DILRAJ SHARMA vs. COMMISSIONER OF INCOME TAX

Whether Reporters of local papers may be allowed to see the judgment?

To be referred to the Reporters or not? YES

Whether the judgment should be reported in the Digest? Present: Mr. Sunil Kumar Mukhi, Advocate with Ms. Prerna Talwar, Advocate for the appellant.

We have heard learned counsel for the appellant-assessee.

A perusal of the findings recorded by the authorities below shows that the assessee had made several cash deposits in the bank account and had withdrawn money by way of cheques and demand drafts issued to different parties. She was asked to explain the source of entries in the said bank accounts. The assessee replied that she was acting as a broker for feed ingredients and the amount was received from poultry/dairy farmers which was deposited in her bank account and was paid through cheque to the suppliers of feed ingredients against the material. It was noticed by the Assessing Officer that the assessee in her return of income had declared income under the head business at ` 1,16,365/- on account of Income from commodity exchange of ` 60,250/- and estimated income from resale of ladies suits at ` 56,115/- in addition to the income declared under house property and other sources. The assessee had not declared any income from the business of commission claimed to have been carried out. She also failed to produce the names and addresses of the parties from whom the payments had been received and to whom cheques were issued. Since the deposits in the bank were made in cash whereas withdrawals were made through issue of cheques, the plea of the assessee of circulation of money was not accepted and addition of ` 16,78,961/- was made in the income of the assessee. The said findings were upheld by the CIT(A) and the Tribunal. It has been categorically recorded by the Tribunal that inspite of several opportunities, the assessee failed to produce any evidence to establish her claim. Alternatively, it was pleaded that addition be made on account of peak credit in the bank accounts. The Tribunal after following the decision GURBAX SINGH 2016.05.20 09:53 integrity of this document High Court Chandigarh in Sudhir Kumar Sharma's case (supra) upheld the addition made to the income of the assessee. The Tribunal also considered the additional evidence sought to be produced by the appellant and found the same to be irrelevant. The relevant findings recorded by the Tribunal read thus:- “8. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in relation to the cash deposited in the bank accounts of the assessee. The assessee had admittedly not declared any income on account of the said circulation of money in his bank account with Kotak Mahindra Bank Limited and Oriental Bank of Commerce. The assessee had periodically deposited cash in the said bank account against which it had issued cheques to various parties. The plea of the assessee before the Assessing Officer was that the said amount was being deposited on behalf of the poultry/Dairy farmers but had failed to produce any evidence in this regard nor any list of persons from whom the cash was received was filed. Similarly, the assessee failed to furnish any evidence as to whom the said cheques were issued from the said bank account. In the absence of the same, the Assessing Officer made addition on account of total cash deposited in the bank account. However, despite several opportunities, the assessee had failed to produce any evidence to establish his claim and now before us has raised the plea that in the alternative, addition if any be made on account of peak credit in the said bank accounts. It may be brought on record that the assessee, on one hand had deposited cash in the said bank accounts and thereafter, withdrawn the money by way of cheques/DDs.

We find that similar issue of cash deposit in the bank account and the non furnishing of complete details in respect of the said cash deposit and thereafter issuance of cheques from the said account had arisen before the Tribunal in cross appeals in ITA No.713/CHD/2010 and ITA No.963/CHd/2010 in the case of GURBAX SINGH 2016.05.20 09:53 integrity of this document 2007-08 and others and vide order dated 27.6.2013.....xxxxx

The issue raised in the present appeal is identical to the issue before the Hon'ble Punjab and Haryana High Court in the case addition of ` 16,78,961/- under section 68 of the Income Tax Act.”

The plea of the assessee for addition on the basis of peak credit and also for producing additional evidence which was considered to be irrelevant, had been rightly declined by the Tribunal as noticed above.

The Tribunal has recorded the findings after considering the entire evidence and material on record, which are pure findings of fact. Learned counsel for the appellant has not been able to demonstrate that the said findings are perverse or erroneous in any manner. We find no error in the view adopted by the Tribunal. No substantial question of law arises. Consequently, the appeal stands dismissed. (Ajay Kumar Mittal)