ITO, Ward 2(2), Pune v. Shri Sameeruddin Q. Shaikh, Pune

ITA 643/PUN/2013 | 2008-2009
Pronouncement Date: 28-04-2014 | Result: Dismissed

Appeal Details

RSA Number 64324514 RSA 2013
Assessee PAN AZNPS7848A
Bench Pune
Appeal Number ITA 643/PUN/2013
Duration Of Justice 1 year(s) 1 month(s) 22 day(s)
Appellant ITO, Ward 2(2), Pune
Respondent Shri Sameeruddin Q. Shaikh, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 28-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 28-04-2014
Assessment Year 2008-2009
Appeal Filed On 08-03-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO.643/PN/2013 (A.Y: 2008-09) ITO WARD 2(2) PUNE APPELLANT VS. SHRI SAMEERUDDIN Q. SHAIKH HYM COMPLEX WANOWRIE PUNE 411040 PAN: AZNPS7848A RESPONDENT APPELLANT BY : SHRI P.L.PA THADE RESPONDENT BY : NONE DATE OF HEARING: 03.04.2014 DATE OF ORDER : 28.04.2014 ORDER PER SHAILENDRA KUMAR YADAV J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-II [IN SHOR T CIT(A)] PUNE DATED 11.10.2012 FOR A.Y. 2008-09 ON THE FOLLOWING GROUNDS. 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN RESTRICTING THE UNDISCLOSED INCOME OF TH E ASSESSEE TO RS.6 83 700/- EVEN WHEN THE SOURCES OF CASH DEPOSITED IN THE BANK ACCOUNT REMAINED UNEXPLAINED TO THE EXTENT OF RS.20 85 200/-. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN RESTRICTING THE ADDITION TO THE AMOUNT O F PEAK CREDIT OF RS.6 83 700/- WITHOUT APPRECIATING THAT THE ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM THAT THE SOURCE OF THE CASH DEPOSITED WAS OUT OF TH E WITHDRAWALS FROM THE BANK DURING THE ASSESSMENT PROCEEDINGS REMAND PROCEEDINGS AND THE APPELLATE PROCEEDINGS. 2 3. THE APPELLANT CRAVES LEAVE TO ADD ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 2. THE ASSESSEE IS AN INDIVIDUAL WHO HAD FILED RETU RN OF INCOME DECLARING THE TOTAL INCOME OF 5 04 604/- ON 28.05.2008. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY THROUGH C ASS AND ACCORDINGLY NOTICE WAS ISSUED TO THE ASSESSEE. TH E ASSESSING OFFICER WAS IN POSSESSION OF INFORMATION IN RESPECT OF ASSESSEES CASH DEPOSITS TO THE TUNE OF 20 85 200/- DURING THE F.Y. 2007-08 WITH AXIS BANK LTD. WANOWRIE BRANCH PUNE. THEREF ORE A LETTER SEEKING INFORMATION U/S.133(6) WAS ISSUED BY ASSESS ING OFFICER TO THE CONCERNED BANK. THE BANK FURNISHED THE STAT EMENT IN RESPECT OF ASSESSEE PERUSAL OF THE SAME REVEALED T HE CASH DEPOSIT OF 20 85 200/- DURING F.Y. 2007-08. THE ASSESSING OF FICER SOUGHT EXPLANATION FROM ASSESSEE REGARDING THESE CA SH DEPOSITS. SINCE NOBODY APPEARED ON BEHALF OF ASSESSEE ON DATE FIXED SO THE MATTER WAS DECIDED AS EX PARTE AGAINST THE ASSESSEE . 3. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AU THORITY WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE AND HAVING CALLED FOR REMAND REPORT THE C IT(A) DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE INTER ALIA SUBMITT ED THAT CIT(A) ERRED IN RESTRICTING THE UNDISCLOSED INCOME OF TH E ASSESSEE TO 6 83 700/- EVEN WHEN THE SOURCES OF CASH DEPOSITED IN THE BANK ACCOUNT REMAINED UNEXPLAINED TO THE EXTENT OF 20 85 200/-. HE ERRED IN RESTRICTING THE ADDITIO N TO THE AMOUNT OF PEAK CREDIT OF 6 83 700/- WITHOUT APPRECIATING THAT THE ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM THAT THE SOURCE OF THE CASH DEPOSITED WAS OUT OF THE WITHDRA WALS FROM THE BANK DURING THE ASSESSMENT PROCEEDINGS RE MAND PROCEEDINGS AND THE APPELLATE PROCEEDINGS. ACCORDI NGLY THE ORDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. NOBODY APPEARED ON BEHALF OF ASSESSEE. SO THE 3 APPEAL IS BEING DECIDED ON THE BASIS OF ARGUMENTS O F LEARNED DEPARTMENTAL REPRESENTATIVE AND MATERIAL ON RECORD. 4. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD WE FIND THAT THE ISSUE BEFORE US IS WITH RE GARD TO ADDITION OF 20 85 200/- AS UNEXPLAINED INCOME U/S.69 OF ACT. AS STATED ABOVE THE ASSESSING OFFICER WAS IN POSSESSION OF I NFORMATION REGARDING CASH DEPOSIT TO THE TUNE OF 20 85 200/- DURING F.Y. 2007-08 RELEVANT TO THE ASSESSMENT YEAR UNDER CONSI DERATION WITH AXIS BANK LTD. WANOWRIE BRANCH PUNE. THEREF ORE INFORMATION U/S.133(6) OF ACT WAS CALLED FROM THE B ANK BY THE CONCERNED ASSESSING OFFICER. ON PERUSAL OF THE BAN K STATEMENT IT WAS FOUND THAT CASH DEPOSIT OF 20 85 200/- WAS DEPOSITED BY THE ASSESSEE. THEREFORE AN EXPLANATION IN THIS RE GARD WAS SOUGHT FROM THE ASSESSEE. ON APPOINTED DATE NEITH ER THE ASSESSEE ATTENDED THE MATTER NOR SUBMITTED ANY REPL Y. THEREFORE THE ASSESSING OFFICER PASSED AN EX PARTE ORDER DECIDING THE ISSUE AGAINST ASSESSEE. IN APPEAL IT WAS SUBMITTED ON BEHALF OF ASSESSEE THAT THE ASSESSEE COULD NOT A TTEND THE PROCEEDINGS BEFORE CONCERNED ASSESSING OFFICER BECA USE OF ILL- HEALTH AT RELEVANT POINT OF TIME AND TO SUBSTANTIAT E THE SAME MEDICAL WAS FILED BEFORE HIM. THE STAND OF THE ASS ESSEE HAS BEEN THAT CASH DEPOSIT AND WITHDRAWALS WAS NORMAL FEATUR E OF THE BUSINESS AND ULTIMATELY THE ASSESSEE CAME FORWARD WITH PEAK CREDIT THEREBY ADMITTING PEAK CREDIT UNDISCLOSED I NCOME THEREBY OFFERING PEAK CREDIT FOR ADDITION AS UNDISCLOSED IN COME. THE BANK ACCOUNT OF AXIS BANK WHEREIN THE CASH DEPOSI TS HAVE BEEN MADE CONTAINS SEVERAL DEPOSITS IN SMALL AMOUNTS AT INTERVALS DURING THE PERIOD OF ENTIRE YEAR THOUGH WITHDRAWAL S HAVE ALSO BEEN MADE EITHER BY ASSESSEE OR ITS STAFF YOGESH NA FDE. THE ASSESSEE HOWEVER WAS NOT ABLE TO FURNISH ANY EXPL ANATION WITH RESPECT TO SOURCE OF CASH DEPOSIT EXCEPT FOR THE FA CT THAT