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Income Tax Appellate Tribunal, “ SMC ” BENCH, AHMEDABAD
Before: SHRI N.K. BILLAIYA & SHRI MAHAVIR PRASAD
आदेश / O R D E R
PER MAHAVIR PRASAD, JUDICIAL MEMBER : This is an appeal filed by the assessee against the order of the Commissioner of Income Tax(Appeals)-V, Baroda, vide appeal no. CAB/(A)V-326/11-12 dated 02/10/2014 for the Assessment Year (AY) 2009-10, on the following Grounds: 1. The learned Commissioner of Income Tax (Appeals) - V, Baroda ["the CIT (A)"] erred in fact and in law in confirming the action
ITA No. 185/Ahd/2015 Shri Ramsingh C. Chaudhary vs. ITO Asst.Year – 2009-10. - 2 - of the Income Tax Officer, Ward 5(3), Baroda ("the AO") in making addition of Rs.8,21,803/-. 2. The learned CIT(A) erred in fact and in law in confirming the action of the AO in not allowing deduction of peak of earlier year from addition of Rs.8,21,803/-. 3. The learned CIT(A) erred in fact and in law in confirming the action of the AO in making addition of Rs.2,32,000/- invoking section 68 of the Income Tax Act, 1961 ("the Act"). 4. The learned CIT(A) erred in fact and in law in confirming the action of AO in charging interest u/s.234B of the Act. 5. The learned CIT(A) erred in fact and in law in confirming the action of AO in charging interest u/s/.234C of the Act. 6. The learned CIT(A) erred in fact and in law in confirming the action of AO in initiating penalty proceedings u/s.271(1)(c) of the Act.
The brief facts of the case are that the appellant is an individual and filed his return of income on 27/11/2009 declaring total income of Rs.3,17,939/-. The Appellant's major source of income consists of income from his business and income from partnership firm in which he is working as partner. The AO had made an addition of Rs.8,21,803/- to the returned income of the Appellant. The AO has calculated the peak of cash deposit and cash withdrawal and made addition of Rs.8,21,803/- to the income of the Appellant.
2.2 During the course of assessment proceedings, the AO has asked the details of various Bank accounts held by the Appellant. In response to the same, the Appellant has filed his submission dated 23/08/2011 submitting the details of his bank account and cash book. However, inadvertently, he forgot to mention the bank account held by him in
ITA No. 185/Ahd/2015 Shri Ramsingh C. Chaudhary vs. ITO Asst.Year – 2009-10. - 3 - ICICI Bank. During assessment proceedings, the Appellant had admitted that his accountant forgot to mention the bank account of ICICI Bank and there is no intentional failure to disclose this bank account. The Appellant has vide his submission dated 25/10/2011 submitted the bank account statement of ICICI bank. However, the AO has taken a conservative approach and doubted the cash deposit and cash withdrawal the said account.
2.3 The appellant had during the course of assessment proceedings duly explained the source of the cash deposit in the bank. The Appellant vide his submission dated 01/12/2011, submitted that cash deposits were in the nature of small advance taken for 5 to 10 days from various persons from an unorganized sector. The amount was borrowed in cash. He has explained that the amount was borrowed and deposited on various occasions as per the needs of the business.
2.4 On the other hand, ld. AO had itself seen that the assessee could not explain with evidence properly the source of said cash deposits and purpose of withdrawals made. During the course of hearing the assessee explained that the corresponding withdrawals subsequent to cash deposits were made for business purpose. The deposits of cash were unaccounted; however, considering that there are corresponding withdrawals subsequent to cash deposits. The AO adopted the peak theory. According to the peak of these cash deposits and withdrawals were worked out at
ITA No. 185/Ahd/2015 Shri Ramsingh C. Chaudhary vs. ITO Asst.Year – 2009-10. - 4 - Rs.8,21,803/- which was treated as unaccounted income of the assessee for the year under consideration and added to the total income of the assessee.
Against the said order assessee preferred first statutory appeal before the ld. CIT(A) who dismissed the appeal of the assessee.
We have gone through the relevant record and impugned order. The assessee is engaged in the trading business of foot wear and related items. It is fact that by mistake of the accountant assessee has not incorporated ICICI Bank account no.000301507944 in his regular books of accounts. Assessee took the loans in cash from the persons of unorganized sector doing money lending business for shorter term, of said 5 to 10 days. He borrowed money from them. He received gift of Rs.2,32,000/- in cash from his brother Shri Kishan Singh Choudhary, which was part of deposit in the above said ICICI Bank Account No. He has submitted the confirmation letter from his brother and also submitted Bank passbook copy and acknowledgement of Income Tax Return filed by him before the lower authorities.
The assessee filed paper book, at Page No.41 that maximum balance was Rs.5,77,082/- dated 01/04/2008 to 30/09/2008. We just fail to understand that how ld. AO calculated the figure of Rs.8,21,803/-. Therefore, we set aside the order of the ld. CIT(A) and remit this matter
ITA No. 185/Ahd/2015 Shri Ramsingh C. Chaudhary vs. ITO Asst.Year – 2009-10. - 5 - back to the file of the AO who will verify the peak amount cash deposited in the bank by the assessee and will decide the matter accordingly.
In the result, appeal filed by the assessee is allowed. This Order pronounced in Open Court on 15/12/2017
Sd/- Sd/- एन.के. �ब�लैया महावीर �साद (लेखा सद�य) (�या�यक सद�य) ( MAHAVIR PRASAD ) ( N.K. BILLAIYA ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 15/12/2017 Priti Yadav, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-V, Baroda. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad