Shri Manoj Kumar Ban Shyam Band, Jabalpur V. Income Tax Officer, Jabalpur

ITA 98/JAB/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2267 (ITAT-JABALPUR)
• Duration Of Justice: 4 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M M NEMA
• Keywords: Unexplained investment; Peak credit
• Section: 143(3); 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NOS. 98 & 99/JAB/2013 / ASSESSMENT YEAR : 2007-08 SHRI MANOJ KUMAR BEN, SHRI SHYAM BAND, NEAR LORDGANJ THANA, JABALPUR PAN : AGOPB 2241 C VS INCOME TAX OFFICER, WARD 1 (1), JABALPUR / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SH. M.M. NEMA, ADV. REVENUE BY : SH. P.D. CHOUGULE, DR / DATE OF HEARING : 12/03/2018 / DATE OF PRONOUNCEMENT: 14/03/2018 / O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THESE TWO APPEALS OF THE ASSESSEE, ONE AGAINST QUANTUM PR OCEEDINGS U/S 143(3) AND ANOTHER AGAINST PENALTY PROCEEDINGS U/S 271(1)(C) , ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A) DATED 23.07.2012 AND 24. 07.2012 RESPECTIVELY FOR ASSESSMENT YEAR 2007-08. SINCE THE ISSUE INVOLVED IN THESE APPEALS IS COMMON, BOTH THESE APPEALS WERE HEARD TOGETH ER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE O F CONVENIENCE. 2. FIRST WE TAKE UP ITA NO.98/JAB/2013 PERTAINING TO ASSESSME NT YEAR 2007-08. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PEAK CASH CREDIT FUND OF RS. 857521/- WHICH IS SUBMITTED DURING THE APPELLATE PROCEEDINGS. 3. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS AGAINST SUSTAINING PEAK CASH CREDIT ADDITION OF RS.8,57,521/-. BRIEFLY STATED FACTS ARE THAT ITA NOS. 98 & 99/JAB/2013 MANOJ KUMAR BEN VS ITO AY : 2007-08 2 THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASS ESSMENT AND THE ASSESSMENT U/S 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') WAS FRAMED VIDE ORDER DATED 24.12.2009. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICE D THAT THERE WERE UNEXPLAINED CASH DEPOSITS IN THE THREE BANK ACCOUNTS OF THE ASSESSEE TOTALING TO RS.76,48,000/-. THE ASSESSING OFFICER, THEREFO RE, BY INVOKING PROVISIONS OF SECTION 69 OF THE ACT, MADE ADDITION OF ENTIRE CASH DEPOSITS OF RS.76,48,000/-. 4. AGGRIEVED BY THE ACTION OF ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) WHO, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, SUSTAINED THE ADDITION TO THE EXTENT OF PEAK CREDIT, I.E. RS.8,57,521/- VIDE ORDER DATED 23.07.2012 AND, ACCORDINGLY, GIVEN PAR T RELIEF TO THE ASSESSEE TO THE EXTENT OF RS.67,90,479 /-. 5. FURTHER AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEF ORE US. 6. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THER E IS NO DISPUTE WITH REGARD TO THE ADDITION MADE ON ACCOUNT OF PEAK CRED IT; HOWEVER, HE SUBMITTED THAT LEARNED CIT(A) HAS WRONGLY COMPUTED THE PEAK CREDIT OF RS.8,57,521/- AS ON 26.02.2006. LEARNED COUNSEL FURTHER SUBMITTED THAT THE CORRECT PEAK OUGHT TO HAVE BEEN APPLIED BY THE LEARNED CIT(A). IN SUPPORT OF HIS CONTENTIONS, LEARNED COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE ASSESSMENT ORDER AND THE ORDER OF THE LEARNED CIT(A). LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENTED THAT, AS PER THE STATEME NT OF BANK ACCOUNT FILED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES, T HE TOTAL CASH DEPOSITS IN ALL THREE BANK ACCOUNTS WERE STOOD AT RS.66,54,500/-, WHEREAS A SSESSING OFFICER HAS SHOWN THE CASH DEPOSITS AGGREGATING TO RS.76, 48,000/-; THEREBY THE ASSESSING OFFICER ASSESSED AN EXCESS AMOUNT OF RS. 9,93,500/-. LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSED THE SUBMISSIONS SO MADE BY THE ITA NOS. 98 & 99/JAB/2013 MANOJ KUMAR BEN VS ITO AY : 2007-08 3 LEARNED COUNSEL FOR THE ASSESSEE AND SUPPORTED THE ORD ER OF THE ASSESSING OFFICER. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT LEARNED CIT(A) RESTRICTED THE ADD ITION TO RS.8,57,521/-, ON THE BASIS OF PEAK CREDIT AS ON 26.06.2006, AS AGAINST THE RS. 78,48,000/- MADE BY THE ASSESSING OFFICER U/S. 68 OF THE ACT, BY F OLLOWING OBSERVATION:- DECISION: ON CAREFUL PERUSAL OF MATERIAL ON RECORD A ND SUBMISSION OF THE LD. COUNSEL, I FIND THAT THE AO HAS NOT PROPERLY EXAMINED T HE THREE BANK STATEMENTS AND THE CHART OF PEAK CREDIT FURNISHED BY THE APPE LLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE APPELLANT OPERATED THREE DIFFERENT BANK ACCOUNTS DUR ING THE YEAR UNDER CONSIDERATION I.E. 2006-07 AS DETAILED HERE UNDER: 1. IDBI A/C. NO.052104000658212 IN THE NAME OF MANOJ KUMAR BEN 2. ICICI A/C NO.019801506340 IN THE NAME OF MANOJ KUMAR BEN. 3. IDBI A/C NO.052102000008853 IN THE NAME OF SHYAM BAND ACCOUNT NO. 65812 6340 8853 OPENING BALANCE AS ON 01.04.2006 4416 6329 1540 CLOSING BALANCE AS ON 31.03.2007 3411 4015 23616 ON 26.06.2002 THE PEAK CREDIT FOUND IN BANK ACCOUNTS ARE AS UNDE R: A/C. NO. 65812 6340 8853 TOTAL RS.5307 RS.8,49,633 RS.2581 RS.8,57,521 THE APPELLANT VIDE HIS WRITTEN SUBMISSION DATE 29/06/12 CONTE NDED THAT A CHART HAS BEEN PREPARED AND FILED IN RESPECT OF PEAK CRE DITS TO EXPLAIN THE AVAILABILITY OF FUNDS AND AS PER THE SAID CHART AS NO 26/06/2 006 THE AVAILABILITY OF CASH WAS RS.8,19,965/-. BUT AS PER ABOVE BAN K ACCOUNT DETAILS THE CREDIT BALANCE WAS AVAILABLE AT RS.8,75,520/- A/C NO. 65812 6340 8853 TOTAL AS PER AO'S ORDER: RS. 22,26,00 30,75,100 23,46,900 72,08,800 CASH DEPOSIT DURING ITA NOS. 98 & 99/JAB/2013 MANOJ KUMAR BEN VS ITO AY : 2007-08 4 THE YEAR 2006-07 AS PER BANK A/C COPY. RS. 29,17,600 32,54,600 10,36,600 76,48,000 DIFFERENCE : RS. 4,39,200/-. I AS PER ABOVE DETAILS/FIGURES THE ONLY ADDITION CAN BE MADE I N PEAK CREDITS WHICH REFLECTS AT RS.8,57,521/- AS ON 26/06/2006. I FIND THAT THE APPELLANT HAS NOT MAINTAINED ANY BOOK OF AC COUNTS FOR THE YEAR UNDER CONSIDERATION AND HAS BEEN UNABLE TO EXPLAIN THE SOU RCE OF CASH DEPOSITS IN THE BANK. THE AO HAS NOT GIVEN