SHRI MAHESHBHAI J. RAMANI,SURAT vs. THE INCOME TAX OFFICER, WARD-9(3), SURAT

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.

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.

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.

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.

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.