Shri Kaushalbhai Ramchandra Pabari,, RAJKOT-GUJARAT v. The Income Tax Officer, Ward-3(1),, JAMNAGAR

ITA 811/RJT/2010 | 2005-2006
Pronouncement Date: 10-12-2010 | Result: Partly Allowed

Appeal Details

RSA Number 81124914 RSA 2010
Assessee PAN AKDPP6833P
Bench Rajkot
Appeal Number ITA 811/RJT/2010
Duration Of Justice 8 month(s) 19 day(s)
Appellant Shri Kaushalbhai Ramchandra Pabari,, RAJKOT-GUJARAT
Respondent The Income Tax Officer, Ward-3(1),, JAMNAGAR
Appeal Type Income Tax Appeal
Pronouncement Date 10-12-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 10-12-2010
Assessment Year 2005-2006
Appeal Filed On 22-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI D.T. GARASIA (JM) I.T.A. NO.811/RJT/2010 (ASSESSMENT YEAR 2005-06) SHRI KAUSHALBHAI RAMCHANDRA PABARI VS ITO WD.3(1) C/O KALPESH S DOSHI & CO CAS JAMNAGAR 411 COSMO COMPLEX MAHILA COLLEGE CIRCLE RAJKOT01 PAN : AKDPP6833P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KALPESH DOSHI RESPONDENT BY : SHRI AVINASH KUMAR O R D E R GARASIA : THIS APPEAL BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF CIT(A) JAMNAGAR FOR THE ASSESSMENT YEAR 2005-06. 2. THE SOLE ISSUE AGITATED BY THE ASSESSEE IN THE A PPEAL PERTAINS TO CONFIRMATION OF AN ADDITION OF RS.3 50 104 ON ACCOU NT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT 1961. THE ASSESSEE ONLY L EGAL GROUND CONTENDS THAT PROVISIONS OF SECTION 68 ARE WRONGLY INVOKED IN MAK ING THE ADDITION. 3. THE FACTS OF THE ISSUE ARE THAT THE DEPARTMENT R ECEIVED INFORMATION FROM KOTAK MAHINDRA LTD THAT THE ASSESSEE HAS DEPOSITED IN ALL AN AMOUNT OF RS.17 86 539 IN HIS BANK ACCOUNT. THE ASSESSMENT O F THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS THEREFORE REOPENED BY ISSUE OF NOTICE U/S 148 OF THE ACT. AS THE ASSESSEE HAS NOT COMPLIED WITH THE NOTICE U/S 148 OF THE ACT SEVERAL OTHER NOTICES WERE ISSUED TO HIM. STILL TH ERE WAS NO COMPLIANCE FROM THE ASSESSEE. THE ASSESSING OFFICER THEREFORE FRAMED THE BEST JUDGMENT ASSESSMENT U/S 144 OF THE ACT WHEREIN HE HAS ADDED THE ENTIRE SUM OF RS.17 86 539 BEING UNEXPLAINED INVESTMENT IN BANK A CCOUNTS BY INVOKING PROVISIONS OF SECTION 68 OF THE ACT. ON APPEAL TH E LD.CIT(A) CONSIDERED THE ITA NO.811/RJT/2010 2 ISSUE IN DETAIL AND FOUND THAT ONLY THE PEAK DEPOSI TS NEEDS TO BE CONSIDERED AS UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT. THE LD.C IT(A) THEREFORE RESTRICTED THE ADDITION TO THE EXTENT OF RS. 3 50 104 AND DELETED THE BALANCE. FURTHER AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRI BUNAL. 4. THE LD.AR OF THE ASSESSEE AT THE OUTSET SUBMIT TED THAT THE ASSESSEE HAS DEPOSITED MONEY IN HIS BANK ACCOUNT AND THEREFORE PROVISIONS OF SECTION 68 ARE NOT APPLICABLE IN HIS CASE AND THEREFORE THE ADDIT ION IS ILLEGAL AND DESERVES TO BE SET ASIDE. CONTESTING THE ISSUE ON MERITS THE LEA RNED COUNSEL WITHOUT PREJUDICE TO GROUND NO.1 RAISED IN THE APPEAL SUBMITTED THAT IF AT ALL ANY ADDITION IS REQUIRED ONLY THE PEAK OF THE AMOUNTS SO DEPOSITED ON VARIOUS DATES SHOULD BE CONSIDERED FOR ADDITION. THUS HE CONTENDED THAT TH E PEAK AMOUNT BEING RS.2 89 204 THE ADDITION SHOULD BE RESTRICTED TO TH AT AMOUNT. WHEREAS THE LD.CIT(A) HAS ALSO CONSIDERED THE WITHDRAWALS FROM THE BANK ACCOUNT OF RS. 40 000 AND RS.20 900 FOR ADDITION MAKING THE TOTAL ADDITION TO RS. 3 50 104. THE LD AR ARGUED THAT THE WITHDRAWALS SHOULD NOT BE CON SIDERED AS INCOME OF THE ASSESSEE. THE LD.AR THUS PLEADED THAT IF AT ALL AN Y ADDITION IS REQUIRED IT IS ONLY RS.2 89 204. THE LD.DR ON THE OTHER HAND RELIED UP ON THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE FIND THAT THE ASSESSING OFFICER IN THE ABSENCE OF ANY C OMPLIANCE FROM THE ASSESSEE HAS ADDED THE TOTAL DEPOSITS OF RS. 17 86 539. WHI LE DOING SO HE IGNORED THE FACT THAT THE AMOUNT OF RS.17 86 539 WAS THE DEPOSI TS MADE ON VARIOUS DATES. HOWEVER THE LD.CIT(A) HAS RIGHTLY CONCLUDED THAT O NLY THE PEAK OF THE DEPOSITS COULD BE CONSIDERED AS UNDISCLOSED INCOME OF THE AS SESSEE. WE AGREE WITH THE LD.CIT(A) ON THIS COUNT. HOWEVER LEAPING A STEP F URTHER THE LEARNED CIT(A) HAS ALSO CONSIDERED THE WITHDRAWALS THROUGH ATM TOTALIN G RS. 60 900 (RS.40 000 + RS.20 900) AS UNDISCLOSED INCOME OF THE ASSESSEE. THE ALTERNATIVE CONTENTION OF THE ASSESSEE CONCENTRATES ON THIS. THE ARGUMENT OF THE ASSESSEE IS THAT SINCE THE AMOUNT OF RS.60 900 IS WITHDRAWALS THROUG H ATM THE CIT(A) TREATING ITA NO.811/RJT/2010 3 THE SAME AS UNDISCLOSED INCOME IS NOT JUSTIFIED. T HE ASSESSING OFFICER HAS TAKEN RS.17 86 639 AS DEEMED INCOME U/S 68. IN SUCH CASE ONLY PEAK AMOUNT OF CREDIT IS CONSIDERED AS UNEXPLAINED CASH CREDIT. T HERE ARE SERIES OF TRANSACTIONS INVOLVING BOTH CREDITS AS WELL AS DEBITS APPEARING IN THE BANK STATEMENT OF KOTAK MAHINDRA. THE SAME WAS ARRAIGNED BY THE ASSESSEE A S PER THE DATE OF EVERY CREDIT APPEARING AFTER DEBIT TO THE EXTENT REDUCING ONLY THE PEAK OF THE AMOUNT CREDIT OF RS.2 89 204 WAS TREATED AS UNEXPLAINED IN COME. IN THE CASE OF ACIT VS TRIATAN HAPPY HOME PVT LTD 94 TTJ 628 (CUT) SUCH PE AK TRANSACTION WA RECOGNIZED AND WE ARE OF THE VIEW THAT CIT(A) HAS J USTIFIED IN TAKING THE PEAK AMOUNT OF CREDIT AS UNEXPLAINED CASH CREDIT BUT AT THE SAME TIME CIT(A) HAS TAKEN THE WITHDRAWALS OF RS. 40 000 + 20 900 TOTALL ING RS.60 900 AS UNEXPLAINED CREDIT BUT WE DO NOT AGREE WITH THIS. AS PER THE PEAK THEORY THE AMOUNT WHICH IS WITHDRAWN BY THE ASSESSEE HAS TO BE GIVEN CREDIT FO R. THEREFORE WE DELETE THE AMOUNT OF RS.60 900 WHICH WAS ADDED ON ACCOUNT OF W ITHDRAWAL FROM ATM. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10-12-2010 SD/- SD/- (A.L. GEHLOT) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DT : 10 TH DECEMBER 2010 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A JAMNAGAR 4. THE CIT JAMNAGAR 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT