Pavan Malhotra, Jammu V. The Income Tax Officer, Jammu

ITA 651/ASR/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7984 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-01-2018
• Assessment Year: 2006-2007
• Appeal Filed On: 26-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALWINDER KAUR LD
• Assessee Lawyers: P N ARORA LD
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBU NAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.651(ASR)/2016 ASSESSMENT YEAR:2006-07 SH. PAWAN MALHOTRA 6-D/C, GANDHI NAGAR JAMMU, J&K PAN:ADLMP9523E VS. INCOME TAX OFFICER WARD-1(2), JAMMU (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P. N. ARORA (LD. ADV.) RESPONDENT BY: SH. SMT. BALWINDER KAUR (LD. DR) DATE OF HEARING: 30.01.2018 DATE OF PRONOUNCEMENT: 11.04.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE/APPELLANT, ON FEELING AGGRIEVED AGAINST THE ORD ER DATED 08.09.2016 PASSED BY THE LD. CIT(A)-1, AMRITSAR CAMP A T JAMMU (J&K) U/S 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. THE FOLLOWING GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 1. THAT THE AUTHORITIES BELOW HAVE WRONGLY MADE TH E ADDITION OF RS.16,70,206/- WHICH IS AGAINST THE FACTS OF THI S CASE, THE BANK ACCOUNT TO WHICH THE ASSESSING OFFICER IS REFERRING IS DUTY REFLECTED IN THE BOOKS OF THE ASSESSEE. 2. THAT THE ADDITION OF RS.16,70,206/- MADE AND CON FIRMED BY AUTHORITIES BELOW IS AGAINST THE FACTS OF THIS CASE SINCE THE ASSESSING OFFICER TOOK INTO ACCOUNT ONLY THE GROSS TOTAL OF ALL ITA NO.651/ASR/2016 (A.Y.2006-07) SH. PAVAN MALHOTRA, JAMMU VS. ITO 2 DEPOSITS MADE DURING WHOLE OF THE YEAR AND HAVE GRO SSLY NEGLECTED IN NOT GIVING THE CREDIT OF WITHDRAWALS MADE IN DUR ING THE YEAR. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DOCTOR AND ALSO RUNNING A DIAGNOSTICS CENTER IN THE NAM E AND STYLE OF M/S HIMAL DIAGNOSITICS AND HAD FILED HIS RETURN O F INCOME ON 29 TH JUNE, 2006 BY DECLARING THE INCOME OF RS.1,41,120/-. THE ASSESSING OFFICER WHILE EXAMINING THE COPY OF BANK A CCOUNT NO.1231SB1089 (J&K BANK), ASCOME, BATRA, NOTICED THA T THE ASSESSEE HAS MADE CASH DEPOSITS TO THE EXTENT OF RS.30,13,80 0 IN HIS ACCOUNT FROM 1 ST APRIL, 2005 TO 31 ST MARCH, 2006 AS PER DETAILS ANNEXURE A. THE ASSESSING OFFICER APPLIED THE P EAK CREDIT METHOD AND ADDED RS.16,70,206/- AS DIFFERENCE IN THE CASH DEPOSITS OF RS.30,13,800/- AND DECLARED GROSS TURN OVE R RS.13,43,594/- THE ASSESSING OFFICER ALSO MADE TWO OTHER ADDITIONS. 4. THE ASSESSEE, ON FEELING AGGRIEVED, CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT(A), WHO WHILE DECIDI NG THE APPEAL OF THE ASSESSEE BY OBSERVED THAT THAT THE LD. AO HAS RIGHTLY ASSESSED INCOME OF THE ASSESSEE AFTER TAKING INTO A CCOUNT THE PEAK CREDIT IN ABSENCE OF ANY DOCUMENTARY EVIDENCE AND CLARIFICATION IN RESPECT OF VARIOUS CASH DEPOSITS AMOUNTIN G TO RS.30,13,800/- IN THE BANK ACCOUNT OF THE ASSESSEE AND FIN ALLY DISMISSED THE APPEAL OF THE ASSESSEE , WHILE ALLOWING PART LY RELIEFS. 