Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, JAIPUR BENCHES “A”, JAIPUR
Before: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM vk;dj vihy la-@ITA No. 906 & 907/JP/2017
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES “A”, JAIPUR Jh jes'k lh 'kekZ] ys[kk lnL; ,oa Jh fot; iky jko] U;kf;d lnL; ds le{k BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM vk;dj vihy la-@ITA No. 906 & 907/JP/2017 fu/kZkj.k o"kZ@Assessment Year :2010-11 & 2011-12 cuke Suman Somani, D.C.I.T., Vs. Vasundhara, 158, Jangid Central Circle-1 Bhawan, MI Road, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AHUPS 7512 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (CA) jktLo dh vksj ls@ Revenue by : Shri B.K. Gupta (CIT-DR) lquokbZ dh rkjh[k@ Date of Hearing : 05/02/2019 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 19/02/2018 vkns'k@ ORDER PER: VIJAY PAL RAO, J.M. These two appeals by the assessee are directed against the composite order of the ld. CIT(A)-4, Jaipur dated 19/09/2017 for the A.Y. 2010-11 and 2011-12 respectively.
Both these appeals are arising from the assessment orders passed U/s 143(3) read with Section 153A of the Income Tax Act, 1961 (in short the Act) and the additions made by the Assessing Officer are also in pursuant to the search and seizure action U/s 132 of the Act. The assessee has raised following grounds in these appeals:
ITA 906 & 907/JP/2017_ 2 Suman Somani Vs. DCIT
Grounds for the A.Y. 2010-11
“1. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.5,47,815/- made by Assessing Officer on account of peak working by not considering that source of such peak is the availability of cash balance in the regular cash book of M/s Shubham, proprietor concern of the assessee. He has further erred in not directing the AO to allow set off of Rs.3 lacs incorrectly offered by assessee in AY 2012-13 against the addition if any sustained in the assessment year under consideration.
2. The assessee craves to amend, alter and modify any of the grounds of appeal.
3. The appropriate cost be awarded to the assessee.”
Grounds for the A.Y. 2011-12 “1. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.78,263/- made by Assessing Officer on account of peak working by not considering that source of such peak is the availability of cash balance in the regular cash book of M/s Shubham, proprietor concern of the assessee. He has further erred in not directing the AO to allow set off of Rs.3 lacs incorrectly offered by assessee in AY 2012-13 against the addition if any sustained in the assessment year under consideration.
2. The assessee craves to amend, alter and modify any of the grounds of appeal.
3. The appropriate cost be awarded to the assessee.”
There was a search and seizure action in the case of the assessee U/s 132 of the Act on 31/01/2012. In the course of search and seizure action, certain incriminating material were found containing entries of cash receipts and payments relating to the period from 09/09/2009 to 31/01/2012 falling in the A.Y. 2010-11 to 2012-13. In response to notice
ITA 906 & 907/JP/2017_ 3 Suman Somani Vs. DCIT U/s 153A of the Act, the assessee filed return of income for the A.Y. 2010- 11 and 2011-12 declaring income of Rs. 2,03,400/-, 29,19,780/- respectively. The income declared by the assessee for these two assessment years includes Rs. 33.00 lacs offered by the assessee during the search and seizure action. The Assessing Officer while completing the assessment U/s 143(3) read with Section 153A of the Act, picked up the peak debit and credit and found that for the A.Y. 2010-11, the amount of Rs. 7.00 lacs is peak credit and for the A.Y. 2011-12, a peak debit was taken at Rs. 30,78,263/-. After allowing the income declared by the assessee. The Assessing Officer made the addition of Rs. 5,47,815/- and Rs. 78,263/- respectively for these two assessment years.
The ld. A.R. of the assessee has submitted that as per working of peak balances, the payment is more than the receipt and source of such payment is out of cash balance available in the books of M/s Shubham, a proprietorship concern of the assessee. The ld AR has further pointed out that the cash balance in the accounts was available on account of withdrawal from bank account and the assessee produced supporting evidence including cash book of M/s Shubham as well as bank details. The assessee has already offered Rs. 3.00 lacs on account of peak credit for the A.Y. 2010-11 and Rs. 30.00 lacs for the A.Y. 2011-12. Further the assessee has also offered Rs. 3.00 lacs in the A.Y. 2012-13 and hence a ITA 906 & 907/JP/2017_ 4 Suman Somani Vs. DCIT total income of Rs. 36.00 lacs was offered by the assessee for three years which were covered under the seized documents. Hence, the ld AR has submitted that the assessee has already offered the entire income for these three years and also explained the source of the payment which is excess then the receipt as per the documents from the books of M/s Shubham, a proprietorship concern then no further addition is called for.