CASH WITHDRAWAL HAD BEEN UTILIZED FOR MAKING CASH PAYMEN TS. IN SUCH 4 A SITUATION THERE WERE SEVERAL CREDITS AND DEBITS IN THE SAME ACCOUNT. A QUESTION AROSE WHETHER SEVERAL CREDITS IN ACCOUNTING YEAR SHOULD BE TAKEN TO INCOME OR PEAK BALANCE IN T HE AMOUNTS SHOULD BE TAKEN AS INCOME. THE COMMON PRACTICE IN SUCH A SITUATION IS TO ARRIVE AT PEAK BALANCE AND TAKE THE SAME TO BE AS UNEXPLAINED CASH CREDIT TO BE TREATED AS INCOME UND ER THE DEEMING PROVISIONS. THE PEAK CREDIT THEORY PRESUPP OSES AN ADVERSE FINDING AGAINST THE ASSESSEE CERTAIN DEPOSI TS MADE BY HIM ARE FROM NON-GENUINE. THEREFORE THE SAME ARE TREATED AS UNEXPLAINED FUNDS BELONGING TO THE ASSESSEE. FOR A RRIVING PEAK CREDIT THE CREDITS AND DEBITS ARE SERIALLY ARRANGE D SO THAT CREDIT FOLLOWING DEBIT ENTRY MAY BE TREATED AS REFERABLE T O THE LATTER TO THE EXTENT POSSIBLE AND NOT TO AGGREGATE BUT ONLY T HE PEAK OF CREDITS WOULD BE TREATED AS UNEXPLAINED. THE ASSES SING OFFICER HAS NOT BEEN ABLE TO ESTABLISH THE UTILIZATION OF C ASH WITHDRAWALS FROM BANK ACCOUNT OR THE DESTINATION OF THE CASH SO DRAWN FROM BANK ACCOUNT. IN THE SAID FACTS AND CIRCUMSTANCES PEAK DEFICIT CASH BALANCE ON THE BASIS OF CASH DEPOSIT AND WITHD RAWAL AS SHOWN IN THE BANK ACCOUNT AND AS WORKED OUT BY THE ASSESSEE INCLUDING BEARER CHEQUES IN THE NAME OF ASSESSEE AS WELL AS STAFF YOGESH NAFDE PEAK CREDIT AS ON 10.03.2008 WAS FOUND 6 83 700/- AND THE SAME WAS TAKEN AS UNDISCLOSED IN COME OF ASSESSEE AS AGAINST OTHER WORKINGS OF PEAK DEFICIT BY ASSESSEE OF 1 57 900/- AND 3 18 700/- BECAUSE THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THE ENTRIES IN CASH DEPOS IT AND WITHDRAWAL FROM BOOKS OF ACCOUNT EITHER DURING REMA ND PROCEEDINGS OR AT APPELLATE PROCEEDINGS. THE SOURC ES OF CASH DEPOSIT IN BANK REMAIN UNEXPLAINED AND THUS PEAK CA SH DEFICIT OF 6 83 700/- REPRESENT THE UNDISCLOSED INCOME OF THE ASSESSEE OBSERVED BY THE CIT(A). THUS OUT OF TOTAL ADDITION OF 20 85 200/- MADE ON THIS GROUND BY ASSESSING OFFICE R THE ADDITION TO THE EXTENT OF 6 83 700/- WAS SUSTAINED AND FOR REMAINING AMOUNT OF 14 01 500/- (20 85 200 6 83 700/-) THE 5 ASSESSEE GOT CONSEQUENTIAL RELIEF. THIS REASONED F INDING OF CIT(A) WHEREBY HE RESTRICTED THE ADDITION TO THE EXTENT OF 6 83 700/- AFTER CONSIDERING THE REMAND REPORT NEEDS NO INTER FERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 5. IN THE RESULT APPEAL FILED BY THE REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 28 TH OF APRIL 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 28 TH APRIL 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-II PUNE 4) THE CIT-II PUNE 5) THE DR A BENCH I.T.A.T. PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY I.T.A.T. PUNE