Shri Sureshsingh Shripalsingh Rajput, Surat V. The Income Tax Officer, Ward-9(4), Now Ward-3(3)(4), Surat

ITA 703/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1069 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 20-07-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 21-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Business income; Salary income; Peak credit; Revised return
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER SURESHSINGH SHRIPALSINGH RAJPUT, ROOM NO. B - 102, DEEPMALA APARTMENT, VIVEKANAND SOCIETY, LAMBE HANUMAN ROAD, SURAT - 395010 PAN: AIUPR1003Q (APPELLANT) VS THE ITO, WARD - 9(4), SURAT (RESPONDENT) REVENUE BY : S H RI SA TISH SOLANKI , SR. D . R. ASSESSEE BY: S H RI S.N. DIVETIA , A.R. DATE OF HEARING : 20 - 07 - 2 016 DATE OF PRONOUNCEMENT : 26 - 07 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2010 - 11 , AR IS ES FROM ORDER OF THE CIT(A) - V, SURAT DATED 18 - 09 - 2014 IN APPEAL NO. CAS/V/32/2013 - 14 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 703 / A HD/20 16 A SSESSMENT YEAR 2010 - 11 I.T.A NO. 703 /AHD/20 16 A.Y. 2010 - 11 PAGE NO SURESHSINGH SHRIPALSINGH RAJPUT VS. ITO 2 2. THE ASSES SEE RAISES THE FOLLOWING SUBSTANTIVE GROUNDS IN ITS APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) HAS ERRED IN MAKING ENHANCEMENT OF ADDITION MADE BY THE ID AO BY TREATING THE ENTIRE TAX CREDIT OF RS.1613588/ - AS UND ISCLOSED INCOME INSTEAD OF GRANTING RELIEF IN RESPECT OF ADDITIONS MADE BY THE AO ON ACCOUNTS OF PEAK CREDIT OF RS. 143601/ - IN THE BANK ACCOUNT IN ORIENTAL BANK OF COMMERCE AND RS.322717/ - BEING 20% OF CASH DEPOSIT OF RS.1613588/ - IN THE BANK ACCOUNT IN O RIENTAL BANK OF COMMERCE AS CLAIMED BY THE APPELLANT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) HAS ERRED IN ISSUING DIRECTIONS U/S 150(1) OF THE L. T. ACT TO ISSUE NOTICES U/S 148 OF THE FOR AY 2008 - 09, 2009 - 10 AND 2011 - 12 AND TO REOPEN THE RELEVANT ASSESSMENT YEARS AND EXAMINE THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT IN ORIENTAL BANK OF COMMERCE. 3. THE ASSESSEE DERIVES SALARY INCOME FROM M/S. SASHI SILK MILL ALONG WITH INTEREST INCOME. HE FILED RETURN ON 17 - 02 - 2011 DECLARING INCOME OF RS. 1,56,790/ - . THE ASSESSING OFFICER TOOK UP SCRUTINY. HE RECEIVED AIR INFORMATION ABOUT ASSESSEE S CASH DEPOSIT AMOUNTING TO RS. 16,13,588/ - IN HIS ORIENTAL BANK OF COMMERCE, S AVING ACCOUNT AT SURAT. THE ASSESSEE HAD ADMITT EDLY NOT DEC L ARED THE SAME EITHER IN RETURN OR IN BOOKS OF ACCOUNTS . THE ASSESSING OFFICER ADDED PEAK OF RS. 1,43,601/ - ALONG WITH 20% OF GROSS FIGURE OF RS. 3,22,713/ - ; TOTALING TO RS. 4,66,318/ - IN ASSESSEE S HANDS VIDE ASSESSMENT ORDER DATED 01 - 03 - 2013 . 4. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) ISSUED AN ENHANCEMENT NOTICE DATED 14 - 08 - 2014 U/S. 251(1)(AA) R.W.S. 251(2) I.T.A NO. 703 /AHD/20 16 A.Y. 2010 - 11 PAGE NO SURESHSINGH SHRIPALSINGH RAJPUT VS. ITO 3 OF THE ACT INTER ALIA ON THE GROUND THAT THE ASSESSING OFFICER HAD NOT ADOPTED CORRECT FIGURE OF THE ABOVE STATED PEA K ADDITIO N AMOUNT. 