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TMI Blog2018 (7) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... he account of the cash deposits, cash withdrawals and the unexplained undisclosed entries in the bank account - remit the issue back to the file of the A.O. to rework the peak credit balance correctly. Appeal of the revenue on this ground is allowed for statistical purposes. Gross profit addition on unaccounted purchases - CIT(A) restricted the addition to 15% of gross profit - Held that:- A.O. has not brought on record any comparable cases of others or the assessee’s own case in the earlier years for resorting for estimation of income @ 40.25%. Whereas, the CIT(A) has considered the comparable cases and observed that the rate of gross profit from copra was ranging from 4.68% to 13.25% in regular cases where the purchases and sales were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed the transactions in the regular books of accounts. The A.O. worked out the peak credits in the bank account at ₹ 50,89,252/- and assessed the same as income under the head unexplained sources . 3. Aggrieved by the order of the A.O., the assessee went on appeal before the CIT(A) and argued that the A.O. erred in working out the correct peak credit balance. The AO worked out the peak credit balance at ₹ 50,89,252/- instead of ₹ 5.00 lakhs as on 27.2.2007. The Ld.CIT(A) upheld the addition of ₹ 5 lakhs as against the addition made by the A.O. at ₹ 50,89,252/-. 4. Aggrieved by the order of the Ld.CIT(A), the revenue is in appeal before us. During the appeal hearing, the Ld. D.R. submitted that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e peak credit balance after taking into account of all the debits and credits was worked to ₹ 5.00 lakhs which was upheld by the Ld.CIT(A) and no interference is called for in the order of the Ld. CIT(A). 6. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The assessee is operating ICICI bank account bearing No.030301000019 which was not disclosed to the department in the Income tax return. Though the assessee claimed that the transactions in the said bank account was representing the purchases and sales of goods relating to others for a meager commission, the assessee failed to establish that the transactions reflected in the bank account did not pertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to third parties were brought back to the undisclosed account and the resultant cash was circulated, only the cash withdrawals cash deposits and unexplained credits should be considered for arriving the peak credit balance. 6.2 There is no dispute that the peak credit of the undisclosed bank account required to be brought to tax. This issue has been accepted by both the parties. The ld. CIT(A) has directed the A.O. to adopt peak credit of ₹ 5.00 lakhs as against a sum of ₹ 50,89,252/- worked out by the A.O. and the Ld.CIT(A) has not given the detailed working for arriving the peak credit balance. However, as observed from the order of the Ld. CIT(A), there is credit for closure of deposits made in the account on 5.3.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ICICI bank, and the A.O. has estimated the gross profit @ 40.25% on the turnover amounting to ₹ 60,86,864/- and brought to tax the amount of ₹ 24,49,962/-. The Ld. CIT(A) restricted the addition to 15% of gross profit on unaccounted purchases which worked out to ₹ 9,39,029/-. 9. Aggrieved by the order of the CIT(A), the revenue has filed the appeal and the assessee has filed the cross objections. During the appeal hearing, the Ld. D.R. argued that estimation of income @ 40.25% is reasonable since no other evidence is produced for expenditure incurred. Further the Ld. DR argued that the entire business expenditure was accounted in the regular books of accounts and nothing remained to be booked. 10. On the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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