ITO, JODHPUR V. Shri Kishore Kumar Vadera, JODHPUR

ITA 72/JODH/2014

• Counselvise Citation: 7223314 RSA 2014
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: G S MEHTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 72/JU/2014 ASSESSMENT YEAR: 2009-10 THE INCOME-TAX OFFICER VS. SHRI KISHORE KUMAR VA DERA WARD 3 (2) 404, MARUDEEP APARTMENT JODHPUR SARDARPURA, JODHPUR PAN NO. AEIVP 6187 P CO NO. 09/JU /2014 [A/O ITA NO. 72/JU/2014 ASSESSMENT YEAR: 2009-10] SHRI KISHORE KUMAR VADERA VS. THE INCOME-TAX OF FICER 404, MARUDEEP APARTMENT WARD 3 (2) SARDARPURA, JODHPUR JODHPUR PAN NO. AEIVP 6187 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.S. MEHTA DEPARTMENT BY : SHRI N.A. JOSHI, DR DATE OF HEARING : 04.04.2014 DATE OF PRONOUNCEMENT : 10.04.2014 2 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT( A), DATED 13.12.2013 PERTAINING TO A.Y 2009-2010. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN G REY CLOTH. FOR A.Y. 2009-10, HE FILED HIS RETURN OF IN COME [ROI] ON 31.03.2010 DECLARING TOTAL INCOME OF RS. 2,34,950/-. AS AGAINST WHICH ASSESSMENT HAS BEEN MA DE AT A TOTAL INCOME OF RS. 22,33,086/-. IN ARRIVING AT THE ABOVE INCOME, THE A.O. HAS ADDED A SUM OF RS. 19,98,136/- U/S 69 OF THE INCOME-TAX ACT, 1961 ['THE ACT', FOR SHOR T]. 3 2.1 AGGRIEVED, THE ASSESSEE WENT IN APPEAL AND THE LD. CIT(A) HAS RESTRICTED THE ADDITION TO RS. 7,01,584/ - AGAINST RS. 19,98,136/- ADDED BY THE A.O. AND THUS, HAS GIV EN A RELIEF OF RS. 12,96,552/-. 2.2 AGAINST THIS FINDING OF THE LD. CIT(A), THE REV ENUE HAS COME IN APPEAL AND THE ASSESSEE HAS CHALLENGED SUST AINED ADDITION OF RS. 7,01,584/-. 2.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. WE HAVE FOUND THAT ON THE BASIS OF ANNUAL INFORMATION REPOR T [AIR] RECEIVED FROM THE ICICI BANK PERTAINING TO F.Y. 200 8-09 [RELEVANT TO A.Y. 2009-10] IT WAS NOTICED THAT TOTA L AMOUNT OF RS. 1,20,99,498/- HAS BEEN DEPOSITED IN CASH IN ASSESSEES SAVINGS BANK ACCOUNT ON VARIOUS DATES. ON DEMAND, THE BRANCH MANAGER, VIDE HIS LETTER DATED 01.12.2011, INFORMED THE A.O. THAT THIS ASSESSEE HA S GOT THREE BANK ACCOUNTS AND HAS ALSO PROVIDED THE STATE MENTS OF THE BANK ACCOUNTS. IT WAS GATHERED FROM THE MAN AGERS 4 INFORMATION THAT IN ALL, THE ASSESSEE HAS DEPOSITED RS. 1,57,38,096/- IN THESE SAVINGS BANK ACCOUNTS AS UND ER: S. NO. ACCOUNT NO. AMOUNT REMARKS 1. 016701551570 27 ,59,098 2. 016701551506 1,22,14,498 CLOSED ON 25.05.2009 3. 16701553366 7,64,500 CLOSED ON 11.08.2008 TOTAL 1,57,38,096 2.4 THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF THESE CASH DEPOSITS. IT WAS REPLIED THAT THESE DEP OSITS ARE OUT OF RECEIPTS OF SALE PROCEEDS, FROM SUNDRY DEBTO RS, OUT OF CASH-BALANCE IN HAND, REDEPOSITION AFTER WITHDRA WAL, FROM BORROWINGS ETC. THE ASSESSEE HAS FILED ROI U/ S 44AF OF THE ACT. IN THE ABSENCE OF PROPER PROOF, THE A. O. HAS REJECTED THIS EXPLANATION OF THE ASSESSEE TREATING IT AS AN AFTER-THOUGHT. HOWEVER, HE HAS DETERMINED THE PEAK AMOUNT OF THESE DEPOSITS AT RS. 19,98,136/- AS UNDE R: 5 DATE DEBIT CREDIT CLOSING BALANCE 27.03.2009 16,53,727 28.03.2009 1,38,229 1,00,000 16,15,498 29.03.2009 16,15,498 30.03.2009 10,000 3,92,638 19,98,136 31.03.2009 75,000 19,23,136 THUS, HE HAS ADDED THE ENTIRE PEAK AMOUNT OF RS. 19,98,136/- U/S 69 OF THE ACT BY TREATING IT AS UNE XPLAINED INVESTMENT OF THE ASSESSEE. 2.5 THE LD. CIT(A) HAS ALSO AGREED WITH THE PEAK TH EORY BUT HE HAS WORKED OUT THE PEAK AT RS. 7,01,584/- AN D HAS SUSTAINED THIS ADDITION. AS PER THE LD. SR. DR, TH E PEAK DETERMINED BY THE A.O. AT RS. 19,98,136/- IS THE CO RRECT FIGURE. BUT AS PER THE LD. A.R., THE ASSESSEED FIG URE OF PEAK IS NOT CORRECT. HE HAS ALSO SUBMITTED THAT ALL THE DEPOSITS MADE IN THE BANK STAND FULLY EXPLAINED. T HE LD. CIT(A) SENT THE FOLLOWING WRITTEN SUBMISSIONS OF TH E ASSESSEE TO THE A.O: 6 A. THE ASSESSING OFFICER HAS GIVEN THE SOURCE OF COMPUTING THE PEAK AMOUNT OF RS. 1998136/- ( AS STO OD ON 30,03.2009 AS PER ASSESSING OFFICER) AND HE CLAI MED THAT THIS AMOUNT IS COMPUTED FROM ICICI BANK A/C NO . 016701551506 IS NOT CORRECT. THE CORRECT BALANCE ST OOD ON 30.03.2009 AT RS. 75063/-. THIS IS VERIFIABLE FR OM THE BANK STATEMENT ITSELF. THE COPY OF WHICH HAS BEEN FURNISHED. B. THE ASSESSING OFFICER SHOWED THE DEBIT I.E. WITHDRAWAL OF RS. 138229/-WHERE AS ZERO WITHDRAWAL IS FROM THE BANK ACCOUNT. C. FURTHER, ON 30.03.2009, THE ASSESSING OFF ICER HAS SHOWED RS. 3,92,638/-AS AMOUNT DEPOSITED IN THIS B ANK ACCOUNT WHERE AS THE CORRECT AMOUNT IS RS. 3,85,000 /- D. FURTHER, ON 30.03.2009, THE ASSESSING OFF ICER HAS SHOWED WITHDRAWAL IT) OF RS. 10000/- WHERE AS THE CORRECT WITHDRAWAL OF RS. 410000/- (DEBIT). E. FINALLY, THE CLOSING BALANCE OF THE BANK ACCOUNT IS ONLY RS. 63/- WHERE AS THE A.O. HAS STATED THE CLOS ING BALANCE OF RS. 1923136/- 7 2.6 THE ABOVE WRITTEN SUBMISSIONS WAS REFERRED TO T HE A.O. WITH A DIRECTION TO VERIFY THE DETAILS OF DEPO SITS AS WELL AS THE BANK STATEMENT AND THE WRITTEN SUBMISSI ONS. THE A.O. SUBMITTED THAT THE PEAK AMOUNT OF RS. 19,9 8,136 IN THE ASSESSMENT ORDER HAS BEEN ARRIVED AT FROM TH E DETAILS OF CASH IN HAND PRODUCED BY THE ASSESSEE DU RING THE ASSESSMENT PROCEEDINGS AND NOT FROM THE BANK ACCOUNT. THE A.O. ENCLOSED THE COPIES OF CASH-IN-H AND ACCOUNT AND THE BANK STATEMENT. IN THE BANK STATEM ENT, THE PEAK AMOUNT WAS SHOWN AT RS. 7,01,584/- AS ON 24.12.2008. THE A.O. HAS ACCEPTED THE WRITTEN SUBMI SSIONS OF THE ASSESSEE TO A GREATER EXTENT. THEREFORE, TH E LD. CIT(A) HAS AGREED WITH THIS PEAK FIGURE AND HAS SUS TAINED THE SAME. 2.7 THE CONTENTION OF THE ASSESSEE IS THAT ONCE THE BOOKS OF ACCOUNT ARE REJECTED, PEAK CANNOT BE COMPUTED. IT IS STATED THAT THE CASH SHEET ENCLOSED WITH THE REMAND REPORT IS ONLY THE CASH BALANCE AND IT CONSISTS OF SO MANY RECEIPTS AND PAYMENTS WHEREAS THE A.O. HAS NOT VERI FIED 8 THE SAME, THEREFORE, THE PEAK CASH-BALANCE ADOPTED FROM SUCH A CASH-SHEET IS NOT JUSTIFIED. IN SO FAR AS T HE APPEAL OF THE REVENUE IS CONCERNED, IT HAS NO MERITS BECAU SE THE A.O. HIMSELF HAS DETERMINED THE PEAK AT RS. 7,01,58 4/- AND HAS AGREED WITH THE SAME IN THE REMAND REPORT. THE LD. SR. DR CANNOT IMPROVE THE CASE OF THE A.O. BECA USE HE STEPS INTO THE A.OS SHOES. WHATEVER HAS BEEN ACCE PTED BY THE A.O. HIMSELF CANNOT BE NEGATIVE BY THE LD. D R. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE GROUND S OF REVENUES APPEAL. WE DISMISS THE SAME. 2.8 THE LD. A.R. HAS REPEATED THE SAME ARGUMENTS AS TAKEN BEFORE THE LD. CIT(A). AS PER THE GROUND OF REVENUE AS ON 28.04.2008, THERE WAS ZERO BALANCE IN THE ACC OUNT OF THE ASSESSEE. WE HAVE FOUND THAT THE FACTS GIVEN B Y THE ASSESSEE HAVE BEEN CONTROVERTED BY THE A.O. IN HIS REMAND REPORT, RATHER, HE HAS ACCEPTED THE SAME AS CORRECT. IN THE ASSESSMENT ORDER, HE HAS TAKEN THE PEAK FROM THE BANK ACCOUNT. BUT IN THE REMAND REPORT, H E HAS TAKEN THE PEAK FROM THE CASH SHEET, WHICH HAD BEEN 9 REJECTED DURING ASSESSMENT PROCEEDINGS. THE A.O. H AS NOT VERIFIED THE SAME AND HAS ADOPTED THE CASH BALANCE AS A PEAK. AS PER THE BANK STATEMENTS, IN THE RELEVANT ACCOUNT AS ON 24.12.2008, A PEAK AMOUNT IS SHOWN AS 7,01,58 4/-. THE ASSESSEE HAS BEEN PURSUING THE BUSINESS OF TRAD ING BUYING AND SELLING OF GREY CLOTH. AS PER THE ASSES SEE THE DEPOSITS IN THE BANK ACCOUNT ARE FROM VARIOUS RECEI PTS