9911796707
TMI Blog2011 (9) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... M:- The Revenue has filed appeals against respective orders of the ld. CIT(A)- Central, Jaipur dated 01-09-2010 for the assessment years 2006-07, 2007-08 & 2008-09. The grounds of appeal for all the assessment years are similar except one ground of appeal which has been raised for the assessment year 2007-08 and 2008-09. 2.1 We are reproducing the grounds of appeal for the assessment year 2007-08. ''1. Whether on the facts and circumstances of the case, the ld. CIT(A) has erred in law and on facts in reducing the peak amount of advances made by the assessee to ₹ 15,19,92,500/- for the assessment year 2006-07, 2007-08 and 2008-09 as against ₹ 25,64,35,000/- calculated by the AO. 2. Whether on the facts and circumstances of the case, the ld. CIT(A) has erred in law and on facts in reducing the unaccounted advances made by the assessee to ₹ 27,64,000/- as against ₹ 17,43,95,000/- calculated by the AO. 3. Whether on the facts and circumstances of the case, the ld. CIT(A) has erred in law and on facts in holding that the AO's method of treating each contended lender separately and then grossing up the amount of peak unaccounted advance was not correct. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO in his order is reproduced as under:- A.Y. Net Income Head of income offered Others 2002-03 8,00,000/- Investment in advances (hundies) Income offered on account of asset/ expenditure approach and UDI gets automatically taxed when the asset found in search have been offered to tax 2004-05 2,05,000/- Investment in advances (hundies) 2007-08 26,00,000 Investment in advances (hundies) 2008-09 1,95,000 Cash & house hold items/ expenses & others 2.6 The AO has reproduced the reply of the assessee in Answer to Question No. 14 in the statement recorded u/s 132(4) on 29-06-07. The assessee admitted that Annexure A-1 & A-2 give the details of the amounts advanced to different persons and such amounts have been advanced after getting the loans from other parties. The entries are of indicative nature. In case, he is able to give the names and complete address of the persons from whose behalf he made the transactions and in case he fails to give these details then it should be presumed that the amounts advances are from his own undisclosed income. The assessee vide his letter dated 12th July, 2007 and 23rd July, 2007 offered the additional incme of ₹ 6,13,75,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the borrowers and lenders. The assessee has been searched and no asset of any worth was found. The assessee is aged of 70 years and is having no other source of income. In case the demand is raised by virtue of the addition then the same should be recovered from the parties in respect of whom the addition is being made in the case of the assessee. 2. The transactions entered in the Annexure A-3 and A-4 are mentioned on the due date and the dates mentioned is not real date of transaction. The money being lent for fixed period and the date on which money is receivable is mentioned in the transaction. The transactions if renewed then it is again recorded on the due date. 3. The total transaction comes to ₹ 1,04,69,77,000/- and the assessee has earned brokerage of 0.10% which means that the brokerage income will be ₹ 10,46,977/-. 4. The transactions which have not been renewed are also entered and if these transactions are excluded then the amount will be reduced by figure of ₹ 8,15,80,000/- 5. The burden is on the revenue to prove that apparent is not real. The transactions as recorded in the documents clearly suggest that the nature of amounts being given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) has recorded the findings that the AO was justified in holding that the assessee is advancing the money out of his unaccounted income. The ld. CIT(A) agreed with alternative arguments of the ld. AR that when the AO has presumed that the assessee could lender of money lender then there is no requirement to make working of the peak monthwise. On the basis of such working of the peak, the ld. CIT(A) held that the amount which is required to be added for three assessment years will be as under:- Peak of the transactions relating to assessment year 2006-07 is to be considered as undisclosed income ₹ 13,91,51,000/- Peak of the transactions relating to assessment year 2007-08 is to be considered as undisclosed income ₹ 27,64,000/- Peak of the transactions relating to assessment year 2008-09is to be considered as undisclosed income ₹ 1,00,77,500 2.13 We have heard ld. DR and perused the materials available on record. The incriminating documents have been found during the course of search . These documents clearly suggest that the assessee is indulging in money lending business. The transactions are recorded in the diaries and these diaries are to be considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that where an assessee has made a statement of facts, he can have no grievance of the taxing authority, taxes him in accordance with that statement. We are also aware of the observation made by Income-tax Appellate Tribunal, Ahemdabad Bench in the case of Asstt. CIT Vs. Shiladevi S. Agarwal (1994) 50 ITD 524, the learned Bench observed (head note): ''All that is stated by any deponent on the search day should not be taken as the truth, the whole truth and nothing but the truth. Such statements indubitably have evidentiary value and creditability in law, but the same should be viewed with great caution, particularly when the same is denied, varied or retracted or established by the defendant to have been obtained or given under mental stress, coercion, undue influence or due to any other abnormal condition and circumstances when such statement was given. If a person at later stage retracts from the statement given on the search day, then the court or Tribunal should try to ascertain the reason or circumstances from such person for doing so and, if satisfied, not to place heavy reliance on such earlier statement which has subsequently been denied and retracted.' ''The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the peak credit theory is a question of law. In that case, the credit on peak theory amounting to ₹ 1,42,846/- after considering the debits. The AO made the addition of ₹ 3.58 lacs on the basis of the credits without deducting the debits. Before the Hon'ble Jurisdictional High Court , it was submitted by the ld. Counsel for the assessee that a refinement or extension of the peak theory occurs where the credits appear not in the same account but in the accounts of different persons. If the genuineness of all the persons is disbelieved and all the credits appearing in the different accounts are held to be the assessee's own money then the assessee will be entitled to a set off and a determination of the peak credit after arranging all the credits in chronological order. Such inferences are based on normal probabilities and can be displaced by material on record which may indicate facts to the contrary. Such submissions of the assessee were against the finding of the Tribunal in not merging of the credits. However, Hon'ble Jurisdictional High Court held that benefit of ''peak credit'' theory could or could not be granted to the assessee is really question of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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