Income Tax Appellate Tribunal - Kolkata
I.T.O., Ward - 30(4)/Kolkata, Kolkata vs Smt. Rita Singh, Kolkata on 15 May, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL "C", BENCH KOLKATA
BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM
आयकरअपीलसं./ITA No.2463/Kol/2013
(िनधा रणवष / Assessment Year: 2009-10)
ITO, Ward-30(4), Kolkata Vs. Smt. Rita Singh
Shyam Kunj, 14/1, Hindustan
Road(south), Kolkata-700068.
थायीले खासं ./जीआइआरसं ./PAN/GIR No. : AKUPS 5458 E
(Appellant) .. (Respondent)
Appellant by :Shri Shankar Halder, JCIT, Sr. DR
Respondent by :Shri S. Jhajharia, FCA
सुनवाईकीतारीख/ Date of Hearing : 12/03/2019
घोषणाकीतारीख/Date of Pronouncement : 15/05/2018
आदे श / O R D E R
Per Dr. Arjun Lal Saini, AM:
The captioned appeal filed by the Revenue , pertaining to Assessment Year 2009-10, is directed against an order passed by the Commissioner of Income Tax(Appeals)-XIV, Kolkata which in turn arises out of an order passed by the Assessing Officer u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'), dated 30.12.2011.
2.The revenue has raised the following grounds of appeal:
"1. Whether on the facts and circumstances of the case, the ld. CIT(A) was right in law as well as on facts in ignoring the fact that genuineness of transactions and creditworthiness of persons has not been established in the case of cash deposits of Rs. 1,28,18,125/- in the bank a/c of assessee.
S mt. R i ta S in g h ITA No.2463/Kol/2013 Assessment Year:2009-10
2. Whether on the facts and circumstances of the case, the ld. CIT(A) was right in law as well as on facts in ignoring the fact that assessee could not establish the genuineness of her claim of having opening cash balance of Rs. 31.28,125/-.
3. Whether on the facts and circumstances of the case, the ld. CIT(A) was right in law as well as on facts in not giving opportunity to the A.O to verify new documents like loan confirmation of M/s SR Exim produced before him during appellate proceedings.
4. That the appellant craves leave to add, alter, modify, delete or include any of the grounds of appeal.
3. We have heard both the parties and perused the material available on record. The brief facts qua the issue are that the assessee is a proprietor of M.K.S. Aromatics which is engaged in the business of trading in chemical, Essential oils, Aromatics and Menthol crystals. The assessee has contended that a sum of Rs. 31,28,125/- was the opening cash balance in its hand and a sum of Rs. 90,00,000/- was received from-various agriculturists on a number of dates. It was contended that the appellant had furnished the names and addresses of the parties. It was further contended that the A.O. failed to verify the facts and the addition was made. The assessee further submitted that even if the contention of the A.O. is accepted, then also the principle of peak credit needs to be applied in its case and hence the addition should be restricted only to the amount of peak credit of all the transactions in its books. It was contended that the cash book was produced before the assessing officer and the Bank statements were also submitted by the appellant before the A.O. It was further contended that all the bank statements appearing in the balance sheet of its proprietorship firm as well as in its individual balance sheet were produced before the A.O. along with cash book. The learned A/R of the appellant emphasized the fact that the opening cash in hand of Rs. 31,28,125/- could not legally be added in the current assessment year as it pertains to earlier year. It was further contended that the sum -of Rs. 90,00,000/- was received by the appellant in cash from 10 (ten) persons whose names and addresses were fully submitted to the A.O. and their identities were also proved. Besides, it was submitted that debit entry of Rs. 3,00,000/- being withdrawals from Banks was satisfactorily explained as the same was out of the money deposited in the bank accounts of the appellant. However, the Assessing Officer rejected the contention of the assessee and held that the opening cash in hand as claimed by the assessee Pa g e | 2 S mt. R i ta S in g h ITA No.2463/Kol/2013 Assessment Year:2009-10 at Rs. 31,28,125/- and cash received from the parties at Rs. 93,90,000/- as well as debit entry of Rs. 3,00,000/- claiming to be withdrawal from banks to sanctify the cash deposit in bank account is not proper and justified and its was fabricated and an afterthought event, therefore Assessing Officer considered all of these as unexplained income and made addition of Rs. 1,28,18,175/- (Rs. 31,28,125 + Rs. 93,90,000 + Rs. 3,00,000).
