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Income Tax Appellate Tribunal, SURAT
Before: SHRI C.M.GARG & SHRI O.P.MEENA
आदेश /ORDER PER C.M.GARG, JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order of Commissioner of Income Tax (Appeals)-V, Surat (‘CIT(A)’ for short) dated 18.02.2014 for the Assessment Year (A.Y) 2008-09.
The grounds raised by the Assessee read as follows: 1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax (Appeals) has erred in partly confirming the action of assessing officer in making addition on account of alleged unexplained cash deposits in bank by sustaining the addition to the extent of Rs.
2 ITA No.1347/Ahd/2014/SRT (A.Y: 2008-09) Shri Maheshbhai J. Ramani 14,68,604/- as against Rs. 15,87,330/- made by assessing officer. 2. It is therefore prayed that above addition made by assessing officer and confirmed by the Commissioner of Income-tax (Appeals) may please be deleted.
We have heard the arguments of both sides and carefully perused
the relevant material placed on the record of the Tribunal. The ld.
Assessee’s Representative (AR) submitted that the learned
Commissioner of Income-tax (Appeals) has erred in partly confirming the
action of assessing officer in making addition on account of alleged
unexplained cash deposits in bank by sustaining the addition to the extent
of Rs. 14,68,604/- as against Rs. 15,87,330/- made by assessing officer.
He further submitted that the above addition made by assessing officer
and confirmed by the Commissioner of Income-tax (Appeals) may please
be deleted. Alternatively, the ld. AR submitted that entire amount of
deposit cannot be treated as income of the assessee being a LIC Agent
as the amount deposited to the bank account represents cash received
from various parties for making payment of LIC premium, cash received
form Ashwin L. Rangani, President of Gajanad Society, Saroli for making
payment of electricity bill of society and cash received on discounting of
self cheques and other cash deposits therefore, entire addition may kindly
be deleted or maximum the peak amount can be taxed in the hands of the
assessee, which was Rs. 1,50,091/- as on 09.07.2007 therefore, relief
may kindly be granted to the assessee.
3 ITA No.1347/Ahd/2014/SRT (A.Y: 2008-09) Shri Maheshbhai J. Ramani 4. Replying to the above, the ld. Departmental Representative (DR)
submitted that it is a clear case of cash deposit to the bank account of the
assessee and the assessee was unable to give relevant explanation & file
cogent details in support of his contention as to why such huge addition
should not be made as sufficient time was not provided to assessee.
Therefore, the AO was right in making addition u/s. 69A of the Income
Tax Act, 1961 (in short 'the Act') and the same was rightly upheld by the
ld. CIT(A). However, in all fairness, he did not controvert the alternate
prayer of the assessee and submitted that if it is found just and proper
then, the Department has no serious objection in taking peak amount of
deposit during the year for the purpose of taxation.
On careful consideration of above rival submissions, in a cases
where the assessee deposits cash amount to the bank account and failed
to submit proper explanation to substantiate the amounts deposited by
him then, the Revenue authorities have valid powers to pick up the issue
for taxation purposes. At the same time, it is a well-accepted principle of
tax jurisprudence that in such cases when the assessee is regularly
depositing and withdrawing amounts to the alleged bank account for the
purpose of his business or profession activity then, entire amount of
deposit cannot be treated as income in the hands of the assessee
keeping aside the amounts of withdrawal during the year. In the present
case, assessee is a LIC Agent, who is claiming that he received cash
4 ITA No.1347/Ahd/2014/SRT (A.Y: 2008-09) Shri Maheshbhai J. Ramani amounts as premium from his clients and he deposited the same to the bank account and further made payment to LIC on the instructions of his clients. From the copy of bank account available at assessee’s paper book pages 29 to 33, it is also clear that the assessee is depositing cash and also making payments to LIC and other entities. In this situation, the entire cash deposits cannot be treated as income of the assessee and only peak amount credited to the bank of the assessee, which was Rs. 1,50,097/- as on 09.07.2007, can be treated as income in the hands of the assessee. Therefore, alternative prayer of the assessee is allowed and AO is directed to make the addition of peak amount of Rs. 1,50,097/- to the returned income of the assessee on account of cash deposits to his bank account. Accordingly, grounds No.1 & 2 of the assessee are partly allowed and AO is directed to re-compute the addition and taxable income of the assessee.
In the result, appeal of the assessee is partly allowed. Order pronounced in the open court on this day of 16th October, 2018.
Sd/- Sd/- (ओ पी मीना) (सी एम गग�) (O.P.MEENA) (C.M.GARG) लेखा सद�/Accountant Member �ाियक सद�/Judicial Member सूरत / Surat; िदनांक Dated : 16th October, 2018 EDN आदेश की #ितिलिप अ&ेिषत/Copy of the Order is forwarded to : 1. अपीलाथ�/The Appellant; 2.��थ� /The Respondent; 3.आयकर आयु$(अपील) /The concerned CIT(A); 4. The concerned Prl. CIT; 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, सूरत / DR, ITAT, Surat; 6. गाड� फाईल / Guard file.