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Income Tax Appellate Tribunal, DELHI BENCHES : SMC : NEW DELHI
Before: SHRI R.S. SYAL
This appeal by the assessee arises out of the order passed by the CIT(A) on 15.12.2016 in relation to the assessment year 2011-12.
The only issue raised in this appeal is against the confirmation of addition of Rs.47,21,100/- made by the Assessing Officer on account of cash deposits in bank by invoking the provisions of section 68 of the Income-tax Act, 1961 (hereinafter also called `the Act’).
Briefly stated, the facts of the case are that the Assessing Officer, on perusal of the bank statement of the assessee, observed that cash deposits of Rs.47,21,100/- were made on various dates, which have been tabulated on page 2 of the assessment order. On being called upon to give the source of such deposits with documentary evidence, the assessee submitted that he was authorized by Shri Rattan Singh to deposit a sum equivalent to the licence fees amount out of daily cash sales in his bank account and pay a licence fee from this account. A copy of agreement in support of such a contention was also placed before the Assessing Officer. It was claimed that the assessee was awarded a sum of Rs.50,000/- for this work. The Assessing Officer required the assessee to produce Shri Rattan Singh and his books of account to substantiate the claim, which the assessee could not.
Summons u/s 131 was also issued to Shri Rattan Singh which remained uncomplied with. However, a bank certificate was filed showing that the licence fee amounting to Rs.44.69 lac was paid from the assessee’s bank account. The Assessing Officer further observed that there were cash deposit of Rs.6 lac in two instalments of of Rs.3 lac each, which were claimed to have been received from one Shri Jagram on 08.02.2011 and 21.02.2011 against the agreement to sell, which was later on returned because no agreement was actually entered into. In the backdrop of these facts, the Assessing Officer added Rs.47,21,100/- as the assessee’s income. The ld. CIT(A) gave his imprimatur to the view of the AO. The assessee’s contention for considering the peak amount for the purposes of the addition was also turned down. The assessee is aggrieved against this addition.
Having heard both the sides and perused the relevant material on record, it is observed that in so far as payment of licence fees is concerned, the bank has certified that licence fees was paid by the assessee out of his bank account and Dy. Excise and Taxation Commissioner (Excise), Gurgaon has certified that the liquor vend was allotted to Shri Rattan Singh and not Shri Om Parkash, the assessee. A copy of such certificate is placed at page 22 of the paper book. This deciphers that the assessee’s contention about the deposit of excise duty for and on behalf of Shri Rattan Singh cannot be brushed aside so easily.
However, it also remained as a fact that the assessee could not produce the books of account of Shri Rattan Singh to show that equal amount of cash was given to the assessee which was deposited in his bank account.
There is further some dispute about the source of cash deposit in the bank, being, transaction with Shri Jagram as the amount was claimed to have exchanged hands in 2011, whereas agreement placed on record is dated 2013. Taking into consideration the entirety of the facts and circumstances as obtaining in this case, I am of the considered opinion that it will be just and fair if peak credit is added to the assessee’s income instead of all the individual amounts of deposits. Such computation of peak amount has been placed at page 4 of the paper book and going by the same, it comes to Rs.4,39,620/- as on 25.02.2011. The addition is ergo restricted to this level and the assessee gets part relief. 4
In the result, the appeal filed by the assessee is partly allowed.
Order Pronounced in the open Court on 21.12.2017.