9911796707
TMI Blog2015 (7) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... common ground no.3 of the CO filed by the assessee. The common issue in both these grounds is that ld. AO has made an addition of Rs. 68,51,309/- on account of unexplained deposit in bank account. The ld. CIT(A) after applying the peak credit theory on the bank account restricted this addition to Rs. 9,41,557/-. The Revenue is aggrieved with deletion of addition whereas assessee is aggrieved with confirmation of addition at Rs. 9,41,557/-. 3. The brief facts of the case are that assessee has filed his return of income on 31.10.2007 declaring total income at Rs. 2,85,966/-. The case of the assessee was selected for scrutiny assessment and a notice under section 143(2) dated 4th August, 2008 was issued and served upon the assessee. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee. He worked out intra deposits and withdrawals of these bank accounts and made addition of Rs. 68,51,309/- under section 68 of the Income-tax Act, 1961 (hereafter the Act). 4. Dissatisfied with the action of the AO, assessee carried the matter before the CIT(A). He contended that after collecting the complete evidence from the bank including the details of cheque numbers it was gathered by him that he had received cheques from his clients in the business of providing the security. These cheques were discounted by him from the financier and the amounts were deposited in cash. Therefore, there is a variation between the deposits and the cheques issued by him. The first appellate authority has appreciated the contention of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the income not accounted in his books of accounts on the ground that the withdrawals made from the two bank accounts show that the cheques have been issued to different parties. The assessing officer has however, while rejecting the above alternate submission of the appellant, has not explained as to how when the cheques have been issued to different parties, representing the debits in the above two accounts the same will have a bearing the peak of the cash deposits, if it is so accepted. 5.3 In view of the discussion made above, I hold that the entire deposits cannot be taken as income of the appellant, as the two bank accounts wherein the cash deposits have been made also show debits of regular intervals. Therefore, in the fitness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the withdrawals have been made through cheques issued to different parties. 6. On the other hand, ld. counsel for the assessee relied upon the order of CIT(A) as well as he put reliance upon the decision of Hon'ble Gujarat High Court in the case of CIT vs. Tirupati Construction Co. 55 taxmann.com 308 (Gujarat). This decision has been rendered on 3rd November, 2014 in tax appeal Nos. 1010 to 1012 of 2014. He placed on record a copy of the Hon'ble High Court's decision. In this case during the course of search a paper exhibiting debit and credit entries was found. The CIT(A) applied peak credit theory. The view of the CIT(A) has been upheld by the Tribunal. The Hon'ble High Court has also dismissed the appeal of Revenue. The ld. counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k credit in both the accounts. These credits are on 14th July, 2006 in the current account and 27th January, 2007. He worked out the total of the cash deposits and thereafter computed the GP on turnover of cash deposits after 14th July, 2006 in current account and after 27th January, 2007 in savings account. The CIT(A) has worked out the GP element in these transactions. He has added the profit earned by the assessee in the business after working out the peak credit. In other words the maximum amount of the peak deposits is Rs. 3,82,688/-. This was considered as representing the investment in this activity which has been carried out with these two bank and thereafter worked out the profit element. He made an addition of Rs. 9,41,557/- which ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
