RAJENDRAKUMAR S. RATHOD, MUMBAI V. ITO WD 18(1)(2), MUMBAI

ITA 7510/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0055 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 17-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINITA J MENOND R
• Keywords: Unexplained cash credit; Opportunity of being heard; Peak credit
• Section: 143(3); 133(6); 68

Judgement Text

P A G E | 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI R.C.SHARMA , AM AND SHRI RAVISH SOOD, JM ./ I.T.A . NO. 7510 /MUM/2014 ( / ASSESSMENT YEAR: 2010 - 11 ) SHRI. RAJENDRA S. RATHOD C/O. KARNAVAT & COM. 2A KITAB MAHAL, 1 ST FLOOR 192 DR. D.N. ROAD MUMBAI 400 001 / VS. THE INCOME TAX OFFICER WARD - 18(1)(2) ROOM NO. 104, 1 ST FLOOR PIRAMAL CHAMBER PAREL , MUMBAI 400 012 ./ ./ PAN/GIR NO. AAAPR8774N ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI ANUJ KISNA D WALA / RESPONDENT BY : SMT. VINITA J. MENON(D.R.) / DATE OF HEARING : 06/04 /2017 / DATE OF PRONOUNCEMENT : 21 /06/2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 29, MUMBAI, DATED 24.09.2014, WHICH I N ITSELF ARISES FROM THE ORDER PASSED BY THE A.O U/S. 143(3) OF THE INCOME TAX ACT, 1961, ( FOR SHORT ACT), DATED 05.03.2013. THE ASSESSEE P A G E | 2 ASSAILING THE ORDER OF THE CIT(A) HAD RAISED THE FOLLOWING G ROUNDS OF APPEAL BEFORE US: - 1. ON FACTS AND IN LAW, THE LEA RNED CIT (A) HAD ERRED IN CONFIRMING THE ADDITION OF RS.31 ,54,000/ - MADE BY THE ASSESSING OFFICER U/S.68 OF THE I.T. ACT. UNDER THE FACTS AND CIRCUMSTANCES OF THE MATTER, HE OUGHT NOT TO HAVE CONFIRMED THE SAME. 2. ON FACTS AND IN LAW, THE LEARNED CIT(A) HAD ERRED IN CONFIRMING THE ADDITION OF RS.1,70,000/ - MADE BY THE ASSESSING OFFICER AS UNEXPLAINED OPENING CASH BALANCE U/S.68 OF THE I.T. ACT. UNDER THE FACTS AND CIRCUMSTANCES OF THE MATTER, HE OUGHT NOT TO HAVE CONFIRMED THE SAME. 3. WITHOUT PREJUDICE TO GROUN D OF APPEAL NO.1 ABOVE, ON FACTS AND IN LAW, THE LEARNED CIT(A) HAD FAILED TO APPRECIATE THAT CASH WITHDRAWN/ CHEQUE ISSUED OUGHT TO HAVE BEEN CONSIDERED WHILE COMPUTING INCOME U/S.68 BEING THE DEPOSITS MADE IN THE BANK ACCOUNTS. 4. WITHOUT PREJUDICE TO GROUND OF APPEAL NO.2 ABOVE, ON FACTS AND IN LAW, THE LEARNED CIT(A) HAD FAILED TO APPRECIATE THAT MORE THAN RS.1,70,000/ - CASH WAS AVAILABLE TO THE APPELLANT DURING THE YEAR, HENCE NO ADDITION IN RESPECT OF THE OPENING CASH BALANCE OF RS.L ,70,000/ - OUGHT TO HAVE BEEN CONFIRMED BY THE LEARNED CIT(A). 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFORE OR AT, THE TIME OF HEARING OF THE APPEAL, SO AS TO ENABLE THE HON. ITAT TO DECIDE THIS APPEAL ACCORDING TO LAW. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE WHO I S A PART NER IN A FIRM, VIZ. M/S NANAK JEE RAYCHAND AND COMPANY AND DERIVING INCOME BY WAY OF SHARE OF PROFIT, REMUNERATION AND INTEREST ON CAPITAL FROM THE SAID FIRM HAD FILED HIS RETURN OF INCOME ON 31.03.2011 DECLARING AN INCOME OF RS.2,77,942/ - , WHICH WAS PROCESSED AS SUCH U/S. 143(1) OF THE ACT . THE CASE OF THE ASSESSEE WAS THEREAFTER TAKEN UP FOR SCRUTINY ASSESSMENT U/S. 143(2). 3. THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE VIDE HIS L E TTER DATED 12.06.2012 SUBMITTED BEFORE THE A.O THAT HE WAS HOLDING ONLY ONE S.B. ACCOUNT NO. 4605 WITH CITIZENS P A G E | 3 CREDIT COOPERATIVE BANK , BRANCH: DADAR, MUMBAI . HOWEVER, AS THE A.O WAS IN RECEIPT OF AIR INFORMATION THAT THE ASSESSEE HAD MADE A CASH DEPOSIT OF RS.31,54,000/ - WITH FEDERAL BANK LTD. , BRANCH : DADAR (WEST), MUMBAI, HE THEREFORE ISSUED A N OTICE U/S. 133(6 ) AND CALLED UPON THE BANK TO FURNISH THE COPIES OF THE BANK ACCOUNT S MAINTAINED