NIRAJAN LAL SAINI,JAIPUR vs. ITO, ALWAR
What did the Tribunal hold?
The Tribunal noted that while the AO's remand report accepted the source of deposits as sale proceeds, there was no party-wise purchase evidence. Therefore, the Tribunal directed the AO to calculate the peak credit and make the addition based on that.
What were the facts?
The Assessing Officer (AO) made an addition of Rs. 1,07,64,551/- on account of cash deposited in the assessee's bank account. The CIT(A) confirmed an addition of Rs. 75,99,501/- holding the deposits to be unverified.
What were the issues?
Whether the entire unverified bank deposits are taxable, or should the addition be restricted to the peak credit theory when deposits and withdrawals are present?
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(4)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- CIT v. Ishwardas Mutha12 citing270 ITR 597 · 2004 · HC
- Income-tax Officer v. Maheshkumar Jayantilal Vora8 citing3 SOT 96 · 2004 · ITAT
- 300 ITR 98 (MP) Mansuklal Ratanlal Jain (Chopra) v. Union of India (extract3 citing117 DTR 78 · 2015 · HC
- Dayal Singh & Sons. v. CIT3 citing335 ITR 90 · 2011 · HC
Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 92/JP/2017
PER SHRI KUL BHARAT, J.M.
This appeal by the assessee is directed against the order of Ld. CIT(A), Alwar dated 04.11.2016 pertaining to A.Y. 2010-11. The assessee has raised the following grounds of appeal :-
“ 1. The ld. CIT (A) has erred on facts and in law in confirming the addition of Rs. 75,99,501/- by holding that the deposit to the extent of Rs. 75,99,501/- in the bank account of the assessee remains unverified. He has further erred in confirming the addition even when the AO in the remand report has accepted the source of deposit in the bank account out of the sale proceeds of vegetables fruits, etc.
2 ITA No. 92/JP/2017 Shri Niranjan Lal Saini.
The assessee craves to alter, amend and modify any of the grounds of appeal.
Necessary cost be allowed to the assessee.
The only effective ground is against confirming the addition of Rs.
75,99,501/- by holding that the deposit to the extent of Rs. 75,99,501/- in the
bank account of the assessee remained unverified.
Briefly stated the facts of the case are that the case of the assessee
was reopened and the assessment under section 148 read with section 144 of
the Income Tax Act, 1961 (hereinafter referred to as the Act) was framed vide order dated 8th March, 2016. While framing the assessment, the AO made
addition of Rs. 1,07,64,551/- on account of cash deposited in the bank
account of the assessee. Aggrieved by this, the assessee preferred an appeal
before ld. CIT (A), who after considering the submissions, confirmed the
addition to the extent of Rs. 75,99,501/-.
Now the assessee is in appeal before this Tribunal.
The ld. Counsel for the assessee reiterated the submissions as made in
the written brief. He contended that in the remand report so called, the AO
had verified all the transactions and the ld. CIT (A) was not justified in not
accepting the remand report. He submitted alternatively that the ld. CIT (A)
ought to have applied peak credit theory. In support, he has relied on the
judgments of Hon’ble Rajasthan High Court rendered in the cases of Sind
3 ITA No. 92/JP/2017 Shri Niranjan Lal Saini.
Medical Stores vs. CIT (2015) 117 DTR 78 (Raj.), CIT vs. Ishwardass Mutha,
270 ITR 597 (Raj.), judgment of Hon’ble Andhra Pradesh High Court rendered
in the case of CIT vs. Purushottam Jhawar (2014) 220 Taxman 74 (AP). The
ld. Counsel also placed reliance on the decision of Coordinate Bench of the
Tribunal in the case of ITO vs. Mahesh Kumar Jayantilal Vora, 3 SOT 96
(Rajkot) in support of the contention that in the case of unexplained deposit,
only peak credits should be taken as by aggregating the deposits, they tends
to get taxed twice.
5.1. On the contrary, the ld. D/R opposed the submissions and placed
reliance on the judgment of the Hon’ble Punjab & Haryana High Court
rendered in the case of Dayal Singh & Sons vs. CIT,335 ITR 90 (P&H).
5.2. We have heard rival contentions, perused the material available on
record and gone through the orders of the authorities below. We find that in
remand report, the AO has stated that the assessee has deposited cash out of
sales of vegetables, fruits etc. during the assessment year 2009-10 in bank
account. There is no evidence stating party-wise purchases. In the absence
of the same, we are unable to accept the contention of the ld. Counsel for the
assessee that all the deposits are explained. However, we find that there are
both deposits and withdrawals from the bank account. Under these facts,
respectfully following the judgment of the Hon’ble Rajasthan High Court in the
case of Sind Medical Stores vs. CIT (supra), we direct the AO to work out the
4 ITA No. 92/JP/2017 Shri Niranjan Lal Saini.
peak credit and make addition on the peak credit. The ground raised is allowed for statistical purposes. 6. In the result, appeal of the assessee is allowed for statistical purposes in terms of the direction herein above.
Order pronounced in the open court on 10 /03/2017.
Sd/- Sd/-p ¼foØe flag ;kno½ ¼dqy Hkkjr ½ (Vikram Singh Yadav) (Kul Bharat) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 10 /03/2017. d/ आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Niranjan Lal Saini, Alwar. 2. izR;FkhZ@ The Respondent- The ITO Ward 1(1), Alwar. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File {ITA No. 92/JP/2017}
vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत
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