE/APPELLAN T FAILED TO PRODUCE ANY DETAILS QUA PASSPORT OR JOURNEY CARRIED OUT BY THE SAID PRINCIPAL AND IT IS ALSO UNDISPUTED FACT THAT THE APPE LLANT WAS GIVEN SEVERAL OPPORTUNITIES AS IT REFLECTS FROM THE ASSESSMENT ORD ER, TO PRODUCE THE BOOKS OF ACCOUNT OF THE SOCIETY AND TO EXPLAI N HIS POSITION SATISFACTORILY AND FURTHER TO EXPLAIN W.R.T CASH DEPOSIT S IN HIS BANK ACCOUNT, HOWEVER, EVEN AFTER LAPSE OF ONE YEAR, THE AP PELLANT DID NOT FILE ANY EXPLANATION ON THIS ISSUE AND AVOIDED THE ASSESSM ENT PROCEEDINGS, IT IS EVIDENT FROM THE ORDER SHEET THAT TH E LD. A.O HAD GIVEN AT LEAST 18-19 OPPORTUNITIES BY WAY OF ADJOURNM ENT AND FIXATION OF THE CASE AND EVEN SUMMONS U/S 131 WERE ALSO ISSUED TO T HE APPELLANT TO RECORD STATEMENT, HOWEVER, YIELDING NO R ESULT. WE ARE IN AGREEMENT WITH THE LD. DR THAT THE APPELLANT HAS MISE RABLY FAILED TO FILE ANY CONVINCING REPLY, DURING THE COURSE OF APPELL ANT PROCEEDINGS AND TO PRODUCE THE BOOKS OF ACCOUNTS OF SOCIETY, WHEREIN T HE APPELLANT I TA NO.634(ASR)/2016 A SST. YEAR: 2012-13 7 HAS CLAIMED TO BE ITS SECRETARY. EVEN OTHERWISE, THE APPE LLANT HAD FAILED TO PROVE THE REASONS WITH THE DOCUMENTARY EVIDE NCE AS TO WHY THE CASH WAS ACCEPTED BY THE SOCIETY FROM THE APPELLANT WH EREAS SUFFICIENT CASH BALANCE HAS ALREADY BEEN AVAILABLE WITH THE SOCIETY ON VARIOUS OCCASIONS. THE LD. CIT(A), ALTHOUGH, GIVEN PAR TLY RELIEF OF RS.5,11,750/- BY TREATING AS EXPLAINED AND DELETING THE SAID ADDITION, HOWEVER, CONFIRMED THE REMAINING PORTION. WE DO NOT FIND ANY SUBSTANCE IN THE SUBMISSION OF THE ASSESSEE WITH REGARD FOR SUSTAINING THE GROUND NO.1. HENCE, THE GROUND NO.1, STANDS DISMISSED. NOW, COMING TO GROUND NO.2, THE ASSESSEE HAS RAISED ALTERNATIVE PLEA OF PEAK CREDIT THEORY. THIS PLEA IS GENERALLY ACCEPTED AS IT IS LOGICAL AND ACCEPTABLE (WHETHER THE CREDITOR I S A GENUINE PARTY OR NOT), PROVIDED THERE IS NOTHING IN THE MATERIAL O N RECORD TO SHOW THAT A PARTICULAR WITHDRAWAL/REPAYMENT COULD NOT HAVE BEEN AVAILABLE ON THE DATE OF THE SUBSEQUENT CREDIT. FROM THE BANK FLOW STATEMENT FILED BY THE ASSESSEE THAT THERE IS REGULAR TRANSACTIONS AND DEPOSITS AND WITHDRAWALS IN T HE BANK ACCOUNT OF THE ASSESSEE, THEREFORE, IT WOULD BE APPROPRIATE TO TAKE INTO CONSIDERATION THE PEAK CREDIT AMOUNT FOR TAXATION PURP OSES. HENCE, WE ARE OF THE CONSIDERED OPINION THAT AMOUNT OF RS.3,34, 840/- AS IT REFLECTS FROM TRANSACTIONS DATED 04.08.2010 WHICH SEEMS TO BE A PEAK I TA NO.634(ASR)/2016 A SST. YEAR: 2012-13 8 CREDIT AND WOULD BE APPROPRIATE TO BE TAKEN INTO CON SIDERATION, HENCE, THE REVENUE AUTHORITY DIRECTED TO CONSIDER THE PEAK CRE DIT AMOUNT FOR MAKING ADDITIONS. ON THE AFORESAID ANLIZATION, THE ORDER PASSED BY THE LD. CIT(A) IS SET ASIDE AND MODIFIED TO THE EXTENT THAT PEAK CREDIT AMOUNT OF RS.3,34,840/- BE TAKEN INTO CONSIDERATION FOR TAXATIO N PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.09.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY ) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED:20.09.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER