SH. DARSHAN SINGH,ROHTAK vs. ITO, ROHTAK

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ITA 356/DEL/2014Status: DisposedITAT Delhi11 August 2016AY 2009-105 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal agreed with the assessee's alternative plea to consider only the peak credit in the bank account instead of the total deposits. The addition to income should be based on this peak credit.

What were the facts?

The assessee's bank account received deposits totaling Rs. 26,52,070, which the Assessing Officer treated as the assessee's income. The assessee claimed the deposits were for his son's transport business, as the son did not have a bank account.

What were the issues?

Whether the entire bank deposits in the assessee's account, used for his son's business, constitute the assessee's income. Whether the addition should be based on total deposits or peak credit.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 234B,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI

Before: SHRI R. S. SYAL & SMT. BEENA A. PILLAI

For Appellant: Shri K. K. Guglani, Adv
For Respondent: Shri Anil Kumar Sharma, Sr. DR
Hearing: 08.08.2016Pronounced: 11.08.2016

Date of hearing: 08.08.2016 Date of Pronouncement: 11.08.2016 ORDER

PER BEENA A. PILLAI, JM:

1.

The present appeal has been filed by the assessee against the order dated 12.11.2013 passed by Ld. CIT(A), Rohtak for the Assessment Year 2009-10 on the following grounds of appeal:

1. On facts & in law, the learned CIT (A) has erred in confirming the illegal addition of Rs. 26,52,070 made by the A.O, by treating the entire deposits in appellant's bank a/c as his income.

2. On facts & in law, the learned AO/CIT (A) erred In ignoring the affidavit & other relevant documentary evidence, concerning source of deposit in bank a/c, without complying with the provisions of law and thus their orders are violative of principles of natural justice & hence liable to be vacated; &

2 I.T.A.No.356./Del/2014

3. On facts & In law, both the Ld. AO/CIT (A) erred in treating the deposits in bank a/c as appellant's income without taking into consideration the corresponding withdrawals and the net accretion in a/c.

4. On facts & in law, the Ld. AO erred in directing the charging of interest u/s 234B though the assessee had not committed any such default.

5. On facts and in law, the Ld. A.O erred in initiating penalty proceedings u/s 271 (1) (c) of IT Act without any basis or justification at all.

2.

The brief facts of the case are that the assessee filed its return of income on 20.07.2009 declaring income at Rs.1,60,923/-. The assessee derived its income from salary for the year under consideration. The case of the assessee was selected for scrutiny and notice u/s 143(2) was issued to the assessee. 2.1 During the assessment proceedings, Ld. A.O noted that the assessee had deposited Rs.26,52,070/- during the year. The assessee was asked to provide the details of deposits. The assessee submitted that his son Surender Singh, who owns two trucks, had been using his account for his business purposes, for credits and withdrawals of money through cheques received from his clients. Ld. A.O. rejected the contention of the assessee and made addition of the total credited amount of Rs.26,52,070/- to the income of the assessee. 2.2 Aggrieved by the order of Ld. A.O., assessee preferred appeal before Ld., CIT(A). Detailed submissions were filed

3 I.T.A.No.356./Del/2014 before Ld. CIT(A). Ld. CIT(A) confirmed the addition made by the Assessing Officer. Aggrieved by the order of Ld. CIT(A), assessee is in appeal before us now.

3.

Before us, it has been submitted by the Ld. A.R. that Shri Surender Singh, son of the assessee, owns one light commercial vehicle and one heavy commercial vehicle for his transport business. Photocopies of R.C. books are placed at pages 10-19 of the Paper Book, which were also submitted before the authorities below. As son of the assessee was not having bank account, he deposited cash/cheques received from his transport business, into the account of the assessee and withdrew the amount as and when required. The bank statements are placed at pages 1-8 of the Paper Book before us. Ld. A.R. submitted that this income pertains to his son, which stood explained by these documents.

4.

On the contrary, Ld. D.R. submitted that assessee could not produce his son’s address at the time of assessment proceedings, due to which, the details could not be verified. He submitted that the addition made by the Assessing Officer needs to be confirmed.

5.

In the rejoinder, Ld. A.R. submitted that details of the assessee’s son was asked without giving sufficient time to the assessee and the Ld. A.O. concluded the assessment in haste. Alternatively, Ld. A.R. submitted that it would be justified if only the peak credit is added and the assessee may be given benefit of withdrawals.

4 I.T.A.No.356./Del/2014

6.

Ld. D.R. does not object to the alternative plea made by the Ld. A.R.

7.

We have perused the orders of authorities below and considered the arguments advanced by both the parties. We are in agreement with the alternate plea submitted by the Ld. A.R. In view of the above we direct the Ld. A.O. to calculate the peak credit and tax the same accordingly. 8. In the result appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 11th Aug., 2016.

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