DCIT, Erode V. P.Palaniswamy, Erode

ITA 931/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81182 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-08-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 15-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: S SRIDHAR
• Keywords: Peak credit; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 931/MDS/2014 & C.O. NO. 46/MDS/2014 ( IN ITA NO. 931/MDS/2014 ) ASSESSMENT YEAR : 2010-11 DEPUTY COMMISSIONER OF INCOME TAX , CIRCLE -I, ERODE VS SRI P.PALANISWAMY, NO.39, CHINNAMUTHU IIIRD STREET, EK VALASU, ERODE-638 011 [PAN: AIVPP 3231 D] (APPELLANT) (RESPONDENT/CROSS OBJECTOR) REVENUE BY : SHRI GURU BHASHYAM , J CIT ASSESSEE BY : SHRI S.SRIDHAR, ADVOCATE / DATE OF HEARING : 18-08-2014 / DATE OF PRONOUNCEMENT : 22-09-2014 #% / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-I, COIMBATOR E DATED 16-01-2014 RELEVANT TO THE ASSESSMENT YEAR (AY) 201 0-11. I.T.A. NO. 931/MDS/14 & C.O. NO. 46/MDS/14 :- 2 -: THE ASSESSEE HAS FILED CROSS-OBJECTIONS SUPPORTING THE FINDINGS OF CIT(APPEALS). 2. THE ASSESSEE IS REAL ESTATE BROKER AND COMMISSIO N AGENT. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY. 2010-11 ON 29-09-2010 DECLARING TOTAL INCOME OF ` 24,63,951/- AND AGRICULTURAL INCOME OF ` 2.00 LAKHS. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) OF THE INCOME TA X ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 26-09-2011. THE ASSESSING OFFICER DURING THE AS SESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE IS NOT IN A POSITION TO GIVE EXACT DETAILS IN RESPECT OF CREDITS APPEARING IN THE BANK ACCOUNT FOR WHICH NO BOOKS OF ACCOUNTS ARE MAINTAIN ED. THE ASSESSING OFFICER MADE PEAK CREDIT ADDITION OF ` 2,50,10,042/- U/S.68 OF THE ACT. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 28-03 -2013, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APP EALS). THE ASSESSEE FURNISHED ADDITIONAL EVIDENCE IN SUPPORT O F HIS CONTENTIONS. THE CIT(APPEALS) SOUGHT REMAND REPORT ON THE DOCUMENTS FILED BY THE ASSESSEE. THE ASSESSING OFF ICER I.T.A. NO. 931/MDS/14 & C.O. NO. 46/MDS/14 :- 3 -: ACCEPTED THE EVIDENCE FURNISHED BY THE ASSESSEE WIT H RESPECT TO RTGS TRANSACTION AMOUNTING TO ` 2,50,00,000/- DT.15-10-2009. THE CIT(APPEALS) ON THE BASIS OF REMAND REPORT, ALL OWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION MAD E U/S.68 OF THE ACT. NOW, THE REVENUE HAS COME IN APPEAL BEFOR E THE TRIBUNAL ASSAILING THE FINDINGS OF CIT(APPEALS). 3. SHRI GURU BHASHYAM, APPEARING ON BEHALF OF THE R EVENUE SUBMITTED THAT THE ASSESSEE PRODUCED EVIDENCE IN RE SPECT OF ONE ENTRY OF ` 2,50,00,000/- ON 15-10-2010WHICH WAS FOUND TO BE GENUINE AND THUS, ACCEPTED BY THE ASSESSING OFFICER . THE CIT(APPEALS) DELETED THE ENTIRE ADDITION OF ` 2,50,10,042/- ON THE EVIDENCE FURNISHED BY THE ASSESSEE IN RESPECT OF ON E ENTRY ALONE. THERE WERE SEVERAL CASH DEPOSITS IN THE BANK ACCOUN T. THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION FOR SUCH C ASH DEPOSITS. MOST OF THE WITHDRAWALS FROM THE BANK ACCOUNT ARE B Y WAY OF CHEQUE ISSUED TO THIRD PARTIES. THUS, THE ASSESSEE IS NOT ELIGIBLE TO GET BENEFIT OF PEAK CREDIT ON SUCH CASH DEPOSITS . THERE ARE CASH DEPOSITS TO THE TUNE OF ` 86,20,100/- WHICH IS TO BE TREATED AS INCOME OF THE ASSESSEE. IN ORDER TO SUPPORT HIS CO NTENTIONS, THE I.T.A. NO. 931/MDS/14 & C.O. NO. 46/MDS/14 :- 4 -: LD.DR PLACED RELIANCE ON THE DECISION OF HON'BLE SUP REME COURT OF INDIA IN THE CASE OF CIT, SALEM VS. K.CHINNATHAMBAN REPORTED AS 292 ITR 682 (SC) AND THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. R.MALLIKA REPORTED AS 219 TAXMAN 244 (MADRAS). 