2022 (7) TMI 486 - AT - Income Tax

Addition u/s 68 - addition by applying the peak credit theory on the ground that the assessee failed to submit proper explanation in support of the deposits and withdrawals in the Axis Bank Account - HELD THAT - We find the learned CIT (A) sustained the addition made by the Assessing Officer. It is the submission of assessee that the groups as a whole had already disclosed additional income of Rs.22.15 crores on account of any possible errors/omissions and therefore, the addition again will amount to double addition. We find some force in the above arguments of the learned Counsel for the assessee. We find identical issue had come up before the Coordinate Bench of the Tribunal in the case of Shri Mohd.Naseeruddin the brothers of the assessee. We find after considering the submission of the assessee as well as the Revenue, the Tribunalhas deleted the addition made by the Assessing Officer u/s 68 of the Act towards unexplained cash deposits. Since the facts of the instant case are identical to the facts of the case decided by the Tribunal in the case of the brother of the assessee, therefore, respectfully following the same, we set aside the order of the learned CIT (A) and direct the Assessing Officer to delete the addition. The ground raised by the assessee on the issue of addition u/s 68 is accordingly allowed.

Summary

Issues:
- Appeal against orders dated 29.01.2021 of CIT (A)-12, Hyderabad for A.Ys 2014-15 to 2018-19.
- Addition u/s 68 of the I.T. Act for unexplained cash deposits.
- Validity of assessment u/s 153A.

Analysis:
Issue 1: Appeal against CIT (A) Orders
- The batch of appeals challenged separate orders of CIT (A) for A.Ys 2014-15 to 2018-19.
- Identical grounds raised in all appeals heard together and disposed of by a common order.

Issue 2: Addition u/s 68 of the I.T. Act
- Assessing Officer applied peak credit theory due to lack of proper explanation for cash deposits and withdrawals.
- CIT (A) confirmed the additions made by the Assessing Officer.
- Assessee argued that the group disclosed additional income to avoid litigation, which should cover the disputed amounts.
- Cited a similar case where the Tribunal deleted additions for unexplained cash deposits.
- Tribunal noted the group's disclosure of additional income and deleted the additions u/s 68, following the precedent set in a related case.

Issue 3: Validity of Assessment u/s 153A
- Assessee did not press grounds challenging the validity of assessment u/s 153A.
- Those grounds were dismissed as not pressed.

Conclusion:
- Tribunal allowed the appeal against CIT (A) orders, deleting additions u/s 68 for unexplained cash deposits for all A.Ys.
- Grounds challenging the validity of assessment proceedings u/s 153A were dismissed.
- All appeals filed by the assessee were partly allowed.