MANOHAR SITARAM SHINDE,SANGLI vs. INCOME-TAX OFFICER, WARD - 1(4), SANGLI

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ITA 237/PUN/2018Status: DisposedITAT Pune18 March 2019AY 2005-065 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the calculation of peak credit by the revenue authorities was not properly carried out. Therefore, the matter was restored back to the Assessing Officer for a proper calculation of the peak credit, with an opportunity for the assessee to be heard.

What were the facts?

The Assessing Officer (AO) made an addition to the assessee's income based on the peak credit of cash deposits in the bank account. The assessee contended that the peak credit was not calculated properly and sought rectification, which was rejected. The CIT(Appeals) granted some relief but did not fully accept the assessee's claim.

What were the issues?

Whether the peak credit of cash deposits was correctly calculated by the revenue authorities and if the matter should be remanded for recalculation.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, PUNE

Before: SHRI R.S.SYAL, VP & SHRI PARTHA SARATHI CHAUDHURY, JM

For Appellant: Shri B.C. Malakar
For Respondent: Shri M.K. Verma
Hearing: 18.03.2019Pronounced: 18.03.2019

आदेश / ORDER

PER PARTHA SARATHI CHAUDHURY, JM :

This appeal preferred by the assessee emanates from the order of Ld. CIT(Appeals)-1, Kolhapur dated 08.11.2017 for the assessment year 2005-06 as per grounds of appeal on record.

2.

At the time of hearing, the Ld. AR of the assessee submitted that though the assessee has taken multiple grounds of appeal before the Tribunal, however, the crux of the grievance is that the peak credit was not

2 ITA No.237/PUN/2018 A.Y.2005-06

calculated properly by the Revenue Authorities and therefore, he prayed that

the matter may be restored back to the file of the Assessing Officer for proper

calculation of peak credit.

3.

The relevant facts in respect of the submissions made by the Ld. AR

before us are that the assessee being individual derived income from

commission on activity as subagent of Shri R.R. Gorle for grapes and also

from agricultural activity. On the basis of AIR information in possession, the

Assessing Officer noticed that there was cash deposits to the tune of

Rs.34,82,783/- in the bank account of the assessee during the year under

consideration. Therefore, the Assessing Officer issued notice u/s.142(1) of the

Act on 24.08.2007 and in response to the notice, the assessee filed return of

income for assessment year 2005-06 declaring total income of Rs.43,900/-

along with agricultural income of Rs. Nil. After hearing the assessee and

considering his submissions, the Assessing Officer assessed income of the

assessee at Rs.13,87,783/- vide order dated 31.12.2007 on the basis of peak

credit. According to the assessee, there was an error in arriving at the peak

credit. He approached the Assessing Officer for rectification. The Assessing

Officer Ward 1(4), Sangli vide his order u/s.154 dated 27.06.2008 disposed

off assessee’s request for rectification with the remark that “it is seen that

disallowance of Rs.13,87,783/- on account of unexplained peak deposits in

bank account had been made after verifying facts since the assessee failed to

explain the sources of deposits made in the bank account. The facts are

discussed at length in the body of assessment order u/s.143(3) of the I.T.Act

dated 13.12.2007. It is also seen that the assessee has already preferred an

appeal against the said order before the CIT(A), Kolhapur. Hence, it is not

mistake apparent from the records. Under these circumstances no rectification

3 ITA No.237/PUN/2018 A.Y.2005-06

is possible in the issue raised in the application. Therefore, the assessee’s

application for rectification of mistake is hereby rejected and filed accordingly.”

4.

Aggrieved by the order of the Assessing Officer, the assessee preferred

appeal before the Ld. CIT(Appeals). The Ld. CIT(Appeals) after considering the

facts, submissions of the assessee and the assessment order made certain

concessions on the peak credit as calculated by the Assessing Officer and

partly allowed the appeal of the assessee.

5.

That in response to the opening submissions made by the Ld. AR of the

assessee as hereinabove mentioned, the Ld. DR per contra, placed strong

reliance on the order of Sub-ordinate Authorities, however, agreeing on the

proposition of restoration of the matter to the file of the Assessing Officer.

6.

We have perused the case records and heard the rival contentions. The

Assessing Officer has calculated peak credit in the case of assessee and

thereafter, the Ld. CIT(Appeals) has made some concessions in the calculation

of the peak credit and have given part relief to the assessee. That before us,

submissions of the Ld. AR is that the calculation of the peak credit by the

Revenue Authorities was not properly carried out and it needs re-verification.

It is the prayer of the Ld. AR for restoring the matter back to the file of

Assessing Officer for proper calculation of the peak credit. The Ld. DR

conceded to the request made by the Ld. AR.

In the interest of justice, we are of the considered view that the order of

the Ld. CIT(Appeals) should be set aside and the matter may be restored back

to the file of the Assessing Officer for proper calculation of peak credit. We

order accordingly. Needless to say, the Assessing Officer shall grant

reasonable opportunity of hearing to the assessee.

4 ITA No.237/PUN/2018 A.Y.2005-06

In the result, appeal of the assessee is allowed for statistical purposes. 7.

Order pronounced on 18th day of March, 2019. Sd/- Sd/- R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER

पुणे / Pune; �दनांक / Dated : 18th March, 2019. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :

अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-1, Kolhapur. 4. The Pr. CIT-1, Kolhapur. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6.

// True Copy // आदेशानुसार / BY ORDER,

�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.

5 ITA No.237/PUN/2018 A.Y.2005-06

Date 1 Draft dictated on 18.03.2019 Sr.PS/PS 2 Draft placed before author 18.03.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order

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