B.Jenson Thanaraj, Chennai vs Assessee

This appeal of the assessee is directed against the order of

the Commissioner of Income Tax (Appeals)-II, Chennai, dated

21.01.2014 and pertains to assessment year 2010-11. 2 I.T.A. No.1232/Mds/14

2. Shri M. Karunakaran, the Ld. counsel for the assessee,

submitted that the only issue arises for consideration is with regard

to addition sustained by the CIT(Appeals) to the extent of

`20,27,531/- as unexplained cash credit. According to the Ld.

counsel, the assessee is a Director in M/s Jenson Enterprises

Private Limited. During the course of the assessment proceedings,

the Assessing Officer found that a deposit of `32,39,731/- was

made on various dates in the Savings Bank Account of the

assessee held in Axis Bank. According to the Ld. counsel, the

assessee explained before the Assessing Officer that his savings

for the last 12 years and gift received from his mother and father-in-

law on various occasions were deposited on various dates in Axis

Bank account. According to the Ld. counsel, the amount deposited

in Axis Bank was withdrawn at Tuticorin. The amount withdrawn

was also re-deposited at Tuticorin and again withdrawn at Chennai.

Therefore, according to the Ld. counsel, the very same amount was

withdrawn and used for deposit on various dates. However, the

Assessing Officer disallowed the amount of `32,39,731/- as

unexplained cash credit. On appeal by the assessee, the

CIT(Appeals), however, directed the Assessing Officer to take peak

credit to the extent of `20,27,531/-. According to the Ld. counsel, 3 I.T.A. No.1232/Mds/14

the money withdrawn from the bank was used for re-deposit.

Therefore, the CIT(Appeals) is not justified in directing the

Assessing Officer to take peak credit as unexplained cash credit.

3. On the contrary, Shri N. Madhavan, the Ld. Departmental

Representative, submitted that the assessee is one of the Directors

in M/s Jenson Enterprises Private Limited which has its Head Office

at Chennai and work place at Tuticorin. One Shri Esakki Muthu and

Shri Chermakani are the employees of M/s Jenson Enterprises

Private Limited. When the assessee issued cheques in favour of

these employees, the amounts were withdrawn by them from the

bank. There was no business dealing between the assessee and

the said employees. Since these employees were working with the

concern in which the assessee was one of the directors, the

amounts withdrawn by the employees are to be treated as

withdrawn by the assessee. The claim of the assessee that the

amount withdrawn from one place was deposited in another place,

is not substantiated by producing any evidence. The amount was

withdrawn in Chennai and it is not known how it could be deposited

in Tuticorin. Similarly, the amount claimed to be withdrawn at

Tuticorin was deposited in Chennai without any material evidence.

Inspite of that, the CIT(Appeals) came to a conclusion that the 4 I.T.A. No.1232/Mds/14

amount withdrawn from the assessee's bank account through

employees of the company was available as source for subsequent

deposit in the bank account. Accordingly, the CIT(Appeals) directed

the Assessing Officer to take only peak credit. Therefore, there is

no infirmity in the order of the CIT(Appeals).

4. We have considered the rival submissions on either side and

perused the relevant material on record. Admittedly, the assessee

is a director in M/s Jenson Enterprises Private Limited. The

assessee is maintaining a Savings Bank Account with Axis Bank at

Chennai. The assessee deposited a sum of ` 32,39,731/- during

the year under consideration. The assessee issued cheques in

favour of one Shri Esakki Muthu and Shri Chermakani, both are

employees of M/s Jenson Enterprises Private Limited. The reason

for issuing cheques was not known. The fact remains that monies

from the assessee's S.B. Account with Axis Bank were withdrawn

by these two employees on the basis of the cheques issued by the

assessee. The assessee claims that he was withdrawing money

from Chennai and re-depositing at Tuticorin. When the assessee

could withdraw at Tuticorin itself from the very same S.B. Account, it

is not known why this amount was withdrawn from Chennai and

taken to Tuticorin for re-deposit. Similarly, the money from the very 5 I.T.A. No.1232/Mds/14

same S.B. Account was withdrawn from Tuticorin and was used to

deposit in Chennai. Though this kind of statement is unbelievable,

the CIT(Appeals) found that the money withdrawn would be

available for subsequent deposit, therefore, directed the Assessing

Officer to take only peak credit. Therefore, the assessee cannot

have any grievance on the direction given by the CIT(Appeals) to

take peak credit. Therefore, this Tribunal do not find any reason to

interfere with the order of the CIT(Appeals). Accordingly, the same

is confirmed.

5. In the result, the appeal of the assessee is dismissed.

Order pronounced on 15th May, 2015 at Chennai.

sd/- sd/- (A.Mohan Alankamony) (N.R.S. Ganesan) (ए. मोहन अलंकामणी) (एन.आर.एस. गणेशन) लेखा सद य/Accountant Member या यक सद य/Judicial Member

चे नई/Chennai, th 5दनांक/Dated, the 15 May, 2015. Kri.

आदे श क/ - त6ल7प अ8े7षत/Copy to: 1. अपीलाथ,/Appellant 2. -.यथ,/Respondent 3. आयकर आयु9त (अपील)/CIT(A)-II, Chennai 4. आयकर आयु9त/CIT-II, Chennai 5. 7वभागीय - त न ध/DR 6. गाड( फाईल/GF.