Indrajeet Zandusing Tomar, Surat vs Department Of Income Tax

आयकर अपीलीय अिधकरण, अिधकरण, अहमदाबाद यायपीठ ''B'', अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, "B" BENCH सव ौी ौी जी. जी.सी. सी.गु ा, माननीय उपा!य", उपा!य", एवं अिनल चतुवद ' (, (, लेखा सदःय के सम" । BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER)

ITA No.1926/Ahd/2011 [Asstt.Year : 2008-2009]

ITO, Ward-9(2) बनाम/Vs. Shri Indrajeet Zandusing Tomar Surat. R-102, Rohit A/C Market Ring Road, Surat.

PAN : AAMPT 5768 L

(अपीलाथ. / Appellant) (ू0यथ. / Respondent)

राजःव क1 ओर से/ : Revenue by Shri V.K. Singh, Sr.DR िनधा 4रती क1 ओर से/ : Assessee by Shri Hardik Vora, AR सुनवाई क1 तार(ख/ : Date of Hearing 8th January, 2015 घोषणा क1 तार(ख/ : Date of Pronouncement 02-02-2015

आदे श / O R D E R

PER G.C. GUPTA, VICE-PRESIDENT: This appeal by the Revenue for the Asstt.Year 2008-2009 is directed against the order of the CIT(A).

2. The ground no.1 of the appeal of the Revenue is as under:

"1. On the facts and in circumstances of the case and in law the CIT(A) has erred in deleting the addition of Rs.1,34,836/- on account of low GP."

3. The learned DR submitted that there is a fall in GP of the assessee which the assessee could not explain, and therefore, the addition made at ITA No.1926/Ahd/2011

1% of the turnover of the assessee at Rs.1,34,836/- was quite justified. He submitted that the GP shown by the assessee for the relevant year was 6.96% in sari and dress material business, which were on the lower side. He referred to the relevant portions of the assessment order in support of the case of the Revenue. The learned counsel for the assessee has opposed the submissions of the learned DR. He submitted that the assessee has started a new proprietary concern by the name "Rakesh Fashion" , and there was practically no business in this concern in the earlier year. He submitted that there was a stock transfer worth Rs.22.39 lakhs in respect of dead stock from old concern to the new concern, and therefore, there was hardly any fall in the GP as compared to the earlier year.

4. We have considered rival submissions and perused the orders of the AO and the CIT(A). We find that the CIT(A) has passed a well reasoned speaking order on this issue. It is undisputed fact that the assessee has started new proprietary concern by the name "Rakesh Fashion" to deal in low- end sari, and there was no business in this concern in the earlier year. Moreover, there was a stock transfer of Rs.22.39 lakhs in respect of dead stock from old concern to the new concern. The fall in GP was marginal and no specific defect could be pointed by the AO in the account books of the assessee. In these facts, we are of the view that the CIT(A) was justified in deleting the addition of Rs.1,34,836/- on account of low GP and the ground no.1 of the Revenue is dismissed.

5. The ground no.2 of the Revenue's appeal is as under:

"2. On the facts and in the circumstances of the case and in law the CIT(A) has erred in deleting the addition made by the AO of Rs.2,46,75,333/-.:

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(a) Despite the fact that assessee failed to explain the source of the credit made in the two undisclosed bank a/c. (b) Holding that cash deposits made in unaccounted bank accounts by the out of states customers despite the fact that the assessee failed to furnish any documentary evidence in support of his claim. (c) Accepting fresh evidence regarding cash deposits filed in the appellate proceedings without calling remand report, thereby violating the provision of Rule 46A of the IT Rules, 1962."

6. The learned DR submitted that the CIT(A) has deleted the addition of Rs.2.46 crores which represents transaction in two undisclosed bank accounts of the assessee, and therefore, the aggregate of these bank accounts should have been added as income in the hands of the assessee. The learned counsel for the assessee submitted that the CIT(A) has already confirmed the addition of Rs.22,58,223/- which represents the peak amount of both the undisclosed bank accounts combined together out of the total addition of Rs.2.46 crores, and therefore, there is no merit in the grounds of the Revenue. He relied on the order of the CIT(A).

7. We have considered rival submissions and perused the orders of the AO and the CIT(A) on this issue. We find that the CIT(A) has passed a detailed order on this issue. The admitted fact is that the two bank accounts of the assessee with Axis Bank and ICICI Bank Ltd. were not disclosed to the department. However, the legal position on this issue is well settled that only the peak amount in such type of case could be added as income in the hands of the assessee and not aggregate of the total credit side of the account. In this case, the CIT(A) has recorded that the peak amount of two bank accounts with Axis Bank and ICICI Bank Ltd. taken together comes to Rs.22,58,223/-, and the same has been confirmed as income in the hands of the assessee and the balance addition has been

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deleted. The Revenue could not controvert this finding of the CIT(A) that the peak balance in these two undisclosed bank accounts of the assessee has been rightly calculated at Rs.22,58,223/-. In these facts of the case, we are of the view that no interference in the order of the CIT(A) is called for, and the ground no.2 of the Revenue is dismissed.

8. The ground no.3 of the Revenue is as under:

"3. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs.11,51,810/- made on account of unaccounted closing bank balance."

9. The learned DR submitted that the addition of Rs.11.51 lakhs were made on account of closing bank balance in these two undisclosed bank accounts of the assessee with Axis Bank and ICICI Bank Ltd. and the addition has been wrongly deleted by the CIT(A). He referred to relevant portions of the assessment order in support of the case of the Revenue. The learned counsel for the assessee submitted that the peak amount in two undisclosed bank accounts has already been assessed as income in the hands of the assessee by the CIT(A), and therefore, no separate addition for closing balance in these two accounts should be made. The peak balance in these two undisclosed bank accounts added as income includes the closing balances as on the last date of the accounting period.

10. We have considered rival submissions and perused the orders of the AO and the CIT(A). We find that the peak amount in these two undisclosed bank accounts with Axis Bank and ICICI Bank Ltd. has been worked out at Rs.22,58,223/- which has been directed by the CIT(A) to assess in the hands of the assessee, and therefore, there is no justification for separate addition of the closing balance as on the last date of the relevant period in these bank accounts of the assessee. The peak balance -4- ITA No.1926/Ahd/2011

in these bank accounts of the assessee would always be higher than the closing balance in the same bank accounts, and therefore, since the higher amount has already been assessed to tax in these bank accounts, no separate addition for closing balance in these bank accounts of the assessee is justified. In this view of the matter, the order of the CIT(A) on this issue is confirmed and the ground no.3 of the Revenue is dismissed.

11. In the result, the appeal of the Revenue is dismissed. Order pronounced in Open Court on the date mentioned hereinabove.

Sd/- Sd/- अिनल चतुव'द( / ANIL CHATURVEDI) (अिनल (जी. जी.सी. सी.गु ा/G.C. GUPTA) लेखा सदःय /ACCOUNTANT MEMBER उपा!य" /VICE-PRESIDENT

Copy of the order forwarded to: 1) : Appellant 2) : Respondent 3) : CIT(A) 4) : CIT concerned 5) : DR, ITAT. BY ORDER

DR/AR, ITAT, AHMEDABAD

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