There is no dispute on the working of the peak amount but the dispute is only with regard to the availability of cash balance in the regular cash book of M/s Shubham. The Assessing Officer has not allowed such set off on the ground that M/s Shubham was not subjected to search. Thus, the ld AR has submitted that once the assessee has produced all the supporting documents regarding the availability of the cash then the addition is not justified.
On the other hand, the ld CIT-DR has submitted that the assessee did not file any return of income U/s 139 of the Act and only in response to notice U/s 153A of the Act, the returns were filed by the assessee. The cash book of M/s Shubham is not authenticated document as it was not disclosed by the assessee during the course of search and seizure action.
The Assessing Officer has taken the peak balances which is not in dispute and therefore, once the assessee has failed to explain the availability of cash then the addition made by the Assessing Officer of the differential
ITA 906 & 907/JP/2017_ 5 Suman Somani Vs. DCIT amount is justified. He has further submitted that the Assessing Officer has already allowed the set off of the peak balance of one year against the next year.
We have considered the rival submissions as well as the relevant material on record. During the search and seizure action, some documents were seized which contains the entries of receipts and payments. The Assessing Officer has taken the peak receipt and peak payment which shows the peak credit and debit as per the seized material. The summarized details of the working of these three years as under:
AY Date Cumulative Credit Cumulative Debit Total peak for Addition to be Peak (in Rs.) Peak (in Rs.) the year (in Rs.) made (in Rs.) 2010-11 10/12/2009 7,00,000/- - 7,00,000/- 8,47,815/- 19/12/2009 - (1,47,815) (1,47,815/-) 2011-12 23/03/2011 - (30,78,263/-) (29,30,948/-) (29,30,9,48/-) 2012-13 29/08/2011 _ 29,78,763/-) Nil Nil Thus, the peak credit for the A.Y. 2010-11 is Rs. 7.00 lacs whereas the peak debit for the A.Y. 2011-12 is Rs. 30,78,260/- which remains same in the next year as there is no increase in the peak debit. The Assessing Officer has taken the balance amount after giving adjustment of the income offered by the assessee in the return of income for the A.Y. 2010- 11 and 2011-12 and made the addition of the balance amount of Rs. 5,47,815/- for the A.Y. 2010-11 and Rs. 78,263/- for the A.Y. 2011-12.
There is no dispute that the assessee has offered the total income of Rs. 36.00 lacs while filing the return of income in response to the notice U/s 153A of the Act for these three assessment years i.e. A.Y. 2010-11 to ITA 906 & 907/JP/2017_ 6 Suman Somani Vs. DCIT 2012-13. The Assessing Officer though considered the return of income for these two assessment years but has not allowed the credit of the income offered by the assessee for the A.Y. 2012-13. Further the assessee has also produced the cash book of M/s Shubham which is a proprietorship concern of the assessee and explained the availability of cash for the peak debit for the A.Y. 2011-12. The Assessing Officer did not accept the cash book on the ground that it was not subjected to search, however, once the business activity of M/s Shubham is not in dispute and the income offered by the assessee is also comprising of the activity of M/s Shubham, a proprietorship concern of the assessee then the availability of the cash in the proprietorship concern is very much available to explain the source of peak debit i.e. the payment reflected in the seized material over the receipts in the said seized documents. Therefore, though, the seized material is a relevant material for making the assessment and addition, however, once the assessee has explained the source of the availability of cash which is otherwise not disturbed by the Assessing Officer but refused to accept on technical ground then the addition cannot be made ignoring the availability of cash in the books of the assessee. Since the Assessing Officer in the assessment proceedings ought to have examined all the records, therefore, the cash book produced by the assessee cannot be rejected on technical grounds rather the correctness of the same was ITA 906 & 907/JP/2017_ 7 Suman Somani Vs. DCIT required to be examined. Once the Assessing Officer has not given any finding on the correctness of the cash peak filed by the assessee and further the assessee has also offered the total amount of Rs. 36.00 lacs as income for these three years then the addition made by the Assessing Officer is not justified. The same is deleted for both the years.
In the result, both the appeals of the assessee are allowed. Order pronounced in the open court on 19th February, 2019.
Sd/- Sd/- ¼jes'k lh 'kekZ½ ¼fot; iky jko½ (RAMESH C SHARMA) (VIJAY PAL RAO) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 19th February, 2019 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Suman Somani, Jaipur. 1. izR;FkhZ@ The Respondent- The D.C.I.T., Central Circle-1, Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 906 & 907/JP/2017) 6. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत