KAVITA RANGWANI, Jaipur V. ITO, Jaipur

ITA 725/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5628 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 29-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JHA CIT DHK
• Assessee Lawyers: SHRIK L MOOLCHANDANI
• Keywords: Peak credit
• Section: 143(3); 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 725/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 SMT. KAVITA RANGWANI, 4-BA-12, JAWAHAR NAGAR, JAIPUR CUKE VS. THE INCOME TAX OFFICER WARD, 6(1), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AATPR 5849 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRIK.L. MOOLCHANDANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA JHA. (ADDL. CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13.01.2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 16/01/2017. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-5, JAIPUR DATED 05.05.2016 WHEREIN THE ASSESSEE HAS CH ALLENGED LEVY OF PENALTY U/S 271(1)(C) ON THE ADDITIONS OF RS. 4,00,550/- SU STAINED BY THE COORDINATE BENCH IN THE QUANTUM PROCEEDINGS. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS FACTUALLY AND LEGALLY ERRED IN RESTRICTING THE PENA LTY LEVIED BY THE LD. AO U/S 271(1)(C) OF THE ACT ON THE FINALLY SUSTAINED A DDITION OF RS. 4,00,550/- WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE ALONGWITH HER HUSBAND WAS HAVING A JOINT OVERDRAFT ACCOUNT MAINTAINED WIT H AXIS BANK WHICH WAS OPERATED BY HER HUSBAND AND WHICH WAS NOT DISCLOSED TO THE DEPARTMENT. IN ITA NO. 725/JP/16 SMT. KAVITA RANGWANI VS. ITO, WARD 6(1), JAIPUR 2 THE ORDER U/S 143(3) THE AO ASSESSED THE ENTIRE CRE DIT BY WAY OF CHEQUE DEPOSIT IN THE SAID ACCOUNT AMOUNTING TO RS. 1,19,7 3,500/- AS INCOME OF THE ASSESSEE. ON APPEAL THE LD. CIT(A) HELD THAT THE C HEQUE DEPOSIT COULD NOT HAVE BEEN DOUBTED AS THESE FUNDS LOADS FROM THE OVERDR AFT FACILITY AVAILED BY THE HUSBAND OF THE APPELLANT AND THERE WAS ONLY ROTATIO N OF OVERDRAFT FUNDS WHEREBY THE FUNDS ADVANCED ON EARLIER DATES WERE RE CEIVED BACK AND THERE WERE NO FRESH DEPOSIT AND ALL THE CREDIT ENTRIES I N THE SAID BANK A COUNT FLOWED FROM THE BANK ACCOUNT ONLY. THE LD. CIT(A) FURTHE R HELD THAT EACH AND EVERY MAJOR CREDIT ENTRIES WAS EXPLAINED BY THE APPELLANT , HOWEVER, THE AO WAS NOT WILLING TO ACCORD ANY COGNISANCE TO THE EXPLANATION SUBMITTED BY HER. FURTHER THE LD. CIT(A) HAS HELD THAT EVEN IF THE VERSION OF THE APPELLANT IS IGNORED THEN ALSO THE AO COULD HAVE TAXED 0NLY THE PEAK BALANCE IN THE ALLEGED BANK A/C . BY NO STRETCH OF IMAGINATION THE AO WAS AUTHORISED TO TREAT THE ENTIRE CHEQUE DEPOSITS AS UNEXPLAINED. IN RESPECT OF UNEXPLAINED INCOME POSSIBLE REDUNDANCY OF THE SAME INCOME BEING CONSIDERED MOR E THAN ONCE IN COMPUTATION COULD BE AVOIDED BY TAKING ONLY THE PE AK CREDIT WHEN THERE WERE MANY CREDITS AND DEBITS D IN THE SAME BANK A C OUNT AND THE PEAK CREDIT WAS WORKED OUT TO RS. 8,01,050/- WHICH WAS UPHELD O UT OF RS.1,19,73,500/- ASSESSED BY THE AO AS INCOME OF THE ASSESSEE. 3. THE ASSESSEE CHALLENGED THE ADDITION OF RS. 8,01 ,050/- BEFORE THE COORDINATE BENCH WHEREBY THE COORDINATE BENCH HAS R EDUCED THE ADDITION TO RS. 4,00,550/-. WHILE RESTRICTING THE ADDITION TO RS. 4,00,550/- WHICH IS SUBJECT MATTER OF PENALTY BEFORE US. HERE IT WOULD BE RELE VANT TO NOTE THAT THE FINDINGS OF THE OORDINATE BE N CH WHILE RESTRICTING HE ADDITION TO RS. 4,00,550/- WHERE THE OORDINAE BEN CH HAS STATED THAT IN THE PE CULIAR BACKGROUND OF ASSESSEE BEING A HOUSE MAKER HAVING NO KNOWLEDGE OF CONSTRUCTION DEBIT AND ITA NO. 725/JP/16 SMT. KAVITA RANGWANI VS. ITO, WARD 6(1), JAIPUR 3 CREDIT ENTRIES IN THE BANK AND PROLONGED ILLNESS OF HER HUSBAND NON OF WHICH IS QUESTIONED BY THE LOWER AUTHORITIES. 4. IN THE LIGHT OF ABOVE DISCUSSION WE ARE OF THE V IEW THAT THE ASSESSEE HAS PROVIDED THE REASONABLE EXPLANATION REGARDING VAR IOUS CREDIT AND DEBIT ENTRIES IN THE BANK ACCOUNT MAINTAINED AND OPERATED BY HER HUSBAND, THE LEVY OF PENALTY IS NOT JUSTIFIABLE HENCE THE SAME IS DE LETED. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/01 /2017. SD/- SD/- (KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 16/01/2017 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. KAVITA RANGWANI, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD 6(1), JAIPUR 3. VK;DJ VK;QDR@ CIT II, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-II, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.725 /JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR. ITA NO. 725/JP/16 SMT. KAVITA RANGWANI VS. ITO, WARD 6(1), JAIPUR 4