4. Aggrieved by the stand so taken by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition made by the Assessing Officer and confirm the peak balance of the bank account as an addition observing the following:
"5.1. Having considered the appellant's alternate ground in ground no.3 of the appeal, it is seen that the appellant has maintained books of accounts in its proprietorship firm, M.K.S Aromatics and it had also submitted an individual balance sheet before the A.O. in the course of assessment proceedings. In such individual balance sheet, the other bank accounts of the appellant were duly disclosed and on perusal of the said balance sheet, it is seen that the appellant had shown a number of transactions which have neither been disputed by the A.O. in the assessment proceedings nor the books of accounts have been rejected in this regard by the Assessing Officer. It has been contended by the ld. A/R of the appellant that all the entries in the individual balance sheet are arising out from the said cash book and the bank statements disclosed on the basis of which the addition has been made by the Assessing Officer. Having considered the cash book submitted by the appellant and the individual balance sheet, it is seen that the cash book duly reflects all cash which have been withdrawn from various banks, maintained by the appellant. For example, it was seen that on the following dates, the sums were withdrawn from the bank and deposited in the said cash book-
Pa g e | 3 S mt. R i ta S in g h ITA No.2463/Kol/2013 Assessment Year:2009-10 It is seen from the aforesaid cash book that in the similar fashion throughout the year, money has been deposited from such cash book in its own bank account and they have been withdrawn from such bank account and have been deposited in the cash book. It is not the case of the A.O. that money has been spent elsewhere by the appellant but he failed to examine the cash book properly. The A.O. failed to appreciate the fact that when the bank account shows both deposit and withdrawal of cash and appellant has duly shown the same in the cash book, the AO ought to examine such cash book anti the connected transaction instead of merely not considering such personal balance sheet of the appellant. AO need to consider the cash deposit and withdrawn vis-a-vis the documents and / or cash book as furnished / produced during the assessment proceeding and consider only the .peak credit arising out of such transaction. Hence, the appellant's contention in such respect is accepted since while making addition u/s. 68 on the basis of cash deposit only peak credit needs to be considered. In this respect, I have also observed the principles decided in the following judgments:
a) INCOME TAX OFFICER vs. MAHESHKUMAR JAYANTILAL VORA ITAT, RAJKOT BENCH - (2004) 3 SOT 96 (Rajkot) Wherein it is held that income from undisclosed sources-Cash credits-Addition-
Mode of -While making addition under s. 68 on the basis of cash deposits, only peak credits should be considered - By aggregating all deposits, they tend to get taxed twice which is against the principles of taxation. While making addition under s. 68 on the basis of cash deposits, only peak credits should be considered.
b) ASSISTANT COMMISSIONER OF INCOME TAX vs. KASHMIR TRADING COMPANY ITAT, JODHPUR BENCH - (2011) 141 TTJ (Jd) 374 : (2011) 60 DTR 459
c) M.V.MATHEW vs. INCOME TAX OFFICER - ITAT, COCHI~ BENCH - (1993) 46 TTJ(Coch) 353
d) S.R. ENTERPRISE vs. INCOME TAX OFFICER - ITAT,AHMEDABAD 'SMC' BENCH -(2002) 77 TTJ (Ahd) Respectfully following the ratio laid down in the above mentioned cases, it is held that the addition to the extent of peak of credits ought to be confirmed. As per cash book, the peak balance is Rs. 38,77,125-/-. I have already held that the cash balance of Rs. 31,28,125/- cannot be added in the hands of the assessee since it is brought forward from earlier year, the sanctity of such amount cannot be disturbed in the A.Y 2008-09, As such, out of such peak balance of Rs. 38,77,125/- , the opening balance of Rs. 31,28,125/- has to be reduced and as such only Rs. 7,49,000/- can be added in the hands of the appellant. Accordingly, the assessing officer is directed to restrict the addition to Rs. 7,49,000/-. Accordingly, the appellant gets relief of Rs. 1,20,69,125/-.
5. We have gone through the order of ld. CIT(A) and noted that ld. CIT(A) has reached on a logical conclusion and made addition based on peak credit theory. We note that by aggregating all deposits tend to get taxed twice which is against the principle of natural justice. Therefore, only peak credit should be considered.
Pa g e | 4 S mt. R i ta S in g h ITA No.2463/Kol/2013 Assessment Year:2009-10 That being so, we decline to interfere in the order passed by the ld. CIT(A), his order, on this issue, is hereby upheld and grounds of appeal raised by the Revenue is dismissed.
6. In the result, the appeal of the revenue is dismissed.
Order is pronounced in the open court on 15.05.2019.
Sd/- Sd/-
(S.S.GODARA) (DR. A.L.SAINI)
ाियकसद / JUDICIAL MEMBER ले खासद / ACCOUNTANT MEMBER
िदनां क Dated 15/05/2019
SB, Sr. PS
Copy of the order forwarded to:
1. ITO, Ward-30(4), Kolkata
2. Smt. Rita Singh
3. C.I.T(A)- 4. C.I.T.- Kolkata.
5. CIT(DR), Kolkata Benches, Kolkata.
6. Guard File.
True copy
By Order
Assistant Registrar
ITAT, Kolkata Benches
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