Shri Umed S. Bothra, Ahmedabad v. The Income tax Officer,Ward-13(4),, Ahmedabad

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL VP AND BHAVNESH SAINI JM) ITA NO.1094/AHD/2007 977/AHD/2008 1095/AHD/2007 978 AND 979/AHD/2008 A. Y.: 1996-97 1997-98 1998-99 1999-00 AND 2000-01 SHRI UMED S. BOTHRA C/O. RED ROSE SNACK BAR NR. H. L. COMMERCE COLLEGE NAVRAANGPURA AHMEDABAD PA NO. AFAPB 3626A VS THE INCOME TAX OFFICER WARD-13 (4) AAYAKAR BHAVAN AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. SOPARKAR AR RESPONDENT BY SHRI AMARJIT SINGH DR O R D E R PER BHAVNESH SAINI: ALL THE ABOVE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST TWO COMMON ORDERS OF LEARNED CIT(A )- XX AHMEDABAD DATED 14 TH DECEMBER 2006 FOR ASSESSMENT YEARS 1996-97 AND 19 98-99 AND THE ORDER OF THE LEARNED CIT(A)-XXI AHMEDABAD DATED 18 TH DECEMBER 2007 FOR ASSESSMENT YEARS 1997-98 1999-2 000 AND 2000-01 RESPECTIVELY. 2. IN ALL THE APPEALS THE ASSESSEE RAISED EFFECTIVE GROUNDS OF APPEALS CHALLENGING THE ADDITIONS ON ACCOUNT OF PEAK DEPOSI TS IN A SUM OF RS.3 10 816/- IN ASSESSMENT YEAR 1996-97 RS.1 84 4 06/- IN ASSESSMENT YEAR 1997-98 RS.91 774/- IN ASSESSMENT YEAR 1998-9 9 RS.81 920/- IN ASSESSMENT YEAR 1999-2000 AND RS.2 95 390/- IN ASSE SSMENT YEAR 2000-01. 3. IN ALL THE ASSESSMENT YEARS THE AO MADE THE ADDI TIONS ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT. TH E TRIBUNAL IN ITS ORDER IN ITA NO.3777 AND 1991/AHD/2004 DATED 30-06-2005 F OR ASSESSMENT YEARS 1996-97 AND 2000-01 SET ASIDE THE ORDERS OF T HE AUTHORITIES BELOW ITA NO.1094 1095/AHD/2007 977 978 AND 979/AHD/200 8 SHRI UMED S. BOTHRA 2 AND DIRECTED THE AO TO CONSIDER THE CLAIM OF THE AS SESSEE FOR MAKING THE ADDITION U/S 68 OF THE IT ACT ON THE BASIS OF THE P EAK CREDITS. THE FINDINGS OF THE TRIBUNAL IN PARA 5 ARE REPRODUCED A S UNDER: 5. WE HAVE HEARD THE PARTIES AND CONSIDERED THEIR RIVAL SUBMISSIONS. THE CONTENTION OF THE ASSESSEE THAT TH E MONEY HAS BEEN DEPOSITED OUT OF SAVINGS OR EARNINGS OF CA TERING BUSINESS FROM 1980 TO 1989 HAS NOT BEEN PROVED EVEN BEFORE US AND THEREFORE NO RELIEF CAN BE GRANTED TO THE ASSESSEE ON THIS ACCOUNT. THE ALTERNATIVE CONTENTION OF THE ASS ESSEE THAT IF AT ALL ADDITION IS TO BE MADE ON PEAK BASIS HAS SO ME FORCE. THE REJECTION OF ASSESSEES CLAIM BY THE CIT(A) ON THE GROUND THAT IT HAS NOT BEEN PROVED THAT CASH WITHDRAWALS H AVE BEEN REDEPOSITED GOES CONTRARY TO THE CONCEPT OF PEAK CR EDIT. PEAK CREDIT ADDITIONS ARE ADOPTED ONLY IN THOSE CASES WH ERE THE ASSESSEE IS NOT IN A POSITION TO PIN-POINT AS TO WH ICH MONEY HAS GONE WHERE AND THEREFORE IN THE ABSENCE OF IN FORMATION AND EXACT DETAILS RESORT SHOULD BE MADE ON THE BAS IS OF PEAK CREDIT. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AS WELL AS THAT OF THE ASSESSING OFFICER AND DIRECT TH E ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE FOR M AKING THE ADDITION U/S. 68 ON THE BASIS OF PEAK CREDITS THE DETAILS FOR WHICH WILL BE SUBMITTED BY THE ASSESSEE BEFORE HIM IN THE FRESH PROCEEDINGS. WE DIRECTLY ACCORDINGLY. 4. THE SAME ORDER IS ALSO CONSIDERED IN THE REMAINI NG ASSESSMENT YEARS AND THE AO WORKED OUT THE PEAK CASH DEPOSIT A ND MADE THE ADDITIONS ACCORDINGLY. IN ASSESSMENT YEAR 1996-97 T HE AO MADE THE ADDITION ON ACCOUNT OF PEAK CASH DEPOSIT IN A SUM O F RS.2 99 079/-. THE LEARNED CIT(A) FURTHER ENHANCED THE ADDITION BY RS. 11 737/-. IN THE ASSESSMENT YEAR 1998-99 THE AO MADE THE ADDITION OF PEAK CASH DEPOSIT IN A SUM OF RS.1 00 000/- WHICH IS REDUCED TO RS.91 774/- BY THE LEARNED CIT(A). IN ASSESSMENT YEAR 1997-98 THE AO M ADE THE SIMILAR ADDITION IN A SUM OF RS.1 94 406/- WHICH IS REDUCED BY THE LEARNED CIT(A) TO RS.1 84 406/-. IN THE REMAINING ASSESSMEN T YEARS THE AO MADE ADDITIONS OF RS.81 920/- AND RS.2 95 390/- WHICH HA VE BEEN CONFIRMED BY THE LEARNED CIT(A). ITA NO.1094 1095/AHD/2007 977 978 AND 979/AHD/200 8 SHRI UMED S. BOTHRA 3 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE DIRECTIONS OF THE TRIBUNAL DATED 30-06-2005 (SUPRA) HAVE NOT B EEN PROPERLY CONSIDERED AND ACCORDINGLY HIGHER ADDITIONS HAVE BE EN MADE AS AGAINST THE ACTUAL PEAK ADDITIONS SHOULD HAVE BEEN MADE AS PER THE DIRECTIONS OF THE TRIBUNAL. THEREFORE ORDERS OF THE AUTHORITIES BELOW ARE NOT SUSTAINABLE IN LAW. AFTER HEARING THE MATTER THE L EARNED COUNSEL FOR THE ASSESSEE WAS DIRECTED TO FILE THE GIST OF THE PEAK CREDIT OF CASH IN ORDER TO EXPLAIN THE ISSUE. THE LEARNED COUNSEL FOR THE ASSE SSEE ON THE BASIS OF THE MATERIAL FILED BEFORE THE AO PREPARED THE PEAK OF THE CASH DEPOSITS COPIES OF WHICH ARE FILED AT PAGES A TO F OF THE PA PER BOOK FILED ON 27-04-2010. COPIES OF THE SAME ARE ALSO GIVEN TO LE ARNED DR. THE LEARNED COUNSEL FOR THE ASSESSEE BY REFERRING TO TH E PEAK CASH DEPOSIT IN THE BANK ACCOUNT FOR THE ENTIRE ASSESSMENT YEARS IN QUESTION SUBMITTED THAT THE HIGHEST PEAK OF THE ASSESSEE IS RS.2 99 07 9/- AS IS CONSIDERED BY THE AO IN THE ASSESSMENT YEAR 1996-97. HE HAS SU BMITTED THAT IN THE REMAINING ASSESSMENT YEARS THE SAME IS REDUCED CONS IDERABLY. THEREFORE THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE ADDITIONS TO THE EXTENT WHAT IS ULTIMATELY CONFIRME D BY THE LEARNED CIT(A) AS AGAINST THE ADDITION OF RS.2 99 079/-. THE LEARN ED COUNSEL FOR THE ASSESSEE ACCORDINGLY SUBMITTED THAT IT WOULD BE APP ROPRIATE AND PROPER TO RESTORE THE MATTER TO THE FILE OF THE AO FOR REC ONSIDERATION AND VERIFICATION OF THE PEAK DEPOSIT IN THE BANK ACCOUN T SO AS TO PROPER ADDITION COULD BE MADE ON THIS ISSUE. THE LEARNED DR HAS ALSO SUBMITTED THAT THE MATTER MAY BE REMANDED TO THE FI LE OF THE AO FOR VERIFICATION OF THE PEAK DEPOSIT AS SUBMITTED BY TH E ASSESSEE DURING THE COURSE OF ARGUMENTS. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION OF TH E AO WITH REGARD TO THE ADDITIONS MADE ON ACCOUNT OF PEAK CREDIT. THE A DDITION WAS MADE ORIGINALLY BY THE AO ON ACCOUNT OF CASH CREDIT U/S 68 OF THE IT ACT ITA NO.1094 1095/AHD/2007 977 978 AND 979/AHD/200 8 SHRI UMED S. BOTHRA 4 BECAUSE THE AO FOUND THAT THE ASSESSEES BANK ACCOU NT HAD CERTAIN CASH DEPOSITED WHICH WERE NOT EXPLAINED SATISFACTORILY. THE TRIBUNAL HOWEVER VIDE ITS ORDER DATED 30-06-2005 DIRECTED THE AO TO CONSIDER THE CLAIM OF THE ASSESSEE FOR MAKING ADDITION U/S 68 OF THE IT A CT BASED ON THE PEAK CREDITS. THE LEARNED COUNSEL FOR THE ASSESSEE FILED COMPUTATION OF THE PEAK CREDIT IN THE PAPER BOOK FROM PAGES A TO F FOR ALL THE ASSESSMENT YEARS EXPLAINING OPENING CASH ON HAND WITHDRAWALS FROM BANK AND BANK DEPOSITS. ACCORDING TO THE ASSESSEE THE PEAK C REDIT FOR ASSESSMENT YEAR 1996-97 COMES TO RS.2 99 079/-. THE AO MADE SI MILAR ADDITION IN THIS ASSESSMENT YEAR BUT THE LEARNED CIT(A) ENHANCE D THE SAME TO RS.11 737/-. IT WOULD SHOW THAT THE PEAK WORKED OUT BY THE ASSESSEE APPEARS TO BE RELEVANT AND CORRECT. THERE MAY BE SO ME CONFUSIONS IN TAKING SOME FIGURES THROUGH WHICH ADDITIONS WERE EN HANCED BY THE LEARNED CIT(A). THEREFORE SAME REQUIRES RECONSIDE RATION AT THE LEVEL OF THE AO. THE LEARNED COUNSEL FOR THE ASSESSEE THROUG H THE SAME WORKING OF THE PEAK DEPOSITS EXPLAINED THAT RS.2 99 079/- W AS THE HIGHEST PEAK IN ALL THE ASSESSMENT YEARS. THEREFORE NO FURTHER ADDITION IS REQUIRED IN THE REMAINING ASSESSMENT YEARS. THIS FACT IS NOT AP PRECIATED AND CONSIDERED BY THE AUTHORITIES BELOW. BOTH THE PARTI ES AGREED BEFORE US THAT THE WORKING OF THE ASSESSEE ABOUT PEAK CREDIT MAY BE RESTORED TO THE FILE OF THE AO FOR VERIFICATION AND CONSIDERATION. SINCE IT WAS PLEADED BEFORE US THAT THE EFFECT TO THE EARLIER ORDER OF T HE TRIBUNAL IS NOT PROPERLY GIVEN BY THE AUTHORITIES BELOW AND IT IS A MATTER OF WORKING OF THE PEAK THEREFORE WE ARE OF THE OPINION THAT THE WORKING OF THE PEAK AND ITS VERIFICATION SHOULD BE RESTORED TO THE FILE OF THE AO FOR VERIFICATION AND CONSIDERATION AFRESH. WE ACCORDINGLY SET ASID E THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FIL E OF THE AO IN ALL THE ASSESSMENT YEARS AND DIRECT THE AO TO VERIFY THE SA ME WORKING OF THE PEAK AS SUBMITTED BY THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FILE COPY OF THE SAME WORKING OF THE PEAK BEFORE THE AO WHICH IS FILED BEFORE THE TRIBUNAL. THE AO SHALL DO THE NEEDFUL BY GIVING REA SONABLE SUFFICIENT ITA NO.1094 1095/AHD/2007 977 978 AND 979/AHD/200 8 SHRI UMED S. BOTHRA 5 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN CASE WORKING OF THE ASSESSEE IS FOUND CORRECT THE AO SHALL MAKE THE OR DER ACCORDINGLY OTHERWISE THE AO MAY PASS REASONED ORDER ON THE SAM E AND SHALL INCORPORATE THE SPECIFIC FINDINGS IN THE ASSESSMENT ORDER. WITH THE ABOVE OBSERVATION THESE GROUNDS OF APPEALS OF THE ASSESS EE IN ALL THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE REMAINING GROUNDS THE ASSESSEE CHALLENGE D CHARGING OF INTEREST WHICH IS CONSEQUENTIAL AND INITIATION OF P ENALTY PROCEEDINGS U/S 271 (1) ( C ) OF THE IT ACT WHICH IS SEPARATE AND D ISTINCT AND AS SUCH NO FURTHER FINDINGS ARE REQUIRED. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO DID NOT ARGUE ON THE SAME BECAUSE HE HAS RESTRICTED HIS ARGUMENTS IN ALL THE APPEALS TO THE PEAK DEPOSIT ONLY. IN THIS VIEW OF THE MATTER THE REMAINING GROUNDS OF APPEALS OF THE ASSESSEE ARE DI SMISSED. 8. AS A RESULT ALL THE APPEALS OF THE ASSESSEE AR E PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 07-05-2010 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 07 - 05-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD