2023 (8) TMI 593 - HC - Income Tax

Unexplained cash deposits - Addition of certain peak credits - AO concluded that the assessee had willfully concealed the true particulars of his taxable income and made certain additions to the income from the other sources - contention is advanced by the assessee that each and every entry qua the deposits of cash has been explained and the Tribunal was not right in upholding the direction given by the CIT (A) that addition of peak credit be made in respect of the deposits made in the bank, since bank pass books are not books of account and the provisions of Section 68 are not applicable. HELD THAT - Since the assessee did not provide evidence in the nature of cash flow statement or otherwise to explain the cash deposits and withdrawals; and even then, only peak credits were directed to be taken into account; and since the assessee himself in the appeal filed by the Department had accepted that addition to the extent of peak credit in the bank account should be sustained, we find no substantial question of law arising for consideration in this appeal and the same is accordingly dismissed.

Summary

Issues involved:
The judgment involves challenges to orders passed by the Income Tax Appellate Tribunal under Section 260-A of the Income Tax Act, 1961 for two appeals relating to assessment years 2007-08 and 2008-09.

Issue 1: Peak credits in bank pass book
The Assessing Officer concluded that the assessee had willfully concealed income, making additions to income from other sources. The 1st Appellate Authority directed the Assessing Officer to determine peak credit for bank accounts. The Income Tax Appellate Tribunal (ITAT) accepted the assessee's plea to only sustain additions to the extent of peak credit in bank accounts. The assessee contended that bank pass books are not 'books of account' and Section 68 of the Act does not apply. As the assessee did not provide evidence to explain cash deposits and withdrawals, and accepted that peak credit additions should be sustained, the appeal was dismissed.

Issue 2: Construction of building vs. investment made in cash
The assessee claimed that the amount spent on construction of a building was the same as the investment made in cash, which was not accepted by the authorities or the Tribunal. The Tribunal's finding that these amounts cannot be considered the same was upheld. It was deemed a question of fact not suitable for appeal.

Issue 3: Additions on account of jewelry found during search
The assessee disputed additions made for jewelry found during search based on invoices he disowned. This was deemed a question of fact not suitable for appeal.

In conclusion, the High Court dismissed the appeals as it found no merit in the contentions raised by the assessee, upholding the decisions made by the lower authorities and the ITAT.