Kamlesh Grover , New Delhi vs Assessee

ITA no. 3193/Del/2010 Asstt. Yr: 2005-06 Kamlesh Grover, Vs. Income-tax Officer, 131L, Shastri Nagar, ward 19(4), New Delhi. New Delhi. PAN: AMZPG 7064 P

( Appellant ) (Respondent)

Appellant by : Shri Ashok Khandelwal CA Respondent by : Shri Gaurav Dudeja Sr. DR

Date of hearing : 29/06/2015. Date of order : 30/06/2015.

ORDER

PER S.V. MEHROTRA, A.M:

This appeal, preferred by the assessee, is directed against CIT(A)'s order

dated 19-04-2010 relating to A.Y. 2005-06. Effective grounds raised are as under:

"1. Action of the CIT(A) in confirming the addition of Rs. 20,92,955/- as income from undisclosed source is unjust, illegal, arbitrary and against the facts and circumstances of the case.

2. Action of the CIT(A) in working out the peak credit in the bank accounts of the appellant of Rs. 42,78,373/- on 8-2- 2005 and reducing the same by opening balance in the bank accounts of rs. 21,85,418/- and thus arriving at the figure of Rs.

2 20,92,955/- for the purposes of addition without the considering the peak credit in the bank account on 23-10-2003 t Rs. 42,28,625/- is unjust, illegal, arbitrary and against the facts and circumstances of the case.

3. Action of the CIT(A) in confirming the addition of the AO in passing the order without giving sufficient and reasonable opportunity of being heard is illegal, arbitrary and against the facts and circumstances of the case.

4. That the notice of hearing dt. 18-9-2007 u/s 142(1) of the IT Act, 1961 for 8-10-2007 was not served on the appellant and no notice u/s 142(1) of the Act dated 22-11-2007 issued on 26- 11-2007 for 3-12-2007 was received by the appellant and in absence of service of such notice on the appellant no valid assessment could be made."

2. Facts, in brief, are that the AO passed the order u/s 144/142(1) on 24-

12-2007 as the assessee did not respond to the notices dated 19-9-2007 and

26-11-2007. The AO on the basis of AIR information made addition of Rs.

74 lacs being the cash deposit in Canara Bank accounts. He noticed that

assessee had maintained two accounts being SB a/c nos. 16591 and 1011

with Canara Bank, Delhi. After examining the bank accounts, he noticed

that in SB A/c no. 16591 the opening balance as on 31-3-2004 was Rs.

21,85,418/- and, thereafter, up to 31-3-2005, Rs. 41 lacs were deposited as

against the total withdrawals of Rs. 63,50,000/- (Rs. 67,50,000/- minus Rs.

4,00,000/-, being withdrawal on 9-2-2004). Similarly, in SB A/c no. 1011

the AO noticed that there were deposits of Rs. 33 lacs as against the

withdrawals of Rs. 22,50,000/-. The assessee had claimed that the deposits 3

in the bank account in cash were out of own capital, earning of the year and

out of earlier withdrawals made in cash from the same account or in other

account.

3. Ld. CIT(A) did not accept the assessee's contention regarding own

capital and earning of the year as they were quite meager. He determined the

peak credit in order to ascertain the maximum amount of cash available

with the assessee at any point of time and accordingly found that on 8-2-

2005, the maximum balance was Rs. 42,78,373/- (Rs. 20,27,417/- in SB A/c

no. 1011 and Rs. 20,50,956/- in SB A/c No. 16591). This balance was

ascertained after giving liverage that the amount withdrawn from the

account was redeposited in the same account or the second account. From

this he reduced opening balance of Rs. 21,58,418/- and confirmed the

addition of Rs. 20,92,955/-.

4. Ld. counsel for the assessee submitted that peak credit has not

correctly been determined.

5. Ld. DR submitted that no details were furnished before the AO and,

therefore, the matter may be restored back to the file of AO for proper

adjudication.

6. We have considered rival submissions and perused the material

available on record. Keeping in view the fact that relevant details were not 4

filed before the AO, to be fair to both the parties and in the interest of

substantial justice we restore the matter to the file of AO for fresh

adjudication, in accordance with law, after affording reasonable opportunity

of being heard to the assessee.

7. In the result, revenue's appeal stands allowed for statistical purposes

only.

Order pronounced in open court on 30, 06,2015.

Sd/- Sd/- (H.S. SIDHU) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 30-06-2015. MP Copy to : 1. Assessee 2. AO 3. CIT(A) 4. CIT 5. DR (ITAT)