2017 (2) TMI 393 - AT - Income Tax

Taxation of entire deposits in the bank - peak surrendered by assessee - Held that - Admittedly, neither any other source of income has been pointed out by AO nor any investment out of withdrawals from bank has been shown. Under such circumstances, assessee s explanation that both the bank accounts were in relation to its business, cannot be doubted. In our opinion, the peak surrendered by assessee should have been accepted by lower revenue authorities, in the absence of books of a/c. - Hansraj vs. ITO, Faridabad 2017 (2) TMI 291 - ITAT DELHI 1702857 - Decided in favour of assessee.

Summary

Issues Involved:
- Appeal against the order of Ld. CIT(A), Faridabad for assessment year 2009-10
- Validity of the order of Ld. CIT(A)
- Denial of liability to be assessed under section 144
- Rejection of claim for surrender of peak credit of cash deposited in bank accounts
- Addition of cash deposits without proper pursuit of facts
- Charging of interest under sections 234B and 234C of the Income Tax Act, 1961
- Additional evidence submitted by the assessee before Ld. CIT(A)
- Comparison with a similar decision by ITAT, New Delhi in a related case

Analysis:

1. The Assessee challenged the order of Ld. CIT(A), Faridabad for the assessment year 2009-10, raising various grounds. The primary contention was the denial of liability to be assessed under section 144 and the subsequent addition of cash deposits in the bank accounts. The Assessee also disputed the rejection of the claim for surrender of peak credit balance and the charging of interest under sections 234B and 234C of the Income Tax Act, 1961.

2. The Assessing Officer (AO) observed discrepancies in the Assessee's business details during scrutiny and noted unverifiable income declarations. The AO assessed the income at a higher amount, considering the cash deposits in the bank account as undisclosed income. The Assessee appealed before the Ld. CIT(A) and submitted additional evidence under Rule 46A for consideration.

3. The Ld. CIT(A) confirmed the addition of the unexplained cash deposit, rejecting the Assessee's surrender of peak credit balance. The Assessee, dissatisfied with the decision, approached the Tribunal for redressal. The Assessee relied on a previous decision by ITAT, New Delhi, in a similar case to support their appeal.

4. The Tribunal analyzed the facts and the decision cited by the Assessee. It found the issues in the present case to be similar to the precedent case and decided in favor of the Assessee. The Tribunal deleted the addition in dispute based on the reasoning and findings of the previous decision, thereby allowing the Assessee's appeal.

5. The Tribunal also noted that the grounds related to charging interest under sections 234B and 234C were consequential and did not require separate adjudication. Consequently, the appeal of the Assessee was allowed, and the Tribunal pronounced the order in the open court.

This detailed analysis of the judgment highlights the key issues raised by the Assessee, the arguments presented, the decisions of the lower authorities, and the final ruling by the Tribunal based on legal precedents and factual considerations.