Shri Jignesh C. Keraliya, RAJKOT-GUJARAT V. The Income Tax Officer, Wd-1(4), RAJKOT-GUJARAT

ITA 762/RJT/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6629 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 30-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Keywords: Peak credit

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI K. NAR ASIMHA CHA RY , JUDICIAL MEMBER ./ ITA NO . 762 /RJT/201 4 / ASSESSMENT YEAR : 20 11 - 12 SHRI JIGNESH CHANDUBHAI KERALIYA AT J ALIYA, DIST. RAJKOT PAN : A ZEPK0 446K VS THE INCOME TAX OFFICER, WARD - 1(4 ), RAJKOT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : RASHMIN VEKARIYA , C.A REVENUE BY : AVINASH KUMAR , D.R / DATE OF HEARING : 22 / 03/2017 / DATE OF PRONOUNCEMENT: 24 /03/2017 / O R D E R PER SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT (A) - I , RAJKOT DATED 28.10.2014 FOR ASSESSMENT YEAR 2011 - 12 . 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD FILED ITS RETURN OF INCOME, DECLARING TOTAL INCOME OF RS.14,730/ - AND AGRICULTURE INCOM E OF RS.2,88,376/ - . IN COURSE OF ASSESSMENT PROCEEDINGS ASSESSING OFFICER NOTICED THAT ASSESSEE HAS DEBITED AGGREGATE CASH OF RS.4,93,000/ - , RS.10,90,000 AND RS.21,36,500/ - IN HIS SAVING BANK ACCOUNTS MAINTAINED WITH SHREE RAJKOT CO. OPERATIVE BANK LTD., S YNDICATE BANK AND STATE BANK OF INDIA RESPECTIVELY. 3. IN THE ABSENCE OF ANY EXPLANATION BY ASSEESSEE, THE ASSESSING OFFICER MADE AN ADDITION OF RS.37,19,500/ - U/S.68 OF THE INCOME TAX ACT. THE ASSESSING OFFICER, HOWEVER, NOTICED THAT ASSESSEE HAD SHOWN AGRICULTURE INCOME OF RS.2,88,376/ - . HE OBSERVED THAT THE SOURCE OF THIS AMOUNT ALSO REMAINED UNEXPLAINED. HOWEVER, SINCE HE HAD MADE ADDITION I T A - 7 6 2 / R J T / 2 0 1 4 A . Y . 2 0 1 1 - 1 2 2 FOR THE ENTIRE AMOUNT OF CASH DEPOSIT OF RS.37,19,500/ - , NO SEPARATE ADDITION WAS MADE FOR THIS AMOUNT. 4. BEFOR E THE LD.CIT(A) ASSESSEE HAD SUBMITTED THAT HE WAS ENGAGED IN THE BUSINESS OF IMITATION ORNAMENTS AND THE ENTIRE DEPOSIT WERE MADE IN SAVING BANK ACCOUNTS OF THIS BUSINESS. HOWEVER, WITHDRAWAL S WERE ALSO MADE IN CASH FROM THESE DEPOSITS. THE PLEA OF THE A SSESSEE WAS THAT 5% PROFIT BE TAKEN AND ADDITIO N OF RS.1,85,975/ - MAY BE MADE TO ITS INCOME AS PER THE PROVISION S OF 44A D OF THE ACT. IN THE ALTERNATIVE , IT WAS SUBMITTED THAT THE MAXIMUM PEAK BALANCE OF RS.17, 06, 6000/ - BE TAKEN. THE LD.CIT(A) ACCEPTED TH E A LTERNATIVE PLEA OF THE ASSESSEE. HE, HOWEVER, NOTED THAT THE ASSESSEE HAS WITHDRAWN RS. 4 LACS ON 03/07/2010 WHICH WAS ASKED TO BE SET - OFF AGAINST DEPOSIT ON 01/09/2010. HE OBSERVED THAT THERE WAS A GAP OF ALMOST TWO MONTHS IN THE WITHDRAWAL AND DEPOSIT AND , THEREFORE , DETERMINED THE PEAK AT RS.21, 0 6 , 000/ - 5. BEING AGGRIEVED ASSESSEE IS IN APPEAL BEFORE US AND HAS TAKEN FOLLOWING GROUNDS OF APPEAL. 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER 2.0 THE LEARNED COMMISSION ER OF INCOME TAX(APPEALS) - I, RAJKOT [HERENINAFTER] REFERRED TO AS THE CIT(A) ] ERRED ON FACTS AS ALSO IN LAW IN RETAINING ADDITION OF RS.21,06,000/ - OUT OF THE TOTAL ADDITION OF RS.37,19,500/ - MADE ON ACCOUNT OF CASH DEPOSITS MADE IN SAVING ACCOUNTS HEL D WITH (A)RAJKOT DISTRICT CO - OPERATIVE BANK, (B) SYNDICATE BANK & (C) STATE BANK OF INDIA. THE ADDITION MAY KINDLY BE DELETED. 3.0 THE LEARNED CIT(A) ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE ADDITION OF RS.2,88,376/ - MADE BY TREATING AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. THE ADDITION MAY KINDLY BE DELETED. 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES. LD.CIT(A), DID NOT ACCEPT THE ASSESSEE S CLAIM OF ESTIMATING PROFIT AT THE RATE OF 5% OBSERVING THAT ASSESSEE HAD NOT B EEN ABLE TO PROVE THAT HE WAS ENGAGED IN THE BUSINESS OF DEALING IN IMITATION ORNAMENTS. NOTHING HAS BEEN I T A - 7 6 2 / R J T / 2 0 1 4 A . Y . 2 0 1 1 - 1 2 3 BROUGHT ON RECORD TO CONTROVERT THE FINDING OF LD.CIT(A) IN THIS REGARD. WE THEREFORE, DO NOT FIND ANY BASIS TO INTERFERE WITH THIS FINDING OF LD.CIT (A). AT THE TIME OF HEARING LD.COUNSEL PRIMAR IL Y SUBMITTED THAT LD.CIT(A) ERRED IN DENYING THE BENEFIT OF RS.4 LACS WHILE DETERMINING PEAK CREDIT. IN OUR OPINION, SINCE THE PEAK WAS DETERMINED FOR FULL YEAR, THEREFORE , ONE ENTRY COULD NOT BE ISOLATED MEREL Y ON THE GROUND OF GAP IN WITHDRAWAL AND DEPOSIT OF ONLY TWO MONTHS . DEPARTMENT HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SHOW THAT WITHDRAWAL WAS USED FOR ANY OTHER PURPOSE. WE THEREFORE, SET ASIDE THE ORDER OF LD.CIT(A) ON THIS COUNT AND DIRECT THE ASSES SING OFFICER TO DETE RMINE THE PEAK CREDIT AT RS.17,0 6,000/ - . AS FAR AS TREATMENT OF AGRICULTURAL INCOME OF RS.2,88,376/ - AS INCOME FROM OTHER SOURCES , IS CONCERNED, SINCE THE ADDITION HAS BEEN CONFIRMED ON THE BASIS OF PEAK CREDIT, THEREFORE, NO SEPARATE ADDITION IS CALLED FOR. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 24 TH MARCH, 2017. SD/ - SD/ - ( K. NAR ASIMHA CHA RY ) JUDICIAL MEMBER ( S.V. MEHROTRA ) ACCOUNTANT MEMBER RAJKOT , DATED /03 /20 17 *MANISH / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - 2 . / RESPONDENT - 3 . / CONCERNED CIT /DIT 4 . - / CIT (A) - IV, RAJKOT 5 . , , / DR, ITAT, RAJKOT 6 . / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) / ITAT, RAJKOT