Income Tax Appellate Tribunal - Ahmedabad
Bashir Hajibhai Mansuri, , Surat vs Assessee on 14 October, 2015
आयकर अपील य अ
धकरण, अहमदाबाद यायपीठ 'B' अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
"B" BENCH, AHMEDABAD
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI MANISH BORAD, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No.2271/Ahd/2015
With
S.P.No.92/Ahd/2015
नधा रण वष /Asstt. Year: 2007-2008
Bashir Hajibhai Mansuri ITO, Ward-3(1)(2)
1/2734, Flat No.101, 1st Floor Vs Surat.
Sunkun Apartment
Opp: Rang Upavgan
Rayomond Show Room Street
Nanpura, Surat 395 001.
PN : AKAPM 2152 P
अपीलाथ / (Appellant) तयथ
् / (Respondent)
Assessee by : Shri R.N.Vepair
Revenue by : Smt. Smiti Samant, Sr.DR
सन
ु वाई क तार ख/Date of Hearing : 22/09/2015
घोषणा क तार ख /Date of Pronouncement: 14/10/2015
आदे श/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
The assessee is in appeal before us against the order of the CIT(A)-3, Surat dated 02.06.2015 passed for the Asstt.Year 2007-2008. The assessee has also moved Stay Application No.92/Ahd/2015 seeking stay of tax and interest demand of Rs.11,48,670/-. First, we shall take up the ITA No.2271/Ahd/2015 for the sake of convenience.
2. In the ground no.1 and 2, the assessee has challenged reopening of the assessment order by issuance of notice under section 148 of the ITA No.2271/Ahd/2015 with SP 2 Income Tax Act. The ld. Counsel for the assessee did not press this issue, hence, the ground no.1 and 2 are rejected.
3. The next grievance of the assessee is that the ld.First Appellate Authority has erred in confirming the addition of Rs.12,69,573/- which was added by the AO with the aid of section 69A of the Income Tax Act.
4. Brief facts of the case are that the assessee has filed his return of income on 17.7.2007 declaring total income at Rs.1,02,900/-. The AO had received information through Annual Information Report wing. The information exhibits that the assessee has bank account with ICICI Bank. He has made a deposit of Rs.12,69,573/- during the year. The ld.AO directed the assessee to explain the source of deposits in this bank account. According to the AO, the assessee failed to submit any evidence in support of his contention, therefore, the ld.AO has made an addition of Rs.12,69,573/- under section 69A of the Income Tax Act.
5. Appeal to the CIT(A) did not bring any relief to the assessee.
6. The ld.counsel for the assessee, at the very outset, submitted that before the CIT(A), the assessee has raised a plea for confirming the addition to the extent of peak credit available in this account during the year. This plea has been rejected by the CIT(A). He submitted that the amounts have been rotated in this account after withdrawing from this very account. Therefore, if the assessee failed to explain the source of deposit, then at the most only peak credit can be added and not the gross of the credit entries. The ld.DR, on the other hand, relied upon the order of the CIT(A) and submitted that concept of peak theory has been explained by the ld.First Appellate Authority.
7. We have duly considered rival contentions and gone through the record carefully. Section 69A of the Income Tax provides that wherein any financial year the assessee is found to be the owner of any money, ITA No.2271/Ahd/2015 with SP 3 bullion, jewellery etc. which is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery etc. then the money, bullion or other valuable etc. be needed to be the income of the assessee for such financial year. No doubt the assessee was found to be owner of money deposited in his saving bank account. The onus is upon the assessee to explain the source of deposits. The assessee failed to explain the source of deposits. The ld.First Appellate Authority while explaining the concept of peak theory, has observed that this theory is applicable when the bank deposit has been used for business purpose or any other purpose wherein the assessee has withdrawn the money for its business purpose and re-deposited the money in the same account. In a way, there is a rotation of funds, only then, the peak credit available in the account will be treated as income of the assessee. The ld.CIT(A) has observed that amounts have been deposited which were withdrawn through ATM or self-withdrawal. The household expenses shown by the assessee are very meager. Therefore, according to the CIT(A) the concept of peak theory will not applicable in the case of the assessee. On due consideration of this aspect, we find that the ld.First Appellate Authority has failed to construe the bank statement in right perspective. The ld.AO has reproduced a complete statement in the assessment order starting from page no.3 of the assessment order. A perusal of this account would indicate that on 3.4.2006 the assessee has withdrawn Rs.48,000/- in two instalments. These withdrawals were made through ATM/Cash. The assessee has deposited a sum of Rs.37,000/- on 4.4.2006 by cash but in two instalments. Similarly, he withdrew Rs.24,000/- on 4.4.2006, and then deposited by cash of Rs.15,000/- on 6.4.2006. There are other entries also of similar nature. On 17.4.2006 the assessee has withdrawn Rs.25,000/-, then on 19.4.2006 withdrawn Rs.21,000/-. He made a deposit of Rs.49,625/- on 20.4.2006. This ITA No.2271/Ahd/2015 with SP 4 would indicate that the amounts were withdrawn by the assessee from the bank account and on the next day or two-three days thereafter, it was re-deposited. What was the reason for deposits and withdrawals has not been disclosed by the assessee. One thing is clear that the funds were rotated in this very account. Therefore, in our opinion, the ld.AO ought to have made the addition of the peak credit/debit available on a particular day during the year instead of totaling the credit entries. We, thus, partly allow this ground of the assessee and direct the AO to restrict the addition only qua the peak credit available on a particular day in the whole year.
8. In the next ground of appeal, the assessee has challenged, the charging of interest under sections 234A, 234B, 234C and 234D of the Act.
9. The charging of interest is consequential in nature. No arguments have been advanced on this issue by the ld.counsel for the assessee, hence, this ground of appeal is rejected..
S.A.No.92/Ahd/201510. Since we have decided the appeal itself, the stay application becomes infructuous, hence, rejected.
11. In the result, the appeal of the assessee is partly allowed and that of Stay Application is dismissed.
Order pronounced in the Court on 14th October, 2015 at Ahmedabad.
Sd/- Sd/- (MANISH BORAD) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER