Sukhdev Singh, Amritsar. vs Assessee

These cross appeals of the Revenue and the assessee arise from the

order of the CIT(A), Amritsar, dated 17.01.2014 for the assessment year

2008-09.

2 ITA No.190(Asr)/2014 ITA No.197(Asr)/2014

2. The Revenue in ITA No.190(Asr)/2014 for the A.Y. 2008-09, has

raised the following grounds of appeal:

"i) Whether on the facts and circumstances of the case the ld.

CIT(A) is right in reducing addition made by the AO on account of unexplained deposits from Rs.35,52,231/- to Rs.5,91,027/- granting relief of Rs.26,61,204/- on the basis of peak appearing in the bank account since the assessee never came forward on the issue of peak amount and also the nature of cash available with the assessee has never been explained.

ii) Whether on the facts and circumstances of the case the ld.

CIT(A) is right in admitting additional evidence u/s 46A of I.T.Act, as the assessee was granted sufficient opportunity during the assessment proceedings and assessee could not give any reasonable ground or explanation for non attendance during the assessment proceedings.

iii) Appellant craves leave to amend or add any or more grounds of appeal."

3. The assessee in ITA No.197(Asr)/2014 for the A.Y 2008-09, has

raised the following grounds of appeal:

"1. That the assessment order as well as the order of the Ld. CIT(A) are both against the facts of the case and untenable in law.

2. That the Ld. CIT(A) has grossly erred in sustaining an addition of Rs.5,91,027/- on account of peak credit. The Ld. CIT(Appeals) should have deleted the whole addition.

3. That the Ld. CIT(A) should have allowed the credit of the income earned during the year under consideration while sustaining the addition. Furthermore, the Ld. CIT(A) failed to appreciate that the assessee was an Income tax assessee for the last several years and he was showing income in all the years for which the Ld. CIT(A) should have allowed the credit of the same and the addition sustained by the ld. CIT(A) is not justified and the same may be deleted in toto.

3 ITA No.190(Asr)/2014 ITA No.197(Asr)/2014

4. Any other ground of appeal that may be urged at the time of hearing of the appeal."

4. The brief facts of the case are that the case of the assessee was

selected for scrutiny under CASS. As per the AIR information, the assessee

had made cash deposits of Rs.32,52,231/- in his saving bank a/c with ICICI

Bank. The AO issued show cause notice to the assessee to explain the source

and nature of the cash deposits in the said ICICI Bank. As observed by the

AO, none attended and the AO made an ex-parte assessment u/s 144 of the

Act in respect of all the deposits made in the said ICICI Bank as income of

the assessee, which was added to the returned income of the assessee.

5. Before, the Ld. CIT(A), the assessee submitted that on 27.09.2010, the

assessee himself appeared before the AO and questionnaire dated

27.09.2010 was served. Thereafter, the assessee could not attend since the

father-in-law of the assessee was seriously ill, suffering from High Blood

pressure, Sugar, Asthma & Kidney problem and the assessee was looking

after the ailing father-in-law since assessee's son was not present and he was

doing service at Calcutta. The assessee's mother-in-law had already expired

on 30.12.2009. The assessee produced the books of account in the form of

cash book and ledger and made a submission that the books of account were

not maintained for the earlier years and copy of balance sheet for the earlier

year was also filed before the ld. CIT(A). It was also submitted that in the 4 ITA No.190(Asr)/2014 ITA No.197(Asr)/2014

subsequent year i.e. 2009-10 accounts were maintained and the case was

taken up for scrutiny and the books of account of the assessee were

accepted. The assessee's submission was forwarded to the AO, who in the

first instance submitted that sufficient opportunities were given to the

assessee to submit the details. In fact, the AO in the remand report submitted

that the additional evidence should not be admitted. However, the AO was

directed to look into the submissions of the assessee vide letter dated

7.3.2013, who submitted the remand report dated 19.03.2013 and submitted

that the assessee has filed the return on 'no account basis' and produced only

cash book and ledger and no bills of purchase sale sales except one

purchase bill. The ld. CIT(A) after considering the remand report of the AO

accepted that the AO's version that the said books of account are not relied

upon. The assessee also submitted before the ld. CIT(A) that only peak

appearing in the bank account should be considered. The said submission of

the assessee was accepted and peak was worked out at Rs.7,51,027/- on

15.12.2007 and the assessee was given further credit of opening cash in hand

at Rs. 1 lac out of his opening balance of cash in hand at Rs.1,36,076/- and

Rs.60,000/- as credit against current year income of Rs.99,890/- i.e. assessee

was further provided credit of Rs.1,60,000/- out of peak worked out on

15.12.2007 at Rs.7,51,027/- and accordingly, addition of Rs.5,91,027/- was 5 ITA No.190(Asr)/2014 ITA No.197(Asr)/2014

sustained out of the addition so made by the AO at Rs.32,52,231/-, thus

giving a relief of Rs.26,61,204/- to the assessee. The cases relied upon by the

ld. Counsel for the assessee were different from the facts of the present case,

was observed by the Ld. CIT(A).

