Entire Bank Deposits As Unexplained Deposits By Clearlydeviating From The Principles Ofjudicial Consistency Whichis Trite Law In View Ofjudgment In The Case Ofr v. Commissioner Ofincome Tax, Air 1992 Sc37 7

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA No.463 of 2015 (O&M)Date of decision: 11.4.201 Dilraj Sharma .....- Appel Commissioner of Income Tax, Aayakar Bhawan, RishiNagar,Ludhiana, Punjab. ....AmeSsponde CORAM: HON BLE MR. JUSTICK AJAY KUMAR MITTALHON BLE MRS. JUSTICEK RAJ RAHUL GARG 1. Whether Reporters of local papers may be allowed to see the judgment?2. To be referred to the Reporters or not?YES3. Whether the judgment should be reported in the Digest? Present: Mr. Sunil Kumar Mukhi, Advocate withMs. Prerna Talwar, Advocate for the appellant. Ajay Kumar Mittal, J. iDelay in refiling the appeal is condoned. D |This appeal has been preferred by the appellant-assessee underSection 260A of the Income Tax Act, 1961 (in short, “the Act’) against theorder dated 10.9.2014, Annexure P.3 passed by the Income Tax AppellateTribunal, Bench ‘'B’, Chandigarh (in short, “the Tribunal’) in ITANo.173/CHD/2014, for the assessment year 2007-08, claiming followingsubstantial questions of law:- “A. Whether under the facts and circumstances of the case, theHon'ble Income tax Appellate Tribunal, 1s justified inconfirming the orders of authorities below in treating the entire bank deposits as unexplained deposits by clearlydeviating from the principles ofjudicial consistency whichis trite law in view ofjudgment in the case ofRadhasoamtSatsang vs. Commissioner ofIncome Tax, AIR 1992 SC37 7 B. | Whether under the facts and circumstances of the case, theHon'ble Income Tax Appellate Tribunal is justified in notconsidering the additional evidences during the course ofregular hearing and also in Misc. application which isagainst the trite law as held by Hon'ble Supreme Court ofIndia inTek Ram (dead) through Lrs vs. Commissioner ofIncome lax,(2013) 357 ITR 133 (SC)? CWhether the impugned order passed by the Hon'ble IncomeTax Appellate Tribunal is perverse and deserves to be setaside?’ 3]A few facts relevant for the decision of the controversyinvolved as narrated in the appeal may be noticed. The appellant-assessee 1san individual based at Ludhiana. She is engaged in the business ofcommodity exchange, resale of ladies suits and rental. She 1s also earningfrom interest. She filed return of Income for the assessment year 2007-08on 31.10.2007 declaring income ofLT1,17,351/-. The case was selected forscrutiny. The assessee appeared before the Assessing Officer in response tothe notice issued to her. She was asked to explain the source of deposits in|bank accounts and as to why these investments in saving bank accountshould not be treated as unexplained income under sections 69/69B of the Act. The assessee filed reply dated 23.11.2009 pleading that she wascarrying out work as broker for feed ingredients also and the amounts hadbeen received from the poultry farmers on various dates and the same hadbeen deposited in the bank accounts and paid through cheques to suppliers ITA No.463 of 2015 (O&M) Act. The assessee filed reply dated 23.11.2009 pleading that she wascarrying out work as broker for feed ingredients also and the amounts hadbeen received from the poultry farmers on various dates and the same hadbeen deposited in the bank accounts and paid through cheques to suppliers ITA No.463 of 2015 (O&M) of feed ingredients against bills. The appellant had received brokerage of1.5 to 2% only. The Assessing Officer presumed that the bank transactionswere circulation of money and made addition of entire deposits ofL16,78,961/-. Even LIC maturity deposits were not spared and they had beenadded as unexplained deposits. Against the assessment order, the appellantfiled appeal before the Commissioner of Income Tax (Appeals) [CIT(A)].Vide order dated 16.12.2013, Annexure A.2, the CIT(A) dismissed theappeal on the ground that there was no evidence to support the claims andres judicata was not applicable in income tax matters. Aggrieved by theorder, the assessee filed appeal before the Tribunal. The assessee alsofiled certain documents during appellate proceedings in support