BY THE ASSESSEE WITH THE BANK DURING THE PERIOD 01.04.2009 TO 31.03.2010. THAT PURSUANT TO THE AFORESAID NOTICE THE BANK FURNISHED A COPY OF THE STATEMENT OF SB ACCOUNT NO. 15050100036 852 HELD BY T HE ASSESSEE DURING THE PERIOD 01.04.2009 TO 31.03.2010. THAT A PERUSAL OF THE AFORESAID BANK ACCOUNT OF THE ASSESSEE REVEALED THAT A CASH DEPOSIT OF RS.4,01,000/ - WAS MADE IN THE SAID ACCOUNT DURING THE FINANCIAL YEAR 2009 - 10. THE A.O VIDE HIS L E TTER DATED 22.10.2012 CALLED UPON THE ASSESSEE TO FURNISH THE DETAILS OF HIS BANK ACCOUNT S INCLUDING THE S AVING BANK ACCOUNT S AND C URRENT ACCOUNT S WHICH WERE OPERATED BY HIM DURING THE YEAR , ALONG WITH THE COMPLETE BANK STATEMENT S . THE ASSESSEE IN HIS REPLY TO THE A FORESAID QUERY SO RAISED BY THE A.O , THEREIN SUBMITTED AS UNDER: - REPLY TO SR. NO.6 OF LETTER DATED 22.10.2012 I AM HAVING THE FOLLOWING SAVINGS BANK ACCOUNTS: - (A) SB A/C NO. 4605 WITH CITIZEN CREDIT CO - OPERATIVE BANK LTD DADAR BRANCH, MUMBAI. PHOTOCOPY OF THE BANK PASSBOOK FOR THE PERIOD 1.04.2009 TO 31.03.2010 IS ENCLOSED HEREWITH. (B) SB A/C NO. 15050100036852 WITH THE FEDERAL BANK LTD. PHOTOCOPY OF THE BANK PASSBOOK FOR THE PERIOD 1.04.2009 TO 31.03.2010 ARE ENCLOSED HEREWITH. (C) I AM HAVING THE AFORESAID T WO SB ACCOUNTS AND NO CURRENT ACCOUNT IS BEING OPERATED. P A G E | 4 THE ASSESSEE FURTHER EXPLAINING THE SOURCE OF THE CASH DEPOSIT OF RS.4,01,000/ - IN HIS SB A CCOUNT NO. 15050100036 852 WITH FEDERAL BANK LTD, BRANCH; DADAR (WEST), MUMBAI, THEREIN SUBMITTED THAT THE SAME WAS FUNDED OUT OF AN OPENING CASH BALANCE OF RS.1,70,000/ - AVAILABLE WITH HIM, WHILE FOR THE BALANCE AMOUNT WAS DEPOSITED OUT OF THE WITHDRAWALS MADE BY HIM FROM THE SAME BANK ACCOUNT. THUS THE ASSESSEE TILL 08.0 1 .2 013 TRIED HIS LEVEL BEST TO IMPRESS UPON THE A.O THAT HE WAS HOLDING ONLY TWO BANK ACCOUNTS, VIZ. (I) S.B. A CCOUNT NO. 4605 WITH CITIZEN CREDIT COOPERATIVE BANK , BRANCH: DADAR , MUMBAI ; AND (II) S.B. A CCOUNT NO. 1505010003 6 852 WITH FEDERAL BANK LTD, BRANCH : DADAR (WEST), MUMBAI. 4. THE A.O HOWEVER IN THE BACKDROP OF THE AIR INFORMATION IN HIS POSSESSION, WHICH REVEALED THAT THE ASSESSEE HAD MADE A CASH DEPOSIT OF RS.31,54,000/ - WITH FEDERAL BANK LTD, BRANCH : DADAR (WEST), MUMBAI, THEREFORE REFERRING TO THE SAID INFORMATION CALLED UPON THE ASSESSEE TO EXPLAIN THE CASH DEPOSIT OF RS.31,54,000/ - WHICH WAS DEPOSITED BY THE ASSESSEE WITH FEDERAL BANK LTD. THE ASSESSEE VIDE HIS REPLY DATED 08.01.2013 DECLINED OF HAV ING MADE A CASH DEP OS IT OF RS.31,54,000/ - WITH F EDERAL BANK LTD. , AND PERSISTED THAT HE HAD ONLY DEPOSITED AN AMOUNT OF RS.4,01,000/ - IN HIS ACCOUNT HELD WIT H THE SAID BANK. THE REPLY OF THE ASSESSEE SO FURNISHED WITH THE A.O IS REPRODUCED AS UNDER: - 7. PLEASE REFER TO THE AIR IN WHICH YOUR HONOUR HAS STATED THAT CASH OF RS.31,54,000/ - WAS DEPOSITED IN FEDERAL BANK LTD. IN THIS CONNECTION, PLEASE NOTE THAT I HAVE DEPOSITED RS.4,01,0001 / - IN FEDERAL BANK LTD AS CAN BE SEEN FROM BANK STATEMENT. THE SAME IS DEPOSITED OUT OF MY OPENING CASH BALANCE AND WITHDRAWALS FROM THE SAME BANK. AS SUCH, I AM NOT IN A POSITION TO KNOW HOW THE A FORESAID FIGURE OF RS.31,54,000/ - P A G E | 5 HAS BEEN CONSIDERED IN AIR . I REQUEST YOU TO GIVE ME A COPY OF AIR.' 5. THE ASSESSEE THEREAFTER AGAIN VIDE HIS LETTER DATED . 