6. The Ld. DR argued that the assessee never explained nature of cash

available with the assessee. He further argued that the Ld. CIT(A) should

not have admitted the additional evidence as the assessee was granted

sufficient opportunities during the assessment proceedings.

6.1. The Ld. DR further argued that assessee had advanced a sum of Rs.

5,00,000/- to Smt. Surinder Kaur as is evident from the balance sheet as on

31.03.2008 and cash in hand of Rs.228240/- as at 31.03.2008.He further

argued that since assessee's books of account have been rejected by the Ld.

CIT(A), therefore, assessee's peak cannot be worked out as there is nothing

on record that the assessee had not utilized the withdrawals and deposited

the same in the bank account as submitted earlier.

7. The Ld. Counsel for the assessee, on the other hand, relied upon the

submissions made before the ld. CIT(A) and prayed to delete the addition

sustained by the ld. CIT(A).

8. We have heard the rival contentions and perused the facts of the case.

The undisputed facts in the present case are that as per AIR information, the 6 ITA No.190(Asr)/2014 ITA No.197(Asr)/2014

assessee has deposited Rs.32,52,231/- in the saving bank account of ICICI

Bank. The assessee did not attend the proceedings before the AO except

once i.e on 27.09.2010. The assessee submitted the explanation before the

ld. CIT(A) that his father-in-law was seriously ill and the assessee was

attending to the ailing father-in-law in the absence of the son of the father-

in-law. The mother-in-law had already expired. However, the assessee

submitted the books of account and the balance sheet of earlier year and of

the impugned year alongwith assessment of the following year i.e. 2009-10

where books of account of the assessee were accepted. The said submission

and the documents were sent to the AO for remand report, which was

submitted by the AO, where he stated that the books of account should not

be accepted. The Ld. CIT(A) accepted the version of the AO in the remand

report but agreed to work out the peak amount in the bank account. So, the

books of account were rejected by the ld. CIT(A) but at the same time,

nothing has been brought on record by the ld. CIT(A) that the withdrawal

made out of the impugned bank account has been utilized elsewhere. The

fact that assessee is doing business in earlier and also in the following year

especially in the following assessment year 2010-11 where the assessee's

case was put under scrutiny and books of account were accepted go to prove

that assessee is doing business during the year as in preceding and following 7 ITA No.190(Asr)/2014 ITA No.197(Asr)/2014

year and the withdrawals and deposits in the bank account are nothing but

business transactions. In the facts and circumstances of the case, we do not

find any infirmity in the order of the ld. CIT(A) in accepting the submission

of the assessee to work out the peak in view of our finding hereinabove.

Though, the additional evidence in the form of books of account submitted

before the ld. CIT(A), was rejected by the AO in the remand report and the

remand report was accepted by the ld. CIT(A). Therefore, ground No.2 taken

by the Revenue is misconceived, since the ld. CIT(A) has not accepted the

additional evidence under Rule 46A of the I.T.Rules, 1962 and the same is

rejected.

9. As regards ground No.1, the Ld. DR has submitted that Rs.5,00,000/-

advanced to Smt. Surinder Kaur and there was cash in hand of Rs.228240/-

with the assessee. There is no dispute the fact , as stated by the Ld. DR in

this regard that the ld. CIT(A) has worked out a peak amount of

Rs.7,51,027/-. Even if, the arguments made by the ld. DR are taken to be

correct that Rs.2,28,240/- has been retained by the assessee as cash balance

as at 31.03.2008 and Rs.5,00,000/- has been advanced to Smt. Surinder Kaur

totaling to Rs.7,28,240/-, whereas the ld. CIT(A) has worked out the peak at

Rs.7,51,027/-, which is more than Rs.7,28,240/-. Accordingly, we find no

infirmity in the order of the ld. CIT(A) and the same is upheld. Therefore, 8 ITA No.190(Asr)/2014 ITA No.197(Asr)/2014

the cross appeal of the assessee cannot be accepted for deleting the addition

of Rs.5,91,027/- in view of our findings hereinabove. In the facts and

circumstances, the appeals of the Revenue and that of the assessee are

dismissed.

10. In the result, the appeal filed by the Revenue in ITA

No.190(Asr)/2014 and that of the assessee in ITA No.197(Asr)/2014 are

dismissed.

Order pronounced in the open court on 19th February, 2015.

Sd/- Sd/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 19th February, 2015 /SKR/ Copy of the order forwarded to:

1. The Assessee:Sh. Sukhdev Singh, 1402, Gawal Mandi, Ram Tirath Road, Amritsar.

2. The ITO Ward V(4), Asr.

3. The CIT(A), Asr.

4. The CIT, Asr.

5. The SR DR, ITAT, Amritsar.

True copy By order

(Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.