4. ON THE OTHER HAND, SHRI S.SRIDHAR, APPEARING ON BEHALF OF THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF CIT(AP PEALS). THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSE SSING OFFICER HAS MADE CONTRADICTORY OBSERVATIONS WITH REGARD TO ASSESSEES BOOKS OF ACCOUNT IN THE ASSESSMENT ORDER. AT ONE P LACE, THE ASSESSING OFFICER OBSERVED THAT THE AUTHORIZED REPR ESENTATIVE OF THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUNT, BANK ST ATEMENTS, BILLS AND VOUCHERS AND THE SAME WERE EXAMINED AND A T THE OTHER PLACE IN THE ASSESSMENT ORDER, THE ASSESSING OFFICE R OBSERVED THAT NO BOOKS OF ACCOUNTS ARE MAINTAINED AND MAKES ADDITION ON THE BASIS OF PEAK CREDIT U/S.68 OF THE ACT. THE AS SESSEE IS INDEED MAINTAINING BOOKS OF ACCOUNTS. THE BOOKS OF ASSESS EE ARE SUBJECT TO AUDIT U/S.44AB OF THE ACT FOR THE AY UND ER CONSIDERATION. THE AUDIT REPORT HAS BEEN FILED BEF ORE THE TAX I.T.A. NO. 931/MDS/14 & C.O. NO. 46/MDS/14 :- 5 -: AUTHORITIES. THE LD.COUNSEL FURTHER CONTENDED THAT THE ASSESSEE HAS TAKEN LOAN OF ` 25.00 CRORES FROM MR. N.RAMALINGAM & CO., WHICH HAS BEEN DULY REFLECTED IN THE BANK STATEMENT AS WELL AS BOOKS OF ACCOUNT. ON THE BASIS OF ACKNOWLEDGMENT F ILED BY THE ASSESSEE, THE ADDITION MADE U/S.68 WAS DELETED BY C IT(APPEALS). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDG MENTS ON WHICH THE REVENUE HAS PLACED RELIANCE. THE LD.DR HAS EMP HASIZED THAT THE CIT(APPEALS) HAS DELETED THE ENTIRE ADDITI ON MERELY ON THE BASIS OF EXPLANATION FURNISHED WITH RESPECT TO SINGLE TRANSACTION OF ` 2.5 CRORES DONE ON 15-10-2009. HOWEVER, THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION WHAT-SO- EVER WITH REGARD TO OTHER TRANSACTIONS. THERE ARE CASH DEPOS ITS TO THE EXTENT OF ` 86,20,100/- IN THE BANK ACCOUNT OF THE ASSESSEE ON VARIOUS DATES DURING THE FY.2009-10. THE LD.DR HAS PLACED ON RECORD THE DETAILED BANK STATEMENT OF THE ASSESSEE. WE FIND MERIT IN THE CONTENTIONS OF THE LD.DR. THE ASSESSI NG OFFICER HAD MADE ADDITION OF ` 2,50,10,042/- U/S.68 ON THE BASIS OF PEAK I.T.A. NO. 931/MDS/14 & C.O. NO. 46/MDS/14 :- 6 -: CREDIT. THE ASSESSEE HAS FURNISHED EXPLANATION WIT H RESPECT TO ONE TRANSACTION OF ` 2.5 CRORES. HOWEVER, NO EXPLANATION WHAT- SO-EVER HAS BEEN FURNISHED BY THE ASSESSEE WITH RES PECT TO DEPOSITS TOTALING ` 86,20,100/-. 6. WE OBSERVE THAT IN THE ASSESSMENT ORDER, THE ASS ESSING OFFICER HAS RECORDED CONTRADICTORY FACTS WITH RESPE CT TO THE MAINTENANCE OF BOOKS OF ACCOUNT. AT THE FIRST INST ANCE, THE ASSESSING OFFICER HAS STATED THAT THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUNT, BANK STATEMENTS, BILLS AND VOUCHE RS WHICH WERE EXAMINED BY HIM. IN THE SAME ORDER, THEREAFTE R, THE ASSESSING OFFICER HAS RECORDED THE FINDING THAT THE ASSESSEE IS NOT IN A POSITION TO GIVE DETAILS IN RESPECT OF CRE DITS APPEARING IN THE BANK ACCOUNT FOR WHICH NO BOOKS OF ACCOUNT ARE MAINTAINED. THE LD.COUNSEL FOR THE ASSESSEE HAS STATED AT THE B AR THAT THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT AND THE BO OKS OF THE ASSESSEE ARE SUBJECT TO AUDIT. WE ARE OF THE CONSI DERED OPINION THAT THIS ISSUE NEEDS RE-VISIT TO THE ASSESSING OFF ICER. THE ASSESSEE IS DIRECTED TO FURNISH THE DETAILS OF DEPO SITS MADE DURING THE FY.2009-10 IN THE SAVINGS ACCOUNT MAINTAINED WI TH INDUS IND I.T.A. NO. 931/MDS/14 & C.O. NO. 46/MDS/14 :- 7 -: BANK AND THE BOOKS OF ACCOUNT, IF ANY. THE ASSESSI NG OFFICER AFTER EXAMINING THE DETAILS AND BOOKS OF ACCOUNT FU RNISHED BY THE ASSESSEE, SHALL PASS ORDERS AFRESH, IN ACCORDANCE W ITH LAW. 7. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATIST ICAL PURPOSES AND THE CROSS OBJECTIONS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 22 ND SEPTEMBER, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( ! ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) / VICE PRESIDENT / JUDICIAL MEMBER /CHENNAI, /DATED: 22 ND SEPTEMBER, 2014 TNMM !'#$ %&$ /COPY TO: 1. %'#() /APPELLANT 2. !*() /RESPONDENT 3. + (%'#) /CIT(A) 4. + /CIT 5. $./' !01 /DR 6. /23 4# /GF