21.01.2013 DECLINED OF HAVING MADE ANY CASH DEPOSIT OF RS. 31,54,000/ - WITH FEDERAL BANK LTD. THE ASSESSEE VIDE HIS AFORESAID REPLY FURTHER SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION HE WAS NOT DOING ANY BUSINESS IN HIS PERSONAL CAPAC ITY. THE LATTER PART OF THE REPLY OF THE ASSESSEE WHICH SHALL HAVE A STRONG BEARING ON THE ADJUDICATION OF THE ISSUE UNDER CONSIDERATION , AS IS PLACED AT SR. N O.1 OF HIS AFORESAID LETTER DATED 21.01.2013, IS REPRODUCED AS UNDER: - I AM NOT DOING ANY BUSINE SS IN MY PERSONAL CAPACITY AND ACCORDINGLY, NO BOOKS OF ACCOUNTS ARE REQUIRED TO BE MAINTAINED U/S.44AA OF THE I.T. ACT 1961. ACCORDINGLY, NO CAPITAL ACCOUNT AND BALANCE SHEET IS BEING PREPARED FOR THE YEAR AND LAST TWO YEARS. THUS THE ASSESSEE DESPITE BEING CONFRONTED WITH THE AIR INFORMATION , WHICH REVEALED THAT A CASH DEPOSIT OF RS.31,54,000/ - WAS MADE BY HIM WITH FEDERAL BANK LTD, HOWEVER CONSISTENTLY DECLINED OF HAVING DEPOSIT ED ANY SUCH AMOUNT , AND THROUGHOUT CAME FORTH WI TH AN EXPLANATION ONLY IN RESPECT OF THE SUM OF RS.4,01,000/ - (SUPRA) DEPOSITED BY HIM IN HIS SB A CCOUNT NO. 1505010003 6 852 WITH FEDERAL BANK LTD, MUMBAI. THE ASSESSEE IN HIS AFORESAID REPLY DATED. 21.01.2013, EXPLAINING THE SOURCE OF RS.4,01,000/ - (S UPRA) D EPOSITED IN HIS BANK ACCOUNT, THEREIN SUBMITTED THAT THE SAME WAS COMPRISED OF AN OPENING CASH BALANCE OF RS.1,70,000/ - AS ON 01.04.2009, WHICH WAS CLAIMED TO BE AVAILABLE WITH HIM FOR THE LAST MORE THAN 7 - 8 YEARS . 6. THAT AS THE A.O WAS IN RECEIPT OF AN AIR INFORMATION THAT A CASH DEPOSIT OF RS.31,54,000/ - WAS MADE BY THE ASSESSEE DURING THE P A G E | 6 FINANCIAL YEAR 2009 - 10 WITH FEDERAL BANK LTD , BRANCH DADAR (WEST), MUMBAI, HE THEREFORE ONCE AGAIN ISSUED A NOTICE UNDER SECTION 133(6), DATED 15.01.2013 TO THE BANK, THIS TIME CALLING UPON THE BANK TO FURNISH THE DETAILS OF THE ACCOUNT WHERE THE AMOUNT OF RS.31,54,000/ - (SUPRA) WAS DEPOSITED BY THE ASSESSEE , AS PER THE AIR FILED BY THE B ANK. THE B ANK IN RESPONSE TO THE AFORESAID NOT ICE FURNISHED WITH THE A.O A COPY OF THE SB A CCOUNT NO. 15050100030087 WHICH WAS HELD BY THE ASSESSEE WITH THE BANK DURING THE PERIOD 01.04.2009 TO 20.07.2009. THAT A PERUSAL OF THE SB ACCOUNT NO. 15050100030087 WHICH WAS NOW MADE AVAILABLE BY THE BANK TO THE A.O, THEREIN REVEALED THAT THE ASSESSEE HAD NOT ONLY MADE A CASH DEPOSIT OF RS.31, 19 ,000/ - IN THE SAID ACCOUNT , BUT HAD ALSO DEPOSITED VARIOUS CHEQUES AGGREGATING TO RS. 2 0 ,37,955/ - DURING THE YEAR UNDER CONSIDERATION . THE A.O ON THE BASIS OF THE AFORESAID INFORMATION , THEREIN VIDE HIS L E TTER DATED 24.01.2013 CALLED UPON THE ASSESSEE TO EXPLAIN THE SOURCE OF THE CASH DEPOSIT OF RS.31,19,000/ - (SUPRA), AS WELL AS THE OTHER DEPOSITS AGGREGATING TO RS.20,37,955/ - (SUPRA) . TH E A.O THUS IN THE BACKDROP OF THE FACT THAT THE ASSESSEE TILL DATE HAD DENIED OF HAVING MADE ANY CASH DEPOSIT OF RS. 31,54,000/ - (SUPRA) WITH FEDERAL BANK LTD., BRANCH: DADAR (WEST), MUMBAI, THUS CALLED UPON HIM TO SHOW CAUSE AS TO WHY THE SUM TOTAL OF THE AFORESAID DEPOSITS AGGREGATING TO RS. 51 ,5 6 ,955/ - (RS.31,19,000/ - (+) RS. 20,37,955/ - ) MAY NOT BE TREATED AS AN UNEXPLAINED CASH CREDIT I N HIS HANDS U/S. 68 OF THE ACT . 7. THE ASSESSEE IN REPLY TO THE AFORESAID SHOW CAUSE NOTICE ISSUED BY THE A.O, THEREIN VIDE HIS L E TTER DATED 18.02.2013 SUBMITTED T HAT THE AMOUNT OF RS.31,19,000/ - (SUPRA) REPRESENTED THE CASH SALES PERTAINING TO HIS BUSINESS OF RETAIL TRADE OF G OLD O RNAMENTS CARRIED ON BY HIM AS A SOLE PROPRIETOR DURI NG THE YEAR UNDER CONSIDERATION, UNDER THE NAME AND STYLE OF M/S. R A JENDRA ENTERPRISES. THE ASSESSEE FURTHER P A G E | 7 EXPLAINING THE DEPOSITS OF RS.20,37,955/ - (SUPRA) THEREIN CAME FORTH WITH AN EXPLANATION AS REGARDS THE SAME, A S UNDER: - CHEQUES DEPOSITED 1,05,8 00 / - CHEQUE DEPOSITED, BUT REJECTED/RETURNED BY THE BANK 16,82,150 / - CHEQUE ISSUED, BUT REJECTED/RETURNED BY THE BANK 2,50,000 / - BANK INTEREST 5 / - THE ASSESSEE FURTHER IN CONTRADICTION OF HIS EARLIER EXPLANATION AS REGARDS THE SOURCE OF CASH DEPOSIT OF RS.4,01,000/ - (SUPRA) IN HIS SB ACCOUNT NO. 15050100036852 WITH FEDERAL BANK LTD., BRANCH: DADAR (WEST), MUMBAI, NOW VIDE HIS AFORESAID REPLY RELATED THE SAME WITH THE CASH SALES OF HIS AFORESAID SOLE PROPRIETARY BUSINESS. 