Ashok Kumar Gupta Prop., New Delhi vs Assessee

Income Tax Officer, Vs. Shri Ashok Kumar Gupta, Ward- Ward-25(1), Prop. M/s Esquire Electronic, New Delhi. A-138, Saraswati Vihar, Delhi - 110 034. PAN : AAHPG9105D.

(Appellant) (Respondent)

Cross Objection No.330/Del/2012 No.330/Del/2012 Assessment Year : 2007- 2007-08

Shri Ashok Kumar Gupta, Vs. Income Tax Officer, Prop. M/s Esquire Electronic, Ward- Ward-25(1), A-138, Saraswati Vihar, New Delhi. Delhi - 110 034. PAN : AAHPG9105D.

(Appellant) (Respondent)

Revenue by : Shri Vikram Sahai, DR. Assessee by : Shri Mohit Gupta, CA.

ORDER

PER G.D. AGRAWAL, AGRAWAL, VP :

The appeal by the Revenue is directed against the order of learned CIT(A)-XVI, New Delhi dated 17th January, 2012 for the AY 2007-08. The assessee has also filed the cross-objection in support of the order of learned CIT(A).

2. The Revenue has raised the following grounds of appeal:-

"(i) On the facts and circumstances of the case, the CIT(A) erred in law as well as on facts in restricting the addition on account of unexplained cash deposits to 2 ITA-3239/Del/2012 & CO-330/Del/2012

peak credit even though the assessee had failed to explain the source of such cash deposits and source of speculative income with documentary evidences.

(ii) On the facts and circumstances of the case, the CIT(A) erred in law as well as on facts in setting aside the order relating to the issue of unexplained cash deposit to determine peak credit, when as per section 251 of the I.T. Act, the CIT(A) has no power to set-aside either partially or wholly the assessment order."

3. The facts of the case are that the Assessing Officer made the addition of `17,37,672/- for unexplained deposit in the bank account of the assessee. Out of the above deposit, the cash deposit was `14,30,090/- and deposit by cheque was `3,07,582/-. On appeal, learned CIT(A) sustained the unexplained deposit by cheque and in respect of unexplained cash deposit, he directed the Assessing Officer to make the addition at the value of peak credit in the bank account of the assessee instead of adding the entire cash deposit. The Revenue, aggrieved with the order of learned CIT(A), is in appeal before us. The assessee, though filed the cross-objection, but, at the time of hearing before us, he submitted that he is supporting the order of the learned CIT(A).

4. Learned DR relied upon the decision of Hon'ble Madhya Pradesh High Court in the case of Jhamatmal Takhatmal Kirana Merchants Vs. CIT - [1999] 152 CTR (MP) 311. The learned counsel for the assessee, on the other hand, relied upon the decision of Hon'ble Jurisdictional High Court in the case of Additional CIT Vs. Chetan Dass (deceased) - [1975] 99 ITR 46 (Del). The learned counsel also produced the copy of bank account of the assessee and pointed out that there were frequent deposits and withdrawals in the assessee's bank account and those withdrawals were available for the subsequent deposits.

5. We have carefully considered the submissions of both the sides and perused relevant material placed before us. At page 3 & 4 of the 3 ITA-3239/Del/2012 & CO-330/Del/2012

assessee's paper book, the assessee has given the details of cash deposit and withdrawal in his bank account, from which, we find that there are frequent deposits and withdrawals in round figure in assessee's bank account. The withdrawals as well as deposits are ranging from `10,000/- to `1,00,000/-. On these facts, in our opinion, the decision of Hon'ble Jurisdictional High Court cited by the learned counsel would be squarely applicable wherein the ITAT deleted the addition on the ground that the subsequent deposit was out of the earlier withdrawals. The relevant facts of the said case read as under:-

"On the basis of an exercise book seized by the sales- tax authorities in a raid, which showed that the assessee had advanced loans of three sums amounting to Rs.30,000 in March, 1963, the Income-tax Officer assessed the sum of Rs.30,000 as income from undisclosed sources. The Appellate Assistant Commissioner and the Appellate Tribunal directed deletion of this sum of Rs.30,000 on the ground that this sum was more than covered by the withdrawals of Rs.50,000 in certain other accounts made barely two months earlier and the deposits in which accounts had also been brought to tax as income from undisclosed sources."

6. The Revenue had filed the appeal before the Hon'ble Jurisdictional High Court which was dismissed with the following finding:-

"Held, that the inference drawn by the Tribunal was neither unreasonable nor perverse nor could it be said to be based on no evidence or on mere conjecture or surmise. The Tribunal's finding was on a question of fact and no question of law arose out of its order."

7. The ratio of the above decision of Hon'ble Jurisdictional High Court would be squarely applicable to the case under appeal before us. From the details of the withdrawals and deposits in the bank, it is evident that there is frequent cash withdrawal and cash deposit. Thus, 4 ITA-3239/Del/2012 & CO-330/Del/2012

earlier withdrawal is certainly available for the deposit made in the bank account thereafter. The CIT(A) has directed to make the addition for peak credit which will in effect give credit to the assessee for the earlier withdrawal in subsequent deposits and only the peak credit on any day in the assessee's bank account would be added.

8. That the decision of Hon'ble Madhya Pradesh High Court relied upon by the learned DR would not be applicable to the facts of the assessee's case because in the said case, there was debit and credit in 'Haste Khate' and not in the bank account and moreover, when there is a decision of Hon'ble Jurisdictional High Court, the same is binding upon us. We, therefore, respectfully following the above decision of Hon'ble Jurisdictional High Court, uphold the order of learned CIT(A) and dismiss the appeal filed by the Revenue.

9. By the cross-objection, the assessee only supported the order of learned CIT(A) and has not claimed any further relief. Therefore, the assessee's cross-objection is treated as infructuous and rejected as such.

10. In the result, the appeal of the Revenue and the cross-objection of the assessee are dismissed.

Decision pronounced in the open Court on 30th January, 2015.

Sd/- Sd/- (CHANDRA MOHAN GARG) GARG) (G.D. AGRAWAL) AGRAWAL) JUDICIAL MEMBER VICE PRESIDENT

Dated : 30.01.2015 VK. 5 ITA-3239/Del/2012 & CO-330/Del/2012

Copy forwarded to: -

1. Revenue : Income Tax Officer, Ward- Ward-25(1), New Delhi.

2. Assessee : Shri Ashok Kumar Gupta, Prop. M/s Esquire Electronic, Electronic,

A-138, Saraswati Vihar, Delhi - 110 034.

3. CIT

4. CIT(A)

5. DR, ITAT

Assistant Registrar