Deputy Commissioner Of Income-Tax, C.C Xvii, Kolkata () v. M/S. Abhitaz Commercial (P.) Ltd. ().

Shri Mahavir Singh, J.M:— Both these appeals by revenue are arising out of separate orders of CIT(A), Central-1, Kolkata in Appeal Nos. 166 & 168.CC-XVIII/CIT(A).C-1/10-11 both dated 25.11.2011 Assessments were framed separately by DCIT, C.C-XVII, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) for Assessment Years 2005-2006 vide his orders dated 27.12.2010

2. The only common issue in these two appeals of revenue is against the order of CIT(A) deleting the protective addition of undisclosed cash deposit on the basis that substantive addition has become final in the hands of Dilip Kumar Nahata. For this, revenue, in both the appeals has raised following ground:

“ITA No. 191.K/2012

1. That the Ld. CIT(A) was not justified in deleting the addition of undisclosed cash deposits of Rs. 3,50,62,000/- on protective basis.”

“ITA No. 192.K/2012:

1. That the Ld. CIT(A) was not justified in deleting the addition of undisclosed cash deposits of Rs. 90,54,000/- on protective basis.”

2. Briefly stated facts are that during the course of search by police, a sum of Rs. 19.76 lacs was seized by S.H.O Chotti Gawi Toli Police Station at Indore on 15.10.2004 Subsequently, the Income Tax Department conducted search u/s. 132 of the Act on the assessee's bank account No. 623505378880 maintained with ICICI Bank, Mumbai Branch on 25.10.2004 During the course of search, cash deposits to the extent of Rs. 7,59,29,000/- was found. Statement from Shri Manoj Basir, the Director of the assessee company was recorded by DDIT, Inv., Kolkata wherein it was admitted by the Director that he is only a name lender Director of the company whereas the entire control is with one Shri Dilip Kumar Nahata. Shri Dilip Kumar Nahata subsequently admitted that this bank account maintained with ICICI Bank belongs to him and all cash deposits in the said bank account also belongs to him. This fact was admitted by Shri Dilip Kr. Nahata in his deposition made with DDIT, Inv, Kolkata. Accordingly, protective assessment was made in the hands of the assessee by the AO for the reason that in case if any doubt of ownership income should be assessed here in the hand of present assessee. The CIT(A) exactly on this fact deleted the addition that substantive addition has been made and confirmed in the hands of Shri Dilip Kr. Nahata. Now before us, Ld. counsel for the assessee filed copy of assessment order for AY 2005-2006 in the case of Dilip Kr. Nahata order passed u/s. 263 r.w.s 143(3) of the Act dated 22.02.2013 by ACIT, Circle-34, Kolkata wherein the peak credit of the aggregate deposit of six bank accounts maintained with ICICI Bank at Rs. 24,11,93,400/- was accepted. The relevant six bank accounts maintained with ICICI Bank are as under:

Sl. No. A/c. No. Branch Name of the account holder Amount found (Rs. In lakh) Amount seized (Rs. In lakh) 1 000605005027 Kolkata Kankan Textiles 10.08 10.08 2 627605251425 Kolkata Pinky Hosiery 5.24 5.23 3 627605251442 Kolkata Puja Traders 14.21 14.20 4 016105000912 Kolkata Jack up Consultant 3.80 3.75 5 623505378889 Kolkata Abhitaj Commercial Co. Ltd. 22.70 22.70 6 634305004092 Guwahati Pinky Commercial Co. Ltd. 0.04 - Total 56.07 55.96

AO recorded the finding that peak addition is to be made in respect to these six accounts and the relevant findings read as under:

“Regarding the peak amount for addition, the Assessing Officer wrote that the appellant failed to explain the sources of deposits. The aggregate amount of deposit in the six bank accounts is Rs. 24,11,93,400/-. If the appellant claimed that the fresh deposits were made from earlier withdrawals and that ultimately all funds thus rotated belonged to his client, the appellant must prove this proposition through documentary evidence.”

The assessee explained the credit separately for the six accounts and indicated the peak amount in each of the cases as under:

Sl. No. Name of the firm Account No. Peak Credit 1 Puja Traders Prop. Azad Kumar Nahata 627605251442 ICICI Bank, Brabourne Rd. 19,41,190/- 2 Kankan Textile Prop. Mr. Manoj Basir 000605005027 ICICI Bank, R.N Mukherjee Road Br. 12,48,700/- 3 Jack-up Consultants 016105000912 21,10,000/- 4. Pinky Hossiery Prop. Manoj Basir 627605251452 ICICI Bank, Kolkata Main Br. 18,73,710/- 5. Abhitaj Commercial Co. (P.) Ltd. 62350537889 ICICI Bank, Fort Mumbai Br,. 22,70,000/- 6. Pinky Commercial Co. (P.) Ltd. 6343050004092 ICICI Bank, Guwahati Br. 9,04,800/- Total 1,03,48,400/-

And finally, the AO accepted the peak credit of Rs. 63,64,160/- by observing as under:

“Following the concept of peak, highest or peak of the amounts i.e Rs. 63,64,160/- in the consolidated peak credit chart of six bank accounts submitted by the assessee is taken as unexplained cash credit and added back to the total income of the assessee.”

3. Ld. counsel for the assessee fairly stated that once the entire amount is accepted by Shri Dilip Kr. Nahata, the beneficiary, owned up the bank accounts the protective addition made here in the present case should be deleted. On query from the bench whether any appeal is filed against this assessment order of Shri Dilip Kr. Nahata for the AY 2005-2006 passed u/s. 253/143(3) of the Act dated 22.02.2013, the Ld. counsel for the assessee replied negatively and stated that he is making statement at Bar that no further appeal is made in this case. On further query from the bench, the Ld. Sr. DR fairly stated that once the substantive addition is accepted by AO in the case of Dilip Kr. Nathata, this this protective addition can be deleted. The facts are very clear in the present case and here admittedly the issue is protective addition on the basis of deposits made in bank accounts, which has been accepted in substantive addition. Once this is the position, we are of the view that this protective addition should be deleted. We order accordingly.

4. Similar are the facts in the case of Pinky Commercial Pvt. Ltd. in ITA No. 192.K/2012, wherein similar are the deposits and protective addition in the case of the assesee and substantative addition in the hands of Dilip Kumar Nahata in the same AY 2005-2006. The facts are already brought in this order at para 3 above in ITA No. 191.K/2012. The substantial portion of the assessment order of Shri Dilip Kumar Nahata is reproduced which also contains the six bank accounts of ICICI Bank in the name of the assessee i.e 634305004092 maintained at Guwahati Branch. As the facta are exactly identical, we delete the protective addition made in the case of the assessee exactly on same facts. We order accordingly.

5. In the result, both appeals of revenue are dismissed.