8. THE A.O AF TER DELIBERATING ON THE EXPLANATION OF THE ASSESSEE AS REGARDS THE CASH DEPOSITS MADE BY HIM IN HIS AFORESAID BANK ACCOUNTS WITH FEDERAL BANK LTD., BRANCH: DADAR (WEST), MUMBAI, VIZ. SB ACCOUNT NO. 15050100036852 AND SB ACCOUNT NO. 15050100030087, THEREIN HELD AS UNDER: - (I). SB ACCOUNT NO. 15050100030087 (CASH DEPOSIT : RS. 31,19,000/ - ) : THE A.O BEING OF THE VIEW THAT THE ASSESSEE HAD THROUGHOUT TR IED TO CONCEAL THE FACT THAT HE WAS MAINTAINING SB A CCOUNT NO. 15050100030087 WITH FEDERAL BANK LTD., BRAN CH: DADAR (WEST), MUMBAI , AND HAD FURTHER CATEGORICALLY AVERRED THAT HE WAS NOT CARRYING ON ANY BUSINESS IN HIS PERSONAL CAPACITY , THEREFORE DID NOT FIND FAVO U R WITH THE CLAIM OF THE ASSESSEE THAT THE CASH DEPOSIT OF RS.31,19,000/ - (SUPRA) MADE IN HIS AFORESAID BANK ACCOUNT WAS RELATABLE TO THE SALES OF HIS BUSINESS OF R ETAIL T RADE O F G OLD O RNAMENTS , CARRIED ON U NDER THE NAME AND STYLE OF M/S. R A JENDRA ENTERPRISES . THE A.O THUS CATEGORICALLY OBSERVING THAT THE CLAIM OF THE ASSESSEE AS REGARDS TH E N ATURE AND S OURCE OF THE CASH DEPOSIT OF RS. P A G E | 8 31,19,00 0 / - HAD REMAINED UNSUBSTANTIATED , THEREFORE TREATED THE SAME AS UNEXPLAINED CASH CREDIT U/S. 68 IN THE HANDS OF THE ASSESSEE. (II). SB ACCOUNT NO.15050100030087 ( CHEQUE DEPOSIT : RS. 20,37,955/ - ) : THE A. O FURTHER BEING OF THE VIEW THAT THE EXPLANATION OF THE ASSESSEE THAT THE BANK DEPOSITS OF RS.20,37,955/ - (SUPRA) COMPRISED OF TWO C HEQUES OF RS.16,82,150/ - AND RS.2,50,000/ - , BOTH OF WHICH HAD BEEN REJECTED/RETURNED BY THE BANK , THERE FORE HELD THAT THE VERY RECEIPT OF THE AFORESAID RESPECTIVE AMOUNTS THEREIN FORTIFIED THE FACTUM OF TH E RE BEING A CORRELATING INCOME . THE A.O THUS ON THE BASIS OF HIS AFORESAID OBSERVATIONS MADE AN ADDITION OF RS.20,37,950/ - IN THE HANDS OF THE ASSESSEE U/S 68. (III). SB ACCOUNT NO. 15050100036852 ( CASH DEPOSIT : RS. 1,70,000/ - ) : THE A.O BEING OF THE VIEW THAT THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE SOURCE OF THE O PENING CASH BALANCE OF RS.1,70,000/ - (SUPRA), WHICH WAS CLAIMED BY HIM TO HAVE BEEN UTILIZED FOR MAKING THE CASH DEPOSIT TO THE SAID EXTENT IN HIS AFORESAID BANK ACCOUNT, THEREFORE , MADE AN ADDITION OF RS. 1,70,000/ - IN THE HANDS OF THE ASSESSEE. 9 . THE ASSESSEE BEING AGGRIEVED WITH THE ASSESSMENT THEREIN ASSAILED THE SAME BEFORE THE CIT(A). THE CIT(A ) ACCEPTED THE CONTENTIONS OF THE ASSESSEE THAT THE CHEQUES WHICH WERE DEPOSITED AND SUBSEQUENTLY REJECTED COULD NOT BE TAKEN AS PART OF THE INCOME OF THE ASSESSEE , BECAUSE THE SAID AMOUNT S HAD NEVER CAME TO THE ASSESSEE DUE TO THE REJECTION OF THE PAYMENTS AGAINST THE CHEQUES ISSUED. THE CIT(A) FURTHER GOING BY THE CONTENTION OF THE ASSESSEE THAT THE RE WERE CERTAIN OTHER ENTRIES IN HIS SB A CCOUNT NO. 15050 100036852 WITH FEDERAL BANK LTD , WHICH TOO WERE SUBSEQUENTLY REVERSED AND REJECTED, THERE FORE DIRECTED THE A. O TO MAKE NECESSARY VERIFICATION FROM THE BANK AND DELETE THE ADDITIONS RELATABLE TO THE P A G E | 9 CHEQUES WHICH WERE FOUND TO BE REJECTED IN THE ACCOUNT DURING THE YEAR . THE CIT(A) HOWEVER NOT FINDING FAVOUR WITH THE EXPLANATION OF THE ASSESSEE AS R EGARDS THE SOURCE OF RS. 1,70,000/ - AND RS.31,54,000/ - , THEREIN HOLDING A CONVICTION THAT THE ASSESSEE HAD FAILED TO COME UP WITH A PLAUSIBLE EXPLANATION AS REGARDS THE NATURE AND SOURCE OF THE SAID RESPECTIVE CASH DEPOSITS, THEREFORE REJECTED THE SAME AND UPHELD THE ADDITION MADE BY THE A.O . H OWEVER , THE CIT(A) IN THE BACKDROP OF THE CONTENTION OF THE ASSESSEE THAT THE AGGREGATE OF THE CASH DEPOSITS IN HIS BANK ACCOUNT NO. 1505010030087 (SUPRA) AMOUNTED TO RS.31,19,000/ - , WHILE FOR THE SAME HAD BEEN TAKEN AT RS.31,54,000/ - , THEREFORE DIRECTED THE A.O TO VERIFY THE FACTUAL POSITION AND ALLOW THE APPROPRIATE REL I EF IN THE HANDS OF THE ASSESSEE. THUS IN THE LIGHT OF THE AFORESAID OBSERVATIONS THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 10 . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD THEREIN CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R ) FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. IT WAS FURTHER SUBM ITTED BY THE LD. A.R. THAT EVEN IF THE EXPLANATION OF THE ASSESSEE AS REGARDS THE N ATURE AND S OURCE OF THE CASH DEPOSIT OF RS.1,70,000/ - IN THE S.B. A CCOUNT NO. 15050100036852 (SUPRA) AND RS.31,19,000/ - IN THE S.B. A CCOUNT NO. 1505010030087 (SUPRA) WAS NOT TO BE ACCEPTED, THE N KEEPING IN VIEW THE AVAILABILITY OF CASH WITHDRAWALS WITH THE ASSESSEE AT THE TIME OF MAKING THE SUBSEQUENT DEPOSIT IN THE ACCOUNT, THE A.O MAY BE DIRECTED TO RESTRICT THE ADDITIONS IN THE BACKDROP OF THE PE AK CREDIT THEORY. IT WAS THUS AVERRED BY THE LD. A.R. THAT THE A.O HAD GRAVELY ERRED IN TREATING THE AGGREGATE OF THE CASH DEPOSIT S AS THE UNEXPLAINED INCOME OF THE ASSESSEE. THE LD. A.R. IN ORDER TO DRIVE HOME HIS AFORESAID CONTENTION RELIED ON A HOST OF JUDICIAL PRONOUNCEMENT S. PER CONTRA, IT WAS P A G E | 10 SUBMITTED BY THE LD. D.R. THAT THE ASSESSEE HAD NEVER DISCLOSED THE FACT THAT HE WAS HOLDING S.B. ACCOUNT NO. 1505010030087 WITH FEDERAL BANK LTD, BRANCH : DADAR (WEST), MUMBAI. IT WAS AVERRED BY THE LD. D.R THAT DESPITE T HE FACT THAT A COPY OF THE AIR INFORMATION WAS MADE AVAILABLE TO THE ASSESSEE , WHICH THEREIN CATEGORICALLY REVEALED THAT THE DEPARTMENT WAS IN POSSESSION OF INFORMATION THAT A CASH DEPOSIT OF RS.31,54,000/ - WAS MADE BY THE ASSESSEE W ITH FEDERAL BANK LTD. , BRANCH : DADAR (WEST), MUMBAI, THE LATTER CONTINUED MISLEADING THE DEPARTMENT AND AVERRED THAT HE HAD ONLY DEPOSITED AN AMOUNT OF RS.4,01,000/ - IN HIS S.B. A CCOUNT NO. 15050100036852 WITH THE SAID BANK. IT WAS THUS SUBMITTED BY THE LD. D.R THAT THE ASSESSEE DESPITE BE ING CORNERED BY THE DEPARTMENT HOWEVER DID NOT COME UP WITH CLEAN HANDS AND PLACE THE TRUE FACTS BEFORE THE A.O , BUT RATHER ON THE CONTRARY LEFT NO STONE UNTURNED FOR MISLEADING THE A.O . THE LD. D.R FURTHER SUBMITTED THAT THE EXPLANATION OF THE ASSESSEE THAT THE CASH DEPOSITS OF RS.31, 19 ,000/ - (SUPRA) AND RS.1,70,000/ - (SUPRA) REPRESENTED THE SALE PROCEEDS OF HIS RETAIL TRADE BUSINESS IN G OLD O RNAMENTS CARRIED ON UNDER THE NAME AND STYLE OF M/S. RAJENDRA ENTERPRISES DURING THE YEAR UNDER CONSIDER ATION, WAS MERELY AN EYE WASH AND THUS COULD NOT BE ACCEPTED . THE LD. D.R SUBMITTED THAT NOT ONLY THE ASSESSEE HAD FAILED TO SUBSTANTIATE HIS EXPLANATION BY PLACING ON RECORD ANY MATERIAL IN SUPPORT THEREOF , BUT RATHER TILL 21.01.2013 (SUPRA) HE HAD CONSIS TENTLY BEEN STATING IN HIS REPL IES FURNISH ED WITH THE A.O THAT HE WAS NOT DOING ANY BUSINESS IN HIS PERSONAL CAPACITY. IT WAS THUS AVERRED BY THE LD. D.R THAT THE EXPLANATION OF THE ASSESSEE WAS NOT ONLY D EVOID AND BEREFT OF ANY FORCE , BUT RATHER BEING IN SERIOUS CONTRADICTION OF HIS AVERMENTS MADE BEFORE THE A.O, HAD THUS RIGHTLY BEEN REJECTED BY THE LOWER AUTHORITIES . THE LD. D.R. REVERTING TO THE CONTENTIONS RAISED BY THE ASSESSEE THAT THE ADDITION MAY BE RESTRICTED TO THE AMOUNT WORKED OUT ON THE BASIS OF P EAK CREDIT THEORY , THEREIN P A G E | 11 SUBMITTED THAT NO SUCH PLEA WAS EVER RAISED BY THE ASSESSEE BEFORE THE LOWER AUTHOR ITIES. THE LD. D.R THUS VEHEMENTLY SUBMITTED THAT IN THE BACKDROP OF THE FACTS OF THE CASE THE APPEAL OF THE ASSESSE E DESERVED TO BE DISMISSED. 11. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVE S FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOW E R AUTHORITIES AND THE MATERIAL PRODUCED BEFORE US, AS WELL AS THE JUDICIAL PRONOUNCEMENT RELIED UPON BY THE LD. A.R . WE FIND T HAT THERE IS NO ESCAPE FROM THE FACT THAT THE ASSESSEE SINCE INCEPTION OF THE ASSESSMENT PROCEEDINGS HAD FURNISHED INACCURATE DETAILS WITH RESPECT TO THE BANK ACCOUNT S HELD BY HIM DURING THE YEAR UNDER CONSIDERATION . THAT THE ASSESSEE VIDE HIS L E TTER DATED 12.06.2012 WHICH WAS FILED WITH THE A.O ON 14.06.2012 , HAD INITIALLY SUBMITTED THAT HE WAS HOLD ING ONLY ONE BANK ACCOUNT, VIZ. SB ACCOUNT NO. 4605 WITH CITIZEN CREDIT COOPERATIVE BANK LTD., BRANCH: DADAR, MUMBAI, AND BY SO DOING HAD TRIED HIS LEVEL BEST T O WITHHOLD INFORMATION IN RESPECT OF THE BANK ACCOUNT S WHICH WERE HELD BY HIM WITH FEDERAL BANK LTD., BRANCH : DADAR (WEST), MUMBAI. WE FIND THAT THE A.O WHO WAS HAVING BEFORE HIM THE AIR INFORMATION THAT THE ASSESSEE HAD MADE A CASH DEPOSIT OF RS.31,54,000 / - WITH FEDERAL BANK LTD., BRANCH : DADAR (WEST), MUMBAI , THEREIN ISSUE D A N OTICE U/S. 133(6) TO THE BANK AND GATHERED INFORMATION ABOUT THE SB A CCOUNT NO. 15050100036852 HELD BY THE ASSESSEE WITH THE BANK . WE FIND THAT WHEN THE A.O CONFRONTED THE SAID FACT TO THE ASSESSEE, THE LATTER VIDE HIS REPLY DATED. 06.10.2012 STILL DID NOT DIVULGE DETAILS ABOUT THE OTHER SB ACCOUNT NO. 1505010030087 , WHICH TOO WAS MAINTAINED BY HIM WITH THE SAME BANK DURING THE YEAR UNDER CONSIDERATION , AND RATHER RESTRICTED HIS EXPL ANATION WITH RESPECT TO THE CASH DEPOSIT OF RS.4,0 1 ,000/ - (SUPRA) MADE IN HIS SB ACCOUNT NO. 15050100036852 (SUPRA). WE FIND THAT EVEN WHEN THE A.O VIDE HIS L E TTER DATED 22.10.2012 BROUGHT THE FACT TO THE NOTICE OF THE ASSESSEE P A G E | 12 THAT HE WAS IN POSSESSION OF AIR INFORMATION THAT HE HAD MADE A CASH DEPOSIT OF RS.31,54,000/ - (SUPRA) WITH FEDERAL BANK, BRANCH : DADAR (WEST), MUMBAI, AND CALLED UPON THE ASSESSEE TO PUT FORTH AN EXPLANATION AS REGARDS THE SAME, THE ASSESSEE STILL DID NOT MAKE ANY SHIFT FROM HIS EARLIER STAND AND DENIED OF HAVING MADE ANY SUCH CASH DEPOSIT IN HIS BANK ACCOUNT WITH FEDERAL BANK LTD (SUPRA) AND RESTRICTED HIS EXPLANATION AS REGARDS THE CASH DEPOSIT OF RS.4,01,000/ - MADE IN HIS SB A CCOUNT NO.15050100036852 DUR ING THE YEAR UNDER CONSIDERATION . TH US FROM A CURSORY GLANCE OVER THE AFORESAID CHAIN OF EVENTS , IT CAN SAFELY BE GATHERED THAT THE ASSESSEE HAD TRIED H IS LEVEL BEST TO STALL THE ENQUIRIES BEING MADE BY THE A.O , SO THAT THE LATTER MAY NOT GATHER INFORMATI ON ABOUT THE BANK ACCOUNTS WHICH THE ASSESSEE WAS HOLDING WITH FEDERAL BANK LTD. HOWEVER , WE FIND THAT IT WAS ONLY WHEN THE A.O WHO WAS IN POSSESSION OF THE AIR INFORMATION WHIC H REVEALED THAT THE ASSESSEE HAD MADE A CASH DEPOSIT OF RS. 31,54,000/ - (SUPRA) WITH FEDERAL BANK, BRANCH: DADAR (WEST), MUMBAI, BEING NOT SATISFIED WITH THE REPLIE S OF THE ASSESSEE, THEREIN CALLED UPON THE BANK TO FURNISH DETAILS OF THE BANK ACCOUNT WHERE RS.31,54,000/ - WAS DEPOSITED BY THE ASSESSEE AS PER THE AIR SUBMITTED BY THE BANK, THAT THE BANK CAME FORTH WITH THE INFORMATION ABOUT THE SB. ACCOUNT NO. 15050100030087 WHICH WAS HELD BY THE ASSESSEE DURING THE PERIOD 01.04.2009 TO 20.07.2009. THUS, IT WAS ONLY WHEN THE A.O VIDE HIS SHOW CAUSE NOTICE DATED. 24.01.2013 CONFRONTED THE SB ACCOUNT NO. 15050100030087 TO THE ASSESSEE AND CALLED UPON HIM TO EXPLAIN AS TO WHY THE AGGREGAT E OF THE CREDITS OF RS.51,56 ,955/ - (RS.31,19,000/ - (+) RS. 20,37,955/ - ) MAY NOT BE TREATED AS AN UNEXPLAINED CASH CREDIT I N HIS HANDS U/S. 68, THAT THE ASSESSEE FOR THE VERY FIRST TIME VIDE HIS LETTER DATED. 18.02.2013 ACCEPTED THE FACT THAT HE WAS HOLDING THE SAID BANK ACCOUNT DURING P A G E | 13 THE YEAR UNDER CONSIDERATION, AS WELL AS CAME FORTH WITH AN EXPLANATION AS REGARDS THE CREDITS APPEARING THEREIN. 12 . WE A RE OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE FACTS AS HAD BEEN LOOKED INTO BY US AT LENGTH HEREINABOVE, NOW WHEN THE ASSESSEE HAD HIMSELF DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS SUBMITTED BEFORE THE A.O IN CLEAR AND UNEQUIVOCAL TERMS THAT HE WAS NOT CARRYING ON ANY BUSINESS IN HIS PERSONAL CAPACITY, THEREFORE THE SUBSEQUENT EXPLANATION OF THE ASSESSEE THAT THE CASH DEPOSITS OF RS. 31,19,000/ - (SUPRA) IN HIS SB. ACCOUNT NO. 15050100030087 WITH FEDERAL BANK LTD. (SUPRA) WERE THE SALE PROCEEDS OF HIS SOLE PROPRIETARY RETAIL TRADE BUSINESS IN GOLD ORNAMENTS CARRIED ON UNDER THE NAME AND STYLE OF M/S. RAJENDRA ENTERPRISES DURING THE YEAR UNDER CONSIDERATION, CLEARLY MILITATE S AGAINST HIS AFORESAID AVERMENT, AND THUS AS HELD BY THE CIT(A), DOES NOT MERIT ACCEPTANCE. WE CONCUR WITH THE WELL REASONED OBSERVATIONS OF THE CIT(A) AND THUS HOLD THAT AS THE EXPLANATION OF THE ASSESSEE AS REGARDS THE CASH DEPOSIT OF RS. 31,19,000/ - (SUPRA) MADE IN HIS AFORESAID BANK ACCOUNT, VIZ. SB. ACCOUNT NO. 1505010 0030087 DURING THE YEAR UNDER CONSIDERATION IS BEYOND COMPREHENSION AND INSPIRE S NO CONFIDENCE, THEREFORE THE SAME HAD RIGHTLY BEEN REJECTED BY THE LOWER AUTHORITIES. WE ALSO FIND OURSELVES TO BE IN AGREEMENT WITH THE OBSERVATIONS OF THE LOWER AUTHORITIES, AND ARE OF THE CONSIDERED VIEW T HAT THE SHIFTING EXPLANATION OF THE ASSESSEE WITH RESPECT TO THE NATURE AND SOURCE OF THE CASH DEPOSIT OF RS . 1,70,000/ - MADE IN HIS SB ACCOUNT NO. 15050100036852 WITH FEDERAL BANK LTD. (SUPRA) ALSO HAD RIGHTLY BEEN REJECTE D BY THE LOWER AUTHORITIES . WE FIND THAT INITIALLY THE ASSESSEE IN HIS REPLY TO THE LETTER DATED 22.12.2012 OF THE A.O HAD CLAIMED THAT THE CASH DEPOSIT O F RS. 1,70,000/ - IN THE AFORESAID BANK ACCOUNT WAS FUNDED OUT OF THE O PENING CASH IN HAND LYING AVAILA BLE WITH HIM FOR TH E LAST 7 TO 8 YEARS, AND FOR LONG STUCK TO HIS SAID UNSUBSTANTIATED P A G E | 14 EXPLANATION. WE HOWEVER FIND THAT THEREAFTER THE ASSESSEE AT S.NO. 2(A) OF HIS LETTER DATED 18.02.2013 THEREIN SHIFTED FROM HIS EARLIER EXPLANATION , AND SUBMITTED THAT THE ENTIRE AMOUNT OF RS. 4,01,000/ - (WHICH INCLUDED RS. 1,70,000/ - ) DEPOSITED IN HIS SB ACCOUNT NO.15050100036852 WAS OUT OF THE SALE PROCEEDS OF HIS RETAIL TRADE BUSINESS IN GOLD ORNAMENTS. WE THUS IN THE BACKDROP OF OUR AFORESAID OBS ERVATIONS ARE NOT AT ALL IMPRESSED BY THE EXPLANATION OF THE ASSESSEE, EITHER AS REGARDS THE SOURCE OF R S 31,19,000/ - (SUPRA) OR RS. 1,70,000/ - (SUPRA) , AND THEREFORE UPHOLD THE OBSERVATIONS OF THE CIT(A) TO THE SAID EXTENT. 13. WE SHALL NOW TEST THE CLAIM O F THE LD. A.R THAT IF THE EXPLANATION AS REGARDS THE SOURCE OF THE CASH DEPOSIT OF RS. 31,19,000/ - (SUPRA) AND RS. 1,70,000/ - (SUPRA) IS NOT TO BE ACCEPTED, EVEN THEN THE ADDITION IN THE HANDS OF THE ASSESSEE IS LIABLE TO BE RESTRICTED TO THE AMOUNT AS STANDS WORKED OUT ON THE BASIS OF THE PEAK CREDIT THEORY. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE PRESENT CASE , AND AS OBSERVE D BY US HEREINABOVE, NOT BEING INSPIRED WITH THE EXPLANATION OF THE ASSESSEE AS REGARDS THE SOURCE OF THE CREDITS IN THE RESPECTIVE BANK ACCOUNTS, HAD THUS REJECT ED THE SAME. HOWEVER, WE FIND FORCE IN THE CONTENTION OF THE LD. A.R THAT EVEN IF THE EXPLANAT ION AS REGARDS THE SOURCE OF CASH DEPOSITS DOES NOT MERIT ACCEPTANCE, STILL THE ADDITION IN THE HANDS OF THE ASSESSEE WAS LIABLE TO BE RESTRICTED BY TELESCOPING THE CASH DEPOSITS MADE IN THE BANK ACCOUNTS AS AGAINST THE RESPECTIVE CASH WITHDRAWALS MADE FRO M THE SAME ON THE RESPECTIVE DATES DURING THE YEAR UNDER CONSIDERATION. THE LD. A.R HAD DRAWN OUR ATTENTION TO A CHART REFLECTING THE RESPECTIVE CASH DEPOSITS AND CASH WITHDRAWALS MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, AS PER WHICH T HE PEAK CREDIT ADDITION IN THE HANDS OF THE ASSESSEE WOULD STAND RESTRICTED TO RS. 3,52,110/ - . WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CAS E IN THE BACKDROP OF THE P A G E | 15 CONTENTIONS RAISED BY THE ASSESSEE BEFORE US , AND ARE OF THE CONSIDERED VIEW THAT THOUGH THE PEAK CREDIT THEORY IS NOT A PROPOSITION OF LAW, HOWEVER THE FACT AS REGARDS AVAILABILITY OF FUNDS OUT OF THE CASH WITHDRAWALS MADE BY THE ASSESSEE FROM HIS BANK ACCOUNT, WHICH MIGHT HAVE BEEN UTILISED FOR R EDEPOSITING ON A SUBSEQUENT DATE , CANNOT BE RULED OUT IN THE ABSENCE OF ANY EVIDENCE PROVING TO THE CONTRARY THAT THE SAID FUNDS HAD BEEN UTILISED/EXHAUSTED BY THE ASSESSEE BY WAY OF AN INVESTMENT OR EXPENDITURE . WE FIND THAT THE LD. A.R IN ORDER TO DRIVE HOME HIS AFORESAID CONTENTION HAD RELIED ON A HOST OF JUDICIAL PRONOUNCEMENTS AND ORDERS OF COORDINATE BENCHES OF THE TRIBUNAL. WE HAVE DELIBERATED ON THE FACTS OF THE PRESENT CASE AND FINDING SUBSTANTIAL FORCE IN THE CONTENTIONS RAISED BY THE LD. A.R BEFO RE US, THEREFORE IN ALL FAIRNESS AND IN THE INTEREST OF JUSTICE SET ASIDE THE MATTER TO THE FILE OF THE A.O , WHO IS DIRECTED TO WORK OUT THE PEAK CREDIT IN TERMS OF OUR AFORESAID OBSERVATIONS AND RESTRICT THE ADDITION TO THE AMOUNT OF SUCH PEAK CREDIT . TH A T FOR THE REMOVAL OF DOUBTS, IT MAY BE CLARIFIED THAT THE A.O WHILE WORKING OUT THE PEAK CREDIT SHALL ALLOW CREDIT ONLY AS REGARDS THE AVAILABILITY OF SUCH RESPECTIVE CASH WITHDRAWALS MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, WHICH CAN SAFE LY BE HELD TO BE AVAILABLE WITH THE LATTER FOR REDEPOSITING ON A SUBSEQUENT DATE. THAT OUR OBSERVATIONS RECORDED HEREINABOVE SHALL APPLY AS REGARDS THE ADDITIONS MADE BY THE A.O IN RESPECT OF BOTH OF THE AFORESAID BANK ACCOUNTS SO HELD BY THE ASSESSEE WITH FEDERAL BANK LTD., BRANCH: DADAR (WEST), MUMBAI, VIZ. SB ACCOUNT NO.15050100036852 AND SB. ACCOUNT NO. 15050100030087. NEEDLESS TO SAY, THE A.O SHALL DURING THE COURSE OF THE SET ASIDE PROCEEDINGS AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE, WHO SHALL REMAIN AT A LIBERTY TO SUBSTANTIATE THE AVAILABILITY OF THE CASH WITHDRAWALS FOR MAKING THE SUBSEQUENT REDEPOSIT IN THE BANK ACCOUNT. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS P A G E | 16 SET ASIDE THE MATTER TO THE FILE OF THE A.O FOR FRESH ADJUDICATION IN TERMS OF OUR AFORESAID OBSERVATIONS. 14. TH E APPEAL OF THE ASSESSEE IS THUS ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 /06/2017 . SD/ - SD/ - (R. C. SHARMA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 21 .06.2017 PS. ROHIT KUMAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI P A G E | 17