5. THE ASSESSEE SUBMITTED HIS REPLY CLARIFYING THAT HE HAD AGREED ONLY FOR PEAK CREDIT FIGURE OF RS. 1,43,601/ - AND NOT QUA 20% COMP ON ENT (SUPRA). WE FIND FROM CIT(A) S ORDER THAT HE DID NOT FILE ANY REPLY ON THE ENHANCEMENT ASPECT. THIS MA DE THE LOWER APPELLATE AUTHORITY TO PRODUCE ON THE BASIS OF MATERIAL AVAILABLE IN THE CASE FILE ALREADY ON RECORD. IT ACCORDINGLY EXAMINED VALIDITY OF ASSESSEE S REVISED RETURN SUBMITTED ON 12 - 02 - 2013 U/S. 44AF OF THE ACT BEFORE THE ASSESSING OFFICER STAT ING BUSINESS INCOME OF RS. 27,796/ - . THE SAME PROVED OUT TO BE CONTRARY TO THE STAND TAKEN IN THE LOWER APPELLATE PROCEEDINGS THAT THE ONLY SOURCE OF INCOME APART FROM INTEREST WAS SALARY. THE ASSESSEE HAS NOT FILED A COPY OF ITS REVISED RETURN BEFORE US ALONG WITH DETAILS OF RELEVANT RETAIL BUSINESS CARRIED O UT. THE CIT(A) WENT ON TO OBSERVE THAT THE ABOVE STATED REVISED STATEMENT WAS NOT ADMISSIBLE IN ABSENCE OF A REVISED RETURN. HE THEREAFTER REVERSES ASSESSING OFFICER S PEAK CREDIT + 20% OF GROSS CA SH DEPOSIT AMOUNTS TO THE EXTENT OF ADDING THE ENTIRE CASH DEPOSITED OF RS . 16,13,588/ - U/S. 68 OF THE ACT. THE CIT(A) FURTHER DIRECTS THE ASSESSING OFFICER TO INITIATE SECTION 148 PROCEEDINGS AGAINST THE ASSESSEE AS UNDER: - 6.6.1 ON THE EXAMINATION OF T HE BANK ACCOUNT STATEMENT OF SB ACCOUNT NO. 11062151004647 IN THE ORIENTAL BANK OF COMMERCE, SURAT, IT IS NOTICED THAT THE APPELLANT HAD OPENED THIS ACCOUNT IN JUNE 2008 AND HEAVY CASH DEPOSITS HAVE BEEN MADE IN DIFFERENT YEARS. THE DETAILS OF THE RETURN O F INCOME AND THE CASH DEPOSITS MADE IN VARIOUS YEARS ARE AS FOLLOWING: I.T.A NO. 703 /AHD/20 16 A.Y. 2010 - 11 PAGE NO SURESHSINGH SHRIPALSINGH RAJPUT VS. ITO 4 A.Y. DATE OF FILING OF RETURN OF INCOME INCOME AS PER RETURN OF INCOME (SALARY INCOME AND INTEREST INCOME) CASH DEPOSIT IN OBC ACCOUNT NO. PERIOD OF CASH ; DEPOSIT (FY) 2008 - 09 19.08.2008 RS. 1,10,450/ - RS. 5,07,182/ - 16.01.2008 TO 28.03.2008 (FY 2007 - 08) 2009 - 10 15.12.2009 RS. 1,58,750/ - RS. 10,32,600/ - 03.04.2008 TO 17.03.2009 (FY 2008 - 09) 2010 - 11 17.02.2011 RS, 1,56,790/ - RS, 16,13,588/ - 17.04.2009 TO 31.03.2010 (FY 2009 - 10) 2011 - 12 12.10.2011 RS. 1,58,550/ - RS. 63,08,198/ - 03.04.2010 TO 22.09.2010 (FY 2010 - 11) 2012 - 13 NO RETURN OF INCOME FILED -------------- -------------- THE ACCOUNT WAS CLOSED ON 22.09.2010 I.T.A NO. 703 /AHD/20 16 A.Y. 2010 - 11 PAGE NO SURESHSINGH SHRIPALSINGH RAJPUT VS. ITO 5 2013 - 14 NO RETURN OF INCOME FILED --------- ------------ TOTAL CASH DEPOSITS RS. 94,61,568/ - 6.6.2 THE AO HAS TAKEN NO ACTION REGARDING THE CASH DEPOSITS PERTAINING TO AY 2008 - 09, 2009 - 10, AND 2011 - 12. IN ONLY A.Y. 2010 - 11 THE CASH DEPOSITS HAVE BEEN EXAMINED BY THE AO. IN ALL THESE ASSESSMENT YEARS THE APPELLANT HAS MADE HUGE CASH DEPOSITS IN THE BANK ACCOUNT NO. 11062151004647 OF OBC THOUGH HE WAS HAVING NO OTHER SOURCE OF INCOME APART FROM SALARY AND INTEREST INCOME. THE APPELLANT HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE IN THE INSTANT CASE. THE FACTS AND CIRCUMSTANCES OF THE CASE FOR THE OTHER ASSESSMENT YEARS IS SAME. THE AO IS DIRECTED U/S 150(1) OF T HE ACT TO ISSUE NOTICES U/S 148 OF THE ACT FOR AY 2008 - 09, 2009 - 10, AND 2011 - 12 AND TO REOPEN THE RELEVANT ASSESSMENT YEARS AND EXAMINE THE SOURCE OF CASH DEPOSITS AS PER THE DETAILS GIVEN ABOVE IN PARA 6.6.1. 6.7.1 IN VIEW OF THE ABOVE FACTS AND CIRCUMST ANCES, THE APPELLANT HAS NOT BEEN ABLE TO PROVE THE SOURCE OF THE CASH DEPOSIT IN THE BANK ACCOUNT. THE SUBMISSIONS NOT SUPPORTED BY ANY EVIDENCES ARE 'MAKE BELIEVE' ARRANGEMENT. HENCE, THE ENTIRE CASH DEPOSIT OF RS. 16,13,588/ - IS BEING TREATED AS UNDISC LOSED AND ADDED TO THE INCOME OF THE APPELLANT. THE ADDITION MADE BY THE AO IN THE ASSESSMENT ORDER OF RS 4,66,316/ - ON ACCOUNT OF PEAK BALANCE AND 20% OF CASH DEPOSIT IS BEING ENHANCED TO RS. 16,53,600/ - UNDER THE PROVISIONS OF SECTION 251(1) R.W.S. 251( 2) OF THE ACT. THE AO IS BEING DIRECTED TO ISSUE THE DEMAND NOTICE ACCORDINGLY. AS THIS ORDER OF THE ENHANCEMENT MERGES WITH THE ASSESSMENT ORDER, NO SEPARATE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT, IS BEING INITIATED DURING THE APPELLATE PROCEEDINGS AS THE AO HAS READY INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) R.W.S. 274 OF THE ACT IN THE ASSESSMENT ORDER ON THIS ISSUE OF CASH DEPOSITS. I.T.A NO. 703 /AHD/20 16 A.Y. 2010 - 11 PAGE NO SURESHSINGH SHRIPALSINGH RAJPUT VS. ITO 6 6.7.2 IN THE RESULT, THIS APPEAL IS DISMISSED AND THE ADDITION IS ENHANCED TO RS. 16,13,588/ - U/S 251(1) R.W .S. 251(2) OF THE IT ACT, 1961 ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. THE AO IS DIRECTED TO TAKE ACTION U/S 148 OF THE IT ACT FOR THE AY 2008 - 09, 2009 - 10, AND 2011 - 12 AS PER THE DIRECTIONS MADE U/S 150(1) OF THE ACT AS DISCUSSED IN PARA 6.6.2 6. WE H AVE HEARD BOTH THE PARTIES. CASE FILE PERUSED . WE HAVE ALREADY NARRATED RELEVANT FACTS OF THE CASE. THE SAME ARE NOT REPEATED FOR THE SAKE OF BREVITY. THERE IS NO DISPUTE THAT THE ASSESSEE HAS NOT PROVED TO HA VE ACTUALLY CONDUCTED ANY RETAIL BUSINESS I N THE RELEVANT PREVIOUS YEAR. HIS STAND THROUGHOUT EXCEPT TO THE EXTENT OF REVISED STATEMENT NOT ACCEPTED HAS BEEN THAT HIS SOURCE OF INCOME IS ONLY SALARY. LEARNED COUNSEL STRONGLY ARGUES THAT THE ASSESSEE HAS BEEN CARRYING OUT RETAIL SAREE BUSINESS SO AS TO BE ELIGIBLE FOR PEAK CREDIT ADDITION AMOUNT ONLY. WE PUT A SPECIFIC QUERY AS TO WHETHER ANY EVIDENCE IS AVAILABLE IN SUPPORT OF THIS RETAIL BUSINESS PLEA. LEARNED CO UNSE L FAILS TO PLACE RELIANCE ANY DOCUMENTARY EVIDENCE FORMING PART OF T HE CASE FILE I N THIS REGARD. WE AGREE WITH THE CIT(A) IN THIS PECULIAR BACKDROP OF FACTS T HAT THE ASSESSEE S REVISED STATEMENT IS LIABLE TO BE REJECTED. IT IS MADE CLEAR THAT THERE IS NO ARGUMENT ON ASSESSEE S PART QUA HIS LATTER SUBSTANTIVE GROUND . NOR IS THERE ANY EVIDENCE OR LEGAL PLEA RAISED TO CONTROVERT THE CIT(A) S FINDINGS ON ENHANCEMENT ISSUE. WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). THE SAME IS CONFIRMED. I.T.A NO. 703 /AHD/20 16 A.Y. 2010 - 11 PAGE NO SURESHSINGH SHRIPALSINGH RAJPUT VS. ITO 7 7. THIS ASSESSEE S APPEAL IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 26 - 07 - 201 6 SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 26 /07 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVEN UE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,