of her case.According to the appellant, she was not given proper advice by her counseland therefore, the entire record was not filed before the Assessing Officer,It was further submitted that since the Assessing Officer had adopted peaktheory for the assessment year 2006-07, the same was to be followed in theyear under appeal also. However, for the earlier year and even for the yearunder appeal, the documents like affidavits of farmers and supportingdocuments of financial transactions were submitted before the AssessingOfficer during penalty proceedings and therefore penalty had been droppedfor both the years. The Tribunal vide order dated 10.9.2014, Annexure A.3dismissed the appeal filed by the appellant following the case ofSudhirKumar Sharma HUF vs. CIT.The assessee filed application dated8.12.2014 for correction of factual errors. Vide order dated 19.3.2015,Annexure A.4, the said application was dismissed by the Tribunal. Hencethe instant appeal by the appellant-assessee, ITA No.463 of 2015 (O&M) 4 We have heard learned counsel for the appellant-assessee. 4 A perusal of the findings recorded by the authorities belowshows that the assessee had made several cash deposits in the bank accountand had withdrawn money by way of cheques and demand drafts issued todifferent parties. She was asked to explain the source of entries 1n the saidbank accounts. The assessee replied that she was acting as a broker for feedingredients and the amount was received from poultry/dairy farmers whichwas deposited in her bank account and was paid through cheque to thesuppliers of feed ingredients against the material. It was noticed by theAssessing Officer that the assessee in her return of income had declaredincome under the head business at)LC1,16,365/- on account of Income fromcommodity exchange of<a60,250/- and estimated income from resale ofladies suits at|“aa56,1 15/- in addition to the income declared under housproperty and other sources. The assessee had not declared any income from|the business of commission claimed to have been carried out. She alsofailed to produce the names and addresses of the parties from whom thepayments had been received and to whom cheques were issued. Since thedeposits in the bank were made in cash whereas withdrawals were madethrough issue of cheques, the plea of the assessee of circulation of moneywas not accepted and addition of|v16,78,961/- was made in the income ofthe assessee. The said findings were upheld by the CIT(A) and the Tribunal.It has been categorically recorded by the Tribunal that inspite of severalopportunities, the assessee failed to produce any evidence to establish herclaim. Alternatively, it was pleaded that addition be made on account ofpeak credit in the bank accounts. The Tribunal after following the decision in Sudhir Kumar Sharma's case (supra) upheld the addition made to theincome of the assessee. The Tribunal also considered the additionalevidence sought to be produced by the appellant and found the same to beirrelevant. The relevant findings recorded by the Tribunal read thus:- 8. We have heard the rival contentions and perused the record.The issue arising in the present appeal 1s 1n relation to the cashdeposited in the bank accounts of the assessee. The assesseehad admittedly not declared any income on account of the saidcirculation of money in his bank account with Kotak MahindraBank Limited and Oriental Bank of Commerce. The assesseehad periodically deposited cash in the said bank accountagainst which it had issued cheques to various parties. The pleaof the assessee before the Assessing Officer was that the saidamount was being deposited on behalf of the poultry/Dairyfarmers but had failed to produce any evidence in this regardnor any list of persons from whom the cash was received wasfiled. Similarly, the assessee failed to furnish any evidence asto whom the said cheques were issued from the said bankaccount. In the absence of the same, the Assessing Officermade addition on account of total cash deposited in the bankaccount. However, despite several opportunities, the assesseehad failed to produce any evidence to establish his claim andnow before us has raised the plea that in the alternative,addition 