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TMI Blog2017 (10) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... J. Shri Subhash Agarwal, Advocate appearing on behalf of the assessee. Shri Sailen Samaddard addl.CIT appering on behalf of the Revenue. ORDER:- This appeal filed by the assessee is directed against the order of Ld. CIT (Appeals) Durgapur dated 28.10.2016 and the grounds raised by the assessee therein read as under: 1. For that on the facts and circumstances of the case, the Ld. CIT (A) was not justified in confirming the addition of ₹ 5,42,428.31/-, 3,52,661.88/- and 4,55,950.24/- being the peak credit balance in the SB accounts of Smt. Mamata Dey, Smt. Moupiya Dey and Shri Somnath Dey respectively. 2. For that on the facts and in the circumstances of the case, the Ld. CIT (A) ought to have deleted the addition of ₹ 1,66,287/- made by the AO being the agricultural income of the appellant. 3. For that on the facts and in the circumstances of the case, the Ld. CIT (A) ought to have deleted the addition of ₹ 78,594/- made by the AO in respect of the alleged difference in the amount of purchases from M/s. Venkatrama Poultries Ltd. 4. For that on the facts and in the circumstances of the case, the Ld. CIT (A) ought to have deleted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have heard the arguments of both the sides and also perused the relevant material available on record. The learned counsel for the assessee has contended that all the transactions reflected in the 3 bank accounts in question maintained in the names of the family members of the assessee were related to his business and therefore only the profit element involved in the credits appearing in the said bank accounts can be added to the total income of the assessee. I find it difficult to accept this contention of the learned counsel for the assessee in the absence of any cogent evidence to support and substantiate the same. He has also raised an alternative argument that the combined peak credit balance of all the 3 bank accounts in question only can be added to the total income of the assessee and not the total of peak credit balances appearing in the individual accounts. In support of this contention, he has relied on the decision of this Tribunal in the case of ITO vs Uday Shankar Mahawar rendered vide an order dated 16.07.2010 passed in ITA no 1903/Kol/2009. A copy of the said order is also placed by him on record and perusal of the same shows that a similar issue was decided by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustification in the objection raised by the AO against the amalgamation of the two bank accounts. The amalgamation of all the deposits and withdrawals in respect of all undisclosed bank accounts is an integral part of the peak credit theory. For, any withdrawal made from an undisclosed bank account is available with the appellant for subsequent deposits in the same bank account or in other undisclosed bank accounts. And therefore, for any withdrawal made from any undisclosed bank accounts, corresponding credit has to be allowed against subsequent deposits made in the same bank account or in other undisclosed bank accounts. Even the AO has admitted, in his remand report, that there are transactions inter-linking the two bank accounts. These inter-linking transactions relate to fund transfers. I agree with the Ld. AR that, in case of inter-linking transactions by way of cash, there can naturally be no evidence. I find substance in the contention of the appellant that once the peak credit method is accepted, then the combined peak credit worked out on the basis of amalgamated deposits and withdrawals of all the undisclosed bank accounts is the only correct method for determining the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly treated the peak balance of ₹ 7,50,975/-as an unexplained investment made by the assessee in the nature of credits in the said bank account and therefore, the addition of ₹ 7,50,975/- is only called for. The order of the Ld. CIT (A) is therefore, upheld .In the case of ACIT vs Praveen Kumar Agarwal [IT (SS) A No. 61 74/Kol/2003], the Hon ble ITAT, C Bench, Kolkata upheld the combined peak credit method. In this case, the appellant maintained various undisclosed bank accounts. The AO added the entire deposits amounting to ₹ 23,55,26,844/-. The Ld. CIT (A) confirmed the addition only to the extent of the combined peak credit of ₹ 23,92,582/-. The Hon ble ITAT upheld the decision of the Ld. CIT (A) and observed as under: The Ld. CIT (A) has thereafter observed that since there are debits and credits in the above seized material and since these are regular debits and credits in the accounts and no material has been found to show that the debit/withdrawals have been used for any investment or any expenditure by the assessee, it means that the money withdrawn was being regularly being routed back into accounts through the medium of companies and in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the assessee and direct the AO to restrict the addition on this issue to the extent of combined peak credit balance of all the 3 bank accounts in question. The working of such combined peak credit has been prepared and furnished by the assessee at page no 51 of his paper book showing the combined peak credit balance at ₹ 5,44,775/-. The AO is directed to verify the said working and allow appropriate relief to the assessee on this issue. Ground no 1 of the assessee s appeal is thus partly allowed. 7. As regards the issue involved in ground no 3 relating to the addition of ₹ 78,594/ made by the AO and confirmed by the Ld. CIT (A) on account of difference in the amount of purchases made by the assessee from M/s. Venkatrama Poultries Ltd., it is observed that the purchases made by the assessee from M/s. Venkatrama Poultries Ltd. during the year under consideration were shown at ₹ 16291174/-. The enquiry conducted by the AO with the said party howeverrevealed that the purchases made by the assessee were to the tune of ₹ 1,62,12,058/-. There was thus a difference of ₹ 78,594/- and since the assessee could not reconcile or explain the same, an ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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