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TMI Blog2015 (11) TMI 1601X X X X Extracts X X X X X X X X Extracts X X X X ..... to restrict the addition to the peak credit of all the undisclosed bank balances taken together or any other such sums which the Ld. Tribunal may consider appropriate." 3. Briefly stated facts are that as per AIR information received from revenue/department that the assessee has deposited total cash of Rs. 83,48,16,130/- in the six Axis Bank Accounts maintained with 2/1A, Lansdown tower, Sarat Bose Road, Kolkata-20 during the FY 2008-09 relevant to this AY 2009-10.The AO during the course of assessment proceedings required the assessee to prove the source of such huge cash deposits and in response, assessee filed a voluntary disclosure petition dated 01.11.2011 wherein he worked out the peak of Rs. 1,01,40,000/- on the basis of his deposits in the following six bank accounts: "(i) 411010100011307, (ii) 411010100011316, (iii) 411010100011325, (iv) 411010100014535, (v) 411010100015792 and (vi) 411010100015899" The AO made addition on account of unexplained cash credit/unexplained investment in bank deposits at Rs. 83,48,16,130/- by observing in para 6 and 7 as under: "6. As per the bank statements of the eleven savings bank accounts wherein the assessee is a joint ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Rs. 49,800/- Add: Unexplained Cash Credit/ Rs. 83,48,16,130/- Unexplained Investments in Bank Deposits as discussed above. Total Income Rs. 83,50,14,038/- 4. Aggrieved, assessee prescribed appeal before CIT(A), who also confirmed the action of AO by observing in para 5 as under: "5. The Ground No.2 & 3 of the appeal are raised against the addition of Rs. 83,48,16,130/-made by the Assessing Officer on account of unexplained deposits. I have carefully considered the assessment order and the submission of the appellant. On the basis of AIR Information r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer has given cogent reasons as to why the assessee's submission is not acceptable." Finally, the CIT(A) also rejected the peak credit theory of the assessee and confirmed the addition as made by AO of Rs. 83,48,16,130/-. Aggrieved, now assessee is in second appeal before us. 5. We have heard rival submissions and gone through facts and circumstances of the case. We find from the facts of the case that the assessee has deposited cash amounting to Rs. 83,48,16,130/- in six undisclosed bank account maintained with Axis Bank Ltd. The assessee before AO filed working of peak credit in relation to cash deposits made in these six bank accounts and requested the AO to assess the peak credit amounting to Rs. 1,01,40,000/-. The assessee claimed to have computed the peak credit of these six bank accounts taking all the deposits and withdrawals. The AO while framing assessment treated the unexplained cash credit/unexplained investment in bank i.e. cash deposits made in these six bank accounts and added to the returned income of the assessee in total. The assessee now before us claimed that he is engaged in the business of providing accommodation entries and for this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinate bench in the case of ITO vs. Shri Piyush Poddar in ITA No. 1050/Kol/2011 for AY 2006-07 dated 07.09.2015, wherein exactly on similar circumstances, the Tribunal has directed the AO to assess the peak credit and by observing held as under: "10. We have heard the rival submissions and perused the materials available on record. It is seen that the assessee apart from his regular income had a bank account with Central Bank of India which was used by him only for the limited purpose of providing accommodation entries to various parties. Initially the assessee took a stand that he was deriving finance commission @.25% of all the transactions in the accommodation entry business and offered the same to tax., However, he shifted his stand by accepting the peak credit theory before the ld. CIT(A). This is evident from the fact that he had not preferred further appeal before the Tribunal against the ld. CIT(A)'s order. In accordance with the directions of the Hon'ble Calcutta High Court, we had examined the veracity of the claim of peak credit theory made by the assessee in respect of all the transactions in Central Bank of India. It is observed that the assessee had rotated his ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. It is pertinent to look into the decision rendered by the Kolkata Tribunal in the case of Mahesh Kumar Gupta in IT(SS)A. No.11/Kol/2014 dated 0.2.2005 wherein ITAT observed that the claim of the assessee was that the cheque withdrawals were for giving loan for the short period. Held as follows :- "The AO cannot refuse to grant set off for the withdrawal made by cheque without bringing on record any materials so that the amount withdrawn by cheque cannot have been received back by the assessee and utilized by him in making subsequent deposits by cheque. Taking all this into consideration, we are of the considered opinion that AO should adopt peak credit method to arrive at the undisclosed income of the assessee in the undisclosed bank account No.SB 6664 with the Syndicate bank." Reference may also be drawn to the decision of the Hon'ble Apex Court in the case of CIT vs Smt. P.K. Noorjehan reported in 237 ITR 570(SC) wherein their lordships have held that mere unsatisfactoriness of the explanation offered by the assessee, does not, and need not, automatically result in deeming the value of investment to be the income of the assessee. That is still a matter within the discre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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