SHRI NARENDRA CHOUDHARY V. INCOME TAX OFFICER KISHANGARH

ITA/190/2016

AI Insights

In this case, Shri Narendra Choudhary, the appellant, challenged the decision of the Income Tax Appellate Tribunal (ITAT), which confirmed the order of the Commissioner of Income Tax (Appeals) [CIT(A)]. The dispute centered on the addition of Rs.10,49,760 as peak cash credit under section 69 of the Income Tax Act. The CIT(A) and the ITAT found that the appellant failed to provide sufficient evidence to substantiate the sources of the cash deposits in his bank accounts. The appellant argued that the statements and affidavits provided were not adequately considered, particularly concerning a cash transaction of Rs.6,00,000. However, the court found no merit in these arguments and upheld the lower authorities' decisions.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 750993 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 02-11-2016
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: SIDDHARTH RANKA
• Keywords: Assessment Year; Bank deposits; Cash credit; Cash transactions; Income tax appeal; Peak cash credit
• Section: 69; 69A

Judgement Text

"1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR. D.B. Income Tax Appeal No.190/2016 Shri Narendra Choudhary vs. Income Tax Officer, Ward Kishangarh, District Ajmer DATE OF ORDER ::: 2nd November, 2016 HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE MAHENDRA MAHESHWARI Mr. Siddharth Ranka, for the appellant. BY THE COURT:- (Per Hon'ble Jhaveri, J.) 1. By way of this appeal, the assessee has challenged the judgment and order of the Tribunal whereby the Tribunal has confirmed the order of the CIT(A) which has partly allowed the appeal of the assessee and has dismissed the appeal of the department. 2. Counsel for the appellant Mr. Ranka has contended that two questions which were put for our consideration are as under:- “1. Whether on the facts and material available on record and in law whether any benefit can be granted to the assessee appellant out of peak cash credit worked out at Rs.10,49,760/- u/s 69 of the Act? 2. Whether on the facts and material available on record and in law the ld. ITAT was correct in law in not granting the benefit towards opening cash- in-hand, collection from old outstanding debtors and amount received on account of cancellation of agreement to purchase plot of land towards the addition sustained by it on account of peak cash credit worked out at Rs.10,49,760/- u/s 69 of the Act?” 2 3. He contended that the CIT(A) while considering the issue involved has observed as under:- “As per above statement the peak of cash deposited in the above two bank accounts is Rs.10,49,760 as on record 10.10.2008. Further, as regarding the source of above deposits narrated in the chart above, assessee's claim that assessee has received back the amount of Rs.6,00,000/- on 01.05.2008 which was earlier given to Shri Gyan Singh for the purchase of land for Rs.50,00,000/- at Malaksar as per oral agreement, it may be mentioned that the AO in his remand report dated 18.09.2013 has mentioned that statements of Shri Gyan Singh and assessee was recorded. However, no evidence in the form of any agreement for the said purchase of land, payment of advance, receipt for returning the money or any correspondence with the government authorities regarding the encroachment on the land and vacation thereof as claimed, cancellation on the deal etc. have been submitted. In view of above facts, the claim made in the statement by the assessee is not supported by any evidence to this effect. As regarding the opening liquid balance on 30.3.2008 as per final accounts produced of Rs.1,08,161, receipt from sundry debtors of Rs.3,00,000/-, it may be mentioned that assessee had filed the return as 'No Accounts Case' even in A.Y. 2007-08 and 2008-09 also. It has not been shown that in such return there were any such balances available for bank deposits made during the current year. As regarding the assessee's claim for current years income being deposited in the above bank accounts, no correlation has been established between the deposits in above two accounts and earning of the assessee over the year. The same is treated to have been utilized for household and personal expenses etc. In view of the above circumstances, above contention of the appellant is without substance. In view of above discussion, the peak credit of the cash deposits in the above two saving bank accounts in Indian Overseas Bank amounting to Rs.10,49,760/- is confirmed and balance amount added u/s 69A is deleted.” 3 4. He further contended that the major question which has been put by the assessee is regarding the genuineness of Gyan Singh statement recorded during cross-examination has not been appreciated by the tribunal and CIT(A) in paragraph no.2.2 observed as under:- “We have heard the rival contentions and pursued the material on record. Firstly, addition regarding deposit of cheque of Rs.7,00,000/- has rightly been deleted by the ld CIT(A). Secondly, the explanation of the assessee regarding the sources of deposits has been duly considered though not accepted by the ld CIT(A) and the peak theory has rightly been invoked by the ld CIT(A) in the facts of the present case. We do not see any infirmity in the order of the ld CIT(A) and we hereby affirm the above findings of the ld CIT(A) confirming the addition of Rs.10,49,760 in the hands of the appellant.” 5. He contended that no independent reasons are adopted by the tribunal and it has simply accepted and confirmed the finding of the CIT(A). He also contended that regarding cross-examination of the witnesses or genuineness of the affidavit, there is no finding that the affidavit or statement recorded of the persons are not acceptable. In that view of the matter, he contended that cash transaction of Rs.6,00,000/- and statement recorded in page no.46 where it has been held that in respect of Rs.6,00,000/- (out of total additions linked to cash deposits in S.B. A/cs of Rs.2815190/-) returned by Sh. Gyan Singh. The submissions on 12/08/2013, alongwith affidavits of Sh. Gyan Singh Puniya and Sh. Pawan Kumar Puniya, the 4 statements of appellant and Sh. Gyan Singh recorded u/s 131 have not been duly correlated and considered by ld. A.O. Rs.6,00,000/- advance to Sh. Gyan Singh and Sh. Pawan Kumar (26/02/2008) were not considered by the tribunal. 6. We have heard the counsel for the appellant. 7. Taking into the consideration the cash transaction of Rs. 6,00,000/- was not reflected in the balance sheet as on record of relevant year. 8. Further finding of the CIT(A) as referred above in page no. 74 which has been confirmed by the tribunal. In view of the concurrent finding, we are in complete agreement with the view taken by the tribunal. 9. Thus, no substantial question of law arises and appeal is devoid of merits and is hereby dismissed. (Mahendra Maheshwari), J. (K.S. Jhaveri), J. Brijesh "