1f any be made on account of peak credit in the saidbank accounts. It may be brought on record that the assessee,on one hand had deposited cash in the said bank accounts andthereafter, withdrawn the money by way of cheques/DDs.The issue arising in the present appeal 1s 1n relation to the cashdeposited in the bank accounts of the assessee. The assesseehad admittedly not declared any income on account of the saidcirculation of money in his bank account with Kotak MahindraBank Limited and Oriental Bank of Commerce. The assesseehad periodically deposited cash in the said bank accountagainst which it had issued cheques to various parties. The pleaof the assessee before the Assessing Officer was that the saidamount was being deposited on behalf of the poultry/Dairyfarmers but had failed to produce any evidence in this regardnor any list of persons from whom the cash was received wasfiled. Similarly, the assessee failed to furnish any evidence asto whom the said cheques were issued from the said bankaccount. In the absence of the same, the Assessing Officermade addition on account of total cash deposited in the bankaccount. However, despite several opportunities, the assesseehad failed to produce any evidence to establish his claim andnow before us has raised the plea that in the alternative,addition 1f any be made on account of peak credit in the saidbank accounts. It may be brought on record that the assessee,on one hand had deposited cash in the said bank accounts andthereafter, withdrawn the money by way of cheques/DDs. 9. We find that similar issue of cash deposit in the bank accountand the non furnishing of complete details in respect of the saidcash deposit and thereafter issuance of cheques from the saidaccount had arisen before the Tribunal in cross appeals in ITANo.713/CHD/2010 and ITA No.963/CHd/2010 in the case ofand the non furnishing of complete details in respect of the saidcash deposit and thereafter issuance of cheques from the saidaccount had arisen before the Tribunal in cross appeals in ITANo.713/CHD/2010 and ITA No.963/CHd/2010 in the case of Sudhir Kumar Sharma vs. ITO relating to assessment year2007-O8 and others and vide order dated 27.6.2013....xxxxx|2007-O8 and others and vide order dated 27.6.2013....xxxxx| 9. We find that similar issue of cash deposit in the bank accountand the non furnishing of complete details in respect of the saidcash deposit and thereafter issuance of cheques from the saidaccount had arisen before the Tribunal in cross appeals in ITANo.713/CHD/2010 and ITA No.963/CHd/2010 in the case ofand the non furnishing of complete details in respect of the saidcash deposit and thereafter issuance of cheques from the saidaccount had arisen before the Tribunal in cross appeals in ITANo.713/CHD/2010 and ITA No.963/CHd/2010 in the case of Sudhir Kumar Sharma vs. ITO relating to assessment year2007-O8 and others and vide order dated 27.6.2013....xxxxx|2007-O8 and others and vide order dated 27.6.2013....xxxxx| 12. The issue raised in the present appeal 1s identical to the issuebefore the Hon'ble Punjab and Haryana High Court 1n the caseof Shri Sudhir Kumar Sharma, HUF vs. CIT, Ludhiana (supra)and following the same parity of reasoning, we uphold theaddition otfa16,78,961/- under section 68 of the Income TaxAct.”before the Hon'ble Punjab and Haryana High Court 1n the caseof Shri Sudhir Kumar Sharma, HUF vs. CIT, Ludhiana (supra)and following the same parity of reasoning, we uphold theaddition otfa16,78,961/- under section 68 of the Income TaxAct.” 6]The plea of the assessee for addition on the basis of peak creditand also for producing additional evidence which was considered to beirrelevant, had been rightly declined by the Tribunal as noticed above.ToThe Tribunal has recorded the findings after considering theentire evidence and material on record, which are pure findings of fact,Learned counsel for the appellant has not been able to demonstrate that thesaid findings are perverse or erroneous in any manner. We find no error inthe view adopted by the Tribunal. No substantial question of law arises,Consequently, the appeal stands dismissed. (Ajay Kumar Mittal)Judge April 11, 2016 G7'; (Raj Rahul Garg)Judge