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2015 (2) TMI 1237 - AT - Income TaxAddition u/s 69A - cash deposits in the bank account - Held that:- A.O. has not brought any evidence on record to prove that the assessee has spent the amount withdrawn somewhere else. The theory of peak credit is not applicable in the case of the assessee because the assessee never accepted it to be unexplained money. Therefore, in the absence of complete details and considering the fact that the amount of cash was rotating in the bank account of the assessee with Kotak Mahindra Bank, Rajpura by making cash deposits and immediately withdrawing the same would show that the entire cash deposits in the bank account may not be unexplained amount of the assessee. Therefore, it would be reasonable and proper to give some substantial benefit to the assessee for the purpose of deleting part of addition on this issue. In view of the above discussion, we are of the view that ends of justice would meet if the addition of ₹ 10 lacs is deleted. The addition may be restricted to ₹ 7,35,200/- only. We accordingly, modify the orders of the authorities below and delete the addition of ₹ 10 lacs, the addition would now be restricted to ₹ 7,35,000/- - Decided partly in favour of assessee. Addition on account of higher closing stock - return filed under section 44AF - Held that:- The addition is wholly unjustified. Since the return is filed under section 44AF of the Act, the assessee need not to maintain any books of account. Whatsoever cash book or ledger was prepared by the assessee, was not believed by the Assessing Officer while making the addition on account of unexplained cash with Kotak Mahindra Bank, Rajpura. In the balance sheet filed with the return of income, lesser closing stock was shown but it appears that inadvertently the assessee has maintained wrong figure in the income tax return of the closing stock. Therefore, on such basis, the addition need not to be made against the assessee. Further when income is declared on presumptive basis under section 44AF of the Act, no further trading addition should be made against the assessee. - Decided in favour of assessee. Interest under section 234B which is mandatory and consequential in nature. This ground of appeal of the assessee is, therefore, dismissed. Penalty proceedings u/s 271D - Held that:- CIT (Appeals) has not discussed this issue in the appellate order as no such ground was raised before him. Since the Assessing Officer has not levied penalty against the assessee and merely initiated penalty proceedings would show this ground is premature and is liable to be dismissed. The penalty proceedings are distinct and separate, which is noted by the Assessing Officer in the assessment order. Therefore, no further interference is called for in the matter. This ground of appeal of the assessee is, therefore, dismissed.
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