THE DETAILED WOR KING OF THE BASIS FOR MAKING ADDITION AT RS.76,48,000/- AS UNEXPLAINED INVEST MENT. ALL THE DEPOSITS CANNOT BE TAKEN TO BE UNEXPLAINED INVESTMENT IN VIEW OF THE DETAILS SEEN FROM THE BANK STATEMENTS. IN MY VIEW, THE CORRECT M ETHOD WOULD BE TO TAKE THE PEAK CREDIT IN THE GIVEN CIRCUMSTANCES. IN VIEW OF ABOVE, THE ADDITION MADE BY THE AO IS RESTRICTED TO RS.8,57,521/-. THE SAME IS HEREBY SUSTAINED. THE APPELLANT GETS RELIEF TO THE EXTENT OF RS.67,90,479/-. THIS GROUND OF APPEAL IS PARTLY ALLOWED. HOWEVER, WE FIND THAT, IN SUM AND SUBSTANCE, THE CON TENTION OF THE ASSESSEE IS THAT AS PER ASSESSMENT ORDER THE ASSESSING OFFICER HAS SHOWN TOTAL CASH DEPOSITS OF RS.76,48,000/-, HOWEVER, AS PER STATEME NT OF BANK ACCOUNT FILED BY THE ASSESSEE IT COMES TO RS.66,54,500/-, T HEREBY AN EXCESS AMOUNT OF RS.9,93,500/- WAS CALCULATED BY THE ASSESSING OFFIC ER, WHICH HAS BEEN CONFIRMED BY THE ASSESSING OFFICER HIMSELF IN HIS REMAND REPORT DATED 26.03.2012 CALLED FOR BY THE LD. CIT(A). WE, THEREFORE, IN T HE INTERESTS OF JUSTICE, REMIT THE MATTER TO THE FILE OF THE ASSESSI NG OFFICER FOR WORKING OUT THE PEAK ADDITION AFTER ASCERTAINING THE CORRECT CASH DE POSITS IN THE THREE BANK ACCOUNTS OF THE ASSESSEE AND THEREAFTER ADJUDICATE TH E MATTER BY WAY OF A SPEAKING ORDER IN ACCORDANCE WITH THE LAW AND AFTER GIVI NG YET ANOTHER FAIR AND REASONABLE OPPORTUNITY OF HEARING TO THE ASSESS EE. WHILE DOING SO, THE ASSESSING OFFICER SHALL SPECIFICALLY DEAL WITH ALL THE CONTENTIONS OF THE ASSESSEE AS THE ASSESSEE MAY RAISE BEFORE HIM. IN THE R ESULT, ITA NO.98/JAB/2013 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS. 98 & 99/JAB/2013 MANOJ KUMAR BEN VS ITO AY : 2007-08 5 8. ITA NO.99/JAB/2013 IS AN APPEAL PREFERRED BY THE ASSESSEE, CHALLENGING THE ORDER OF THE CIT(A) IN CONFIRMING TH E PENALTY U/S 271(1)(C) ON PEAK CASH CREDIT FUND OF RS.8,57,521/- OF QUANTUM SUSTAINE D ON ACCOUNT OF ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTI ON 69 OF THE ACT. THE ISSUE IN THIS APPEAL IS PENALTY, WHICH IS CONSEQUENTIAL DEPENDING UPON THE OUTCOME OF THE MAIN ISSUE AS REFERRED HEREINABOVE IN Q UANTUM APPEAL, I.E., ITA NO.98/JAB/2013. 9. SINCE WE HAVE RESTORED THE MAIN ISSUE BACK TO THE FI LE OF ASSESSING OFFICER IN THE QUANTUM APPEAL, THE ISSUE OF PENALTY IS ALSO RESTORED BACK TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION TO DECIDE THE SAME AS PER FINAL OUTCOME IN THE QUANTUM PROCEEDINGS AS WELL AS FAC TS AND LAW, AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 10. AS A RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE AR E ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 14 TH MARCH, 2018 AT JABALPUR. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER JABALPUR; DATED 14/03/ 2018 *BIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, JABALPUR 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, JABALPUR