2019 (7) TMI 422 - AT - Income Tax

Addition of Peak credit -t he assessee net result in share broking business was loss hence not shown and claimed in the return - on a query, the assessee filed ledger account for commodity share broking, copy of bank account with Axis Bank, statement of account with Aditya Birla Commodities Broking Ltd., profit loss account, personal account and balance sheet etc. - AO worked out the peak credit of ₹ 17,84,920/- and added the same to the total income - HELD THAT - The case of the assessee before the Assessing Officer was that in respect of commodity share broking, he has suffered loss therefore, same is not claimed in the return of income. CIT(A) it was submitted that his wife has given cash, amounting to ₹ 16.00 lakhs, which was received from her mother and submitted that same may be considered. We find that in the first instance, his case before the AO is that due to loss, transaction is not reflected in the return of income. At appellate stage, he changed his version completely and submitted that his wife has received gift from her mother and the same is given to the assessee. Inconsistent plea taken by the assessee cannot be accepted. CIT(A) has examined the alternative plea of ₹ 16.00 lakhs received from his wife and observed that the assessee failed to prove the creditworthiness and genuineness of the transaction. Therefore, confirmed the order of the Assessing Officer. That apart, return filed by the assessee was beyond due date of filing of return, therefore, the assessee cannot claim business loss after due date. CIT(A) by examining all the facts and details submitted, confirmed the order of the Assessing Officer - Decided against assessee.

Summary

Issues Involved:
1. Addition of peak credit of ?17,84,920/- by the Assessing Officer.
2. Non-consideration of the loss from share broking business amounting to ?23,67,580/-.
3. Credibility of the cash receipt of ?16,00,000/- from the assessee's wife.

Detailed Analysis:

1. Addition of Peak Credit of ?17,84,920/-:
The assessee filed a return of income declaring ?1,87,900/- from interest receipts and agricultural income of ?1,80,000/-. The Assessing Officer (AO) noticed that the assessee engaged in commodity share broking through Aditya Birla Commodities, which was not reflected in the books of accounts or the return filed. The AO calculated the peak credit from the assessee’s bank account and added ?17,84,920/- to the total income. The CIT(A) upheld this addition, noting that the books of accounts did not include share trading transactions, and the return was filed beyond the due date, disallowing the business loss claim.

2. Non-Consideration of Loss from Share Broking Business:
The assessee argued that a loss of ?23,67,580/- from share broking was not claimed in the return due to late filing. The AO and CIT(A) rejected this claim, stating that the return was filed beyond the due date, and as per Section 139(3) of the Act, losses cannot be carried forward if the return is not filed within the prescribed time. The CIT(A) emphasized that the assessee’s claim was against accounting principles and statutory provisions, thus upholding the AO’s decision.

3. Credibility of Cash Receipt from Assessee's Wife:
The assessee claimed that ?16,00,000/- was received from his wife, who in turn received it from her mother. An affidavit from the mother-in-law was submitted, but the AO and CIT(A) found this claim inconsistent and unsupported by documentary evidence. The CIT(A) noted that no affidavit or plea regarding the cash receipt was presented during the assessment, and the affidavit was not admitted as evidence. Even if considered, the affidavit alone was insufficient without corroborative evidence such as bank statements. The CIT(A) concluded that the assessee failed to prove the creditworthiness and genuineness of the transaction, thereby confirming the AO’s order.

Conclusion:
The Tribunal dismissed the appeal, finding no reason to interfere with the CIT(A)’s order. The addition of ?17,84,920/- as peak credit was upheld, the loss from share broking was disallowed due to late filing of the return, and the claim of ?16,00,000/- received from the wife lacked credibility and supporting evidence. Consequently, the appeal was dismissed, and the order pronounced in open court on April 23, 2019.