A C I T - 25(3) 308, C-11, Bandra Kurla Complex, Bandra (E) Mumbai 400051 Vs. Shri Mahendra Narayan Raju B-107, Sai Chhaya, Junction Ashok Nagar, Akurli Road Kandivali (E), Mumbai 400101
March, 03rd 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
"B" Bench, Mumbai
Before Shri D. Manmohan, Vice President
and Shri Chandra Poojari, Accountant Member
ITA No. 5073/Mum/2012
(Assessment Year: 2009-10)
A C I T - 25(3) Shri Mahendra Narayan Raju
308, C-11, Bandra Kurla B-107, Sai Chhaya, Junction
Complex, Bandra (E) Ashok Nagar, Akurli Road
Mumbai 400051 Kandivali (E), Mumbai 400101
PAN - AAHPR6420Q
Appellant by: Shri Vivek Vatra
Respondent by: Shri Ajay R. Singh
Date of Hearing: 02.03.2015
Date of Pronouncement: 02.03.2015
Per D. Manmohan, V.P.
This appeal by the Revenue is directed against the order passed by
CIT(A)-35, Mumbai and it pertains to A.Y. 2009-10.
2. The only ground urged by Revenue reads as under: -
"On the facts and in the circumstances of the case and in law, the ld.
CIT(A) erred in giving relief on the issue of addition u/s. 68 by
restricting the addition to Rs.14,01,847/- out of Rs.30,19,883/- to the
assessee without appreciating the fact that it is highly unbelievable
that a prudent man will withdraw cash from one account to deposit in
another account and when most of the withdrawals are very small to
the extent of Rs.500 to few thousand."
3. Facts necessary for disposal of the appeal are stated in brief. Assessee
is an individual earning income from three proprietary concerns. For the year
under consideration he declared total income of `45,45,189/-. Though the
return was originally processed under section 143(1) of the Act it was
subsequently taken up for scrutiny. During the course of scrutiny
proceedings the AO noticed that the assessee deposited `30,19,883/- in his
saving bank account of ICICI bank at Kandivali. The AO called for the details
with regard to availability of cash to make the deposit. In response it was
2 ITA No. 5073/Mum/2012
Shri Mahendra Narayan Raju
submitted that cash has been deposited from the cash withdrawn from
different bank accounts and cash in hand. The AO disbelieved the version of
the assessee on the ground that it was highly unbelievable that a prudent
man will withdraw cash from one account to deposit in another account.
Accordingly he made an addition of `30,19,883/- under section 68 of the Act.
4. Aggrieved, assessee contended before the CIT(A) that there were several
cash withdrawals from other bank accounts which were deposited into ICICI
Bank and therefore there is sufficient source to make the deposit. In the
alternative it was contended that even on making day to day cash balance
analysis there is negative cash balance to the extent of `14,01,847/- on
31.12.2008 and the AO could have, at best, taken the peak credit into
consideration even if the main plea is not acceptable. Detailed statement of day
to day balance is furnished before the learned CIT(A). Having regard to the
circumstances of the case the learned CIT(A) restricted the addition to
`14,01,847/- by observing as under: -
"Under the given factual matrix of the case, the appellant's submission
can't be accepted fully since there is negative cash balance on many
dates, the highest being on 31.12.2008 amounting to Rs.14,01,847/-. The
addition made by the A.O. is restricted to the amount of Rs.14,01,847/-
and the appellant gets relief of Rs.16,18,036/- since the entire cash
deposit can't be added to his income. Therefore, going by the peak credit
method, I direct the A.O. to delete the amount of `16,18,036/-."
5. Aggrieved, Revenue is in appeal before us. At the time of hearing the
learned Sr. D.R. was mainly trying to read the ground of appeal, probably
under the impression that the addition which is under dispute is
`30,19,883/-. When it was pointed out to him that the entire addition is not
in dispute he was unable to comprehend as to what is the addition which is
under dispute. At the outset it may be noticed that in the ground of appeal
addition of `14,01,84/- is challenged. The learned Sr. D.R. appears to have
not even looked into the typographical mistake and he is blissfully ignorant
of the fact that the addition, which was confirmed, was only the peak credit.
No material, whatsoever, was placed before us and no argument was
forthcoming to show that the view taken by the CIT(A) under the given
factual matrix is wrong and contrary to law.
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Shri Mahendra Narayan Raju
6. We have considered the rival submissions and carefully perused the
record. Having regard to the circumstances of the case we are of the view
that the order passed by the learned CIT(A) does not call for any
7. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 2nd March, 2015.
(Chandra Poojari) (D. Manmohan)
Accountant Member Vice President
Mumbai, Dated: 2nd March, 2015
1. The Appellant
2. The Respondent
3. The CIT(A) 35, Mumbai
4. The CIT 25, Mumbai City
5. The DR, "B" Bench, ITAT, Mumbai
ITAT, Mumbai Benches, Mumbai