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TMI Blog2021 (7) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee would suggest that the explanations given by the assessee may be accepted. In that case, entire deposits could not assessed as income of the assessee. Only the income element involved in the deposits requires to be assessed as income of the assessee. In these business transactions, the assessee should be earning commission and brokerage income. Assessee has not stated anything about his rate of commission/brokerage. Considering the fact that the income element in the case of liaison works is usually high, we are of the view that the income of the assessee may be estimated @ 20% of the addition made by the AO relating to unexplained deposits. In our considered view, the same would be reasonable in the facts and circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration declaring a total income of ₹ 39.91 lakhs. The revenue carried out a survey operation u/s.133A of the Income-tax Act, 1961 ['the Act' for short] on 8.9.2016 in the hands of the assessee. During the course of Survey operations, it was noticed that the assessee was maintaining two savings bank accounts in M/s. Janata Seva Co-operative Bank Ltd., Vijayanagar Branch, Bengaluru and they were not disclosed in the books of accounts. In the statement taken during the course of survey, the assessee submitted that these bank accounts were used in the business of doing liaison works in his real estate business such as change of land use, conversion of land from agriculture to residential purposes, taking pan approval from local a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the first round, the Ld. CIT(A) dismissed the appeal of the assessee since none appeared before him. The assessee challenged the ex-parte order passed by Ld. CIT(A) by filing appeal before the Tribunal and the ITAT, vide its order dated 4.6.2018 passed in ITA No. 2901/Bang/2017, restored the matter back to the file of Ld. CIT(A). Accordingly, the impugned order came to be passed by Ld. CIT(A). 5. Before Ld. CIT(A), the assessee reiterated its contentions that the transactions in these bank accounts represented business transactions in his real estate business. In the alternative, the assessee claimed that peak credit balance should have been assessed by the A.O. The peak credit balance worked out by the assessee was ₹ 94,13,506/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies are not justified in presuming that the entire deposits belong to the assessee. He submitted that the income element involved in those deposits alone may belong to the assessee. Since there were continuous transactions of deposits and withdrawals, as an alternative, the assessee has requested the tax authorities to assess peak credit . He submitted that the peak credit worked out to ₹ 94.13 lakhs. Accordingly he prayed that the AO may be directed to assess the peak credit amount. 7. The Ld. D.R., on the contrary, submitted that the claim of peak credit has been rejected by the Ld. CIT(A). He submitted that the peak credit may be accepted only if the assessee had disclosed truly and fully the source of deposits and also proved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hwantpura, Hobli, Manganahalli Village, Bangalore North, 2) Nakshatra Residency Sy. No. 5, Sulikere, Kengeri Hobli, Bangalore South and 3) Amoghavarsha Premium Residency Layout Kenchanapura Village, Kengeri Hobli, Bangalore South. Hence, the AO has acknowledged that the assessee has earned commission income from undertaking liaison works. We also refer to some of the question and answers from the statement taken from the assessee at the time of survey operations, which have been extracted by the AO in the assessment order:- Q21. I am showing the Saving Bank account Nos. 25532 A/c. 24777 of Jantha Seva Co-operative Bank Ltd., Vijayanagar Branch in your name (i.e. Ravi Kumar V) Please comment? Ans. The Saving account numbers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land use, conversion of land from agriculture to residential purposes, taking pan approval from local authorities. Since the assessee was doing liaison works on behalf of others, it was contended that the entire deposits cannot be taken as his income. We also notice that the AO has accepted explanations to the tune of ₹ 75.00 lakhs out of the cash deposits found in these bank accounts on the basis of a cancelled sale agreement. This fact also fortifies the stand of the assessee that the transactions found in these two bank accounts relate to his real estate business. 10. We notice that the AO has assessed the entire amount of deposits as unexplained income of the assessee for want of evidences. However, considering the facts dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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