ON ACCOUNT OF SALES, COLLECTION FROM DEBTORS, ACCUMULA TED CAPITAL AND THESE DEPOSITS WERE ROTATING THROUGH TR ADING TRANSACTIONS. THE ASSESSEE DID PRODUCE THE BILLS I N SUPPORT OF TRADING TRANSACTIONS. THE ASSESSEE PRODUCED ALL RELEVANT BOOKS OF ACCOUNT. THE A.O. HAS OBSERVED AT PAGE 3 OF HIS ORDER AS UNDER: HOWEVER, TAKING RATIONAL APPROACH, PEAK AMOUNT OF DEPOSITS IN ACCOUNT NO. 0167-1551506 WITH THE ICICI BANK IS TAKEN TO BE REPRESENTING THE AMOUNT AS INTRODUCED OUT OF INCOME EARNED FROM UNDISCLOSED SOURCES, IN THIS CASE PEAK AMOUNT OF DEPOSITS ARRI VES AT RS. 19,98,136/-, I.E. THE BALANCE IN THE BANK ACCOUNT AFTER DEPOSIT ON 30.3.2009, AS UNDER: 10 DATE DEBIT CREDIT CLOSING BALANCE 27.03.2009 16,53,727 28.03.2009 1,38,229 1,00,000 16,15,498 29.03.2009 16,15,498 30.03.2009 10,000 3,92,638 19,98,136 31.03.2009 75,000 19,23,136 2.9 IN VIEW OF THE FOLLOWING REASONS, WE ARE OF THE CONSIDERED OPINION THAT NO ADDITION CAN BE MADE IN THIS ACCOUNT. THE REASONS ARE AS UNDER: A. THE ASSESSING OFFICER HAS GIVEN THE SOURCE OF COMPUTING THE PEAK AMOUNT OF RS. 1998136/- (STOOD O 30.03.2009 AS PER ASSESSING OFFICER AND HE CLAIMED THAT THIS AMOUNT IS COMPUTED FROM ICICI BANK A/C NO. 016701551506) IS NOT CORRECT. THE CORRECT BALANCE S TOOD ON 30.03.2009 AT RS 75063/- AS SUBMITTED ABOVE IN TABLE. THIS CAN BE VERIFIABLE FROM THE BANK STATEME NT. B. THE ASSESSING OFFICER SHOWED THE DEBIT I.E. WITHDRAWAL, RS. 138229/- WHERE AS ZERO WITHDRAWAL I S FROM THE BANK ACCOUNT. (THIS CAN ALSO BE VERIFIED F ROM THE BANK STATEMENT AS ENCLOSED HEREWITH.) 11 C. FURTHER, ON 30.03.2009, THE ASSESSING OFFICER HAS SHOWED RS. 392638/- AS AMOUNT DEPOSITED IN THIS BAN K ACCOUNT WHERE AS THE CORRECT AMOUNT IS RS. 385000/- . (THIS CAN ALSO BE VERIFIABLE FROM THE BANK STATEMEN T) D. FURTHER, ON 30.03.2009 THE ASSESSING OFFICER H AS SHOWED WITHDRAWAL (DEBIT) OF RS. 10000/- WHERE AS T HE CORRECT WITHDRAWAL OF RS 410000/- (DEBIT). E. FINALLY, THE CLOSING BALANCE OF THIS BANK ACCO UNT IS ONLY RS. 63/- WHERE AS THE ASSESSING OFFICER HAS ST ATED THE CLOSING BALANCE OF RS. 1923136/-. ACCORDINGLY, WE ORDER TO DELETE THE ENTIRE ADDITION AND ALLOW THE CROSS OBJECTION. 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 10 TH APRIL, 2014. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 10 TH APRIL, 2014 12 VL/- COPY TO: THE APPELLANT THE RESPONDENT THE CIT BY ORDER THE CIT(A) THE DR ASSISTANT REGISTRAR ITAT, JODHPUR