RAJARAM AGRAWAL,CHAKRADHARPUR V. ITO, CHAIBASA

ITA 92/RAN/2025

AI Insights

This case involves an appeal by Rajaram Agrawal against the order of the CIT(A)-2, Kolkata, concerning the assessment year 2016-2017. The primary contention was the discrepancy between the turnover reported in the tax return and the transactions recorded in the assessee's bank account. The AO had applied the peak credit method to assess the true income, which the assessee had initially requested. The Tribunal dismissed the appeal, agreeing with the lower authorities that the peak credit method was correctly applied and that the assessee's reported income was significantly lower than the actual transactions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 788115 (ITAT-RANCHI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 10-04-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KHUBCHANDT PANDYA
• Assessee Lawyers: RITESH KUMAR JHA
• Keywords: Condonation of delay; Business income; Reasonable cause; Peak credit
• Section: 44AD

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC BENCH”, RANCHI BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER (THROUGH HYBRID MODE) आयकर अपील सं./ITA No.92/RAN/2025 (निर्धारण वर्ा / Assessment Year :2016-2017) Rajaram Agrawal, Ward No.7, Kali Mandir, Chakradharpur, West Singhbhum, Chakradharpur, Jharkhand Vs. ITO, Ward-3(4), Chaibasa स्थायी लेखा सं./PAN No. : AEJPA 5952 Q (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) निर्ाारिती की ओर से /Assessee by : Shri Ritesh Kumar Jha, Adv राजस्व की ओर से /Revenue by : Shri Khubchand T Pandya, Sr. DR सुनवाई की तारीख / Date of Hearing : 26/11/2025 घोषणा की तारीख/Date of Pronouncement : 26/11/2025 आदेश / O R D E R This is an appeal filed by the assessee against the order of the ld. Addl/JCIT(A)-2, Kolkata, dated 23.03.2024 for the assessment year 2016- 2017. 2. Shri Ritesh Kumar Jha, ld.AR represented on behalf of the assessee. Shri Khubchand T Pandya, Sr. DR appeared on behalf of the revenue. 3. It was submitted by ld. AR that the appeal of the assessee is time barred by 314 days. It was the prayer that the delay may be condoned and appeal of the assessee may be adjudicated. 4. I have perused the records. The affidavit filed by the assessee on for condonation of delay reads as follow:- Printed from counselvise.com ITA No.92/Ran/2025 2 Printed from counselvise.com ITA No.92/Ran/2025 3 5. The appellate the order of the ld. CIT(A) was passed on 23.03.2024. The assessee has attached certain medical certificates. The reasons being given is that there is medical emergency and, therefore, I was there was reasonable cause for delay in filing the appeal. Accordingly, I condone the delay and the appeal of the assessee is admitted to be disposed off on merits. 6. On merits, it was submitted by the ld.AR AR that the assessee is a dealer in Sugar, atta, maida and suji rice etc. It was the submission that the return has been filed by applying the provisions of Section 44AD of the Act. Printed from counselvise.com ITA No.92/Ran/2025 4 It was submitted that the transaction in the bank account were in respect of the business activity of the assessee. It was the prayer that the addition made by the AO is liable to be deleted. 7. In reply, the ld. Sr. DR submitted that the turnover shown by the assessee in his return is of Rs.51,20,100/-, whereas the transactions recorded in the bank account of the assessee was to the tune of Rs.3,07,80,940/-. It was submission that the assessee himself had requested the AO to complete the assessment as per the peak credit method to arrive at the true income. It was submission that in orders of the AO and CIT(A) are liable to be upheld. 8. I have considered the rival submissions. A perusal of assessment order clearly shows that the AO has recorded in para 3 of his order that the gross receipt shown by the assessee is only Rs.51,20,100/-. In para 4.1 of the Assessment Order, the AO has brought out the fact of cash deposited in the bank account and the total of the said cash deposited in the bank accounts is of Rs.3,07,80,940/-. The AO further proceeded to the mention in para 4.2 that the assessee himself has requested to complete the assessment as per the peak credit/telescoping method to arrive at his true income. After recording this, the AO in para 4.5 accepts that the transactions are relating to business activity of the assessee. Thereafter the AO has arrived at the peak credit at the request of the assessee. Here. I should pass a remark that on the gross receipts of Rs.51,20,100/- the assessee had shown u/s.44AD of the Act @8%. When the AO has found the bank transactions to be Rs.3,07,80,940/-, it is surprising that the AO Printed from counselvise.com ITA No.92/Ran/2025 5 accepted the claim of the assessee that the peak credit to be considered, When the assessee himself shown business income at 8%, I failed to understand as to why the same percentage may not be applied to the entire turnover of the assessee. Here, the AO was extremely liberal by taking the peak credit, which is not correct. However, as this is an appeal of the assessee, I am unable to interfere with the finding of the AO. This being so I am of the view that the order of the AO and order of the Ld.CIT(A) does not call for any interference and same stands upheld. 9. In the result, appeal of the assessee is dismissed. Order dictated and pronounced in the open court on 26/11/2025. Sd/- (GEORGE MATHAN) न्यायिक सदस्य / JUDICIAL MEMBER रधाँची Ranchi; दिनांक Dated 26/11/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनिलिपि अग्रेपर्ि/Copy of the Order forwarded to : आदेशधिुसधर/ BY ORDER, (Senior Private Secretary) आयकर अिीिीय अधर्करण, रधाँची / ITAT, Ranchi 1. अपीलार्थी / The Appellant- . 2. प्रत्यर्थी / The Respondent- 3. आयकि आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. निभागीय प्रनतनिनर्, आयकि अपीलीय अनर्किण, रधाँची / DR, ITAT, Ranchi 6. गार्ड फाईल / Guard file. सत्यापपत प्रतत //True Copy// Printed from counselvise.com "