5. FEELING AGGRIEVED AGAINST THE ORDER IMPUGNED HEREIN PASSED BY THE LD. CIT(A), THE ASSESSEE HAS CHALLENGED THE ITA NO.651/ASR/2016 (A.Y.2006-07) SH. PAVAN MALHOTRA, JAMMU VS. ITO 3 ADDITION OF RS.16,70,206/- WHICH WAS SUSTAINED BY THE LD . CIT(A) ON THE BASIS OF PEAK CREDIT THEORY . 6. WE HAVE HEARD THE RIVAL PARTIES AND PERUSED THE RELEVANT MATERIAL PLACED ON RECORD, AS IN THE INSTANT CASE, THE ASS ESSEE HAS DECLARED GROSS TURN OVER OF RS.13,43,594/- IN HIS INCO ME AND EXPENDITURE ACCOUNTS, HOWEVER, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT ON EXAMINATION OF COPY OF BANK ACCO UNT NO. STATED ABOVE, IT WAS NOTICED THAT THE ASSESSEE HAS MADE CASH DEPOSITS TO THE EXTENT OF RS.30,13,800/- IN HIS ACCOUN T FOR THE PERIOD OF 1 ST APRIL, 2005 TO 31 ST MARCH, 2006. ON QUERY THE ASSESSEE FAILED TO CLARIFY THE SAME AND IN THAT EVENTUALI TY THE DIFFERENCE OF THE AFORESAID AMOUNTS I.E., 16,70,206/-W AS ADDED TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNDISCLOSED SALES BY APPLYING PEAK CREDIT THEORY, WHICH WAS AFFIRMED BY THE LD. CIT(A). OUR ATTENTION WAS DRAWN TO THE BANK STATEMEN T AS WELL AS ACCOUNT LEDGER WHERE THE AMOUNT OF RS.30,13,800/- AS DEPICTS PERTAINS TO PERIOD FROM 1 ST APRIL, 2005 TO 31 ST MARCH, 2006 AND EVEN THE AMOUNT OF RS.3,23,000/- OUT OF RS.30,13,800/- DEPOSITED ON DATED 28 TH APRIL, 2006, UNDISPUTEDLY PERTAINS TO THE SUBSEQUENT YEAR. IT IS NOT OUT TO PLA CE HEREIN BELOW THAT ALL THE DETAILS OF CASH DEPOSITS TO THE TUNE OF RS.30,13,800/- IS AVAILABLE AND CO-RELATES WITH THE LED GER ACCOUNT AND FULLY EXPLAINABLE BECAUSE THE SAME HAVE BEE N ROUTED THROUGH CASH BOOK MAINTAINED BY THE ASSESSEE. IT SEEMS THAT THE ASSESSING OFFICER HAS TAKING INTO CONSIDERATION T HE DEBIT AS WELL AS CREDIT ENTRIES FOR APPLYING PEAK CREDIT THEOR Y WHICH IS ITA NO.651/ASR/2016 (A.Y.2006-07) SH. PAVAN MALHOTRA, JAMMU VS. ITO 4 NOT SUSTAINABLE, THEREFORE, THE OBSERVATION OF THE LD. CIT(A) TO THE EXTENT THAT, IN THE ABSENCE OF DOCUMENTARY EVIDENC ES AND CLARIFICATION IN RESPECT OF VARIOUS CASH DEPOSITS AMOUNTI NG TO RS.30,13,800/- IN THE BANK ACCOUNT OF THE ASSESSEE CULMINAT ED INTO RIGHTLY ASSESSED INCOME OF THE ASSESSEE AFTER TAKING IN TO ACCOUNT IS PEAK CREDIT, IS CONTRARY TO THE FACTS AND DOCUMEN TS ON RECORD AND HENCE CAN NOT BE SUSTAINED . EVEN OTHERWISE, T HE GROSS TURN OVER O THE ASSEEEE HAS ALSO BEEN ACCEPTED BY THE DEPARTMENT IN SUBSEQUENT ASSESSMENT YEAR WITHOUT DEDUCTIO N. EVEN OTHERWISE, THE LD. DR HAS NOT REFUTED THE CLAIM O F THE ASSESSEE BY PLACING ON RECORD ANY CONTRARY MATERIAL AN D/OR POINTING OUT ANY DEFECT IN THE LEDGER ACCOUNT AND THE BANK STATEMENT OF THE ASSESSEE. IN THE CUMULATIVE EFFECT THE A DDITION OF RS.16,70,206/- AS SUSTAINED BY THE LD. CIT(A) IS LIA BLE TO BE DELETED AND, HENCE, THE ADDITION STANDS DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.04.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDI CIAL MEMBER DATED:11.04.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SH. PAVAN MALHOTRA, GANDHI NAGAR, JAMMU, (J &K) (2) THE ITO, WARD-1(2)- JAMMU (3) THE CIT(A)-1, AMRITSAR CAMP AT JAMMU (J&K) (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER