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2014 (7) TMI 1383 - ITAT CHANDIGARHUnexplained credits - Peak balance of the credits - credit of surrendered income - suppression of gross profit - HELD THAT:- The first addition made in the hands of the assessee is on account of estimation of gross profit rate and we uphold the said addition. In view thereof, ground of appeal in Cross Objection filed by the assessee are dismissed. Similarly, as we have upheld the order of Commissioner of Income Tax (Appeals) in giving the benefit of surrendered amount after arriving at the total addition, we find no merit in the ground of appeal No. 2 raised by the revenue. Bogus purchases - Investigation made by the AO that the concern M/s Glass Plastic Co. of India was a bogus party created by the assessee through whom no purchases or sales were made and was utilized for making bogus payments. The assessee was depositing cash in his bank account from which cheques were issued which in-turn were deposited in the bank of M/s Glass Plastic Co. of India, from which cash was withdrawn of exact amount of the cheque deposited. In view of the facts and circumstances of the case where the exercise was being carried out from day-to-day, there is no merit in treating the total deposits as unexplained and the theory of peak credit is to be applied to work out the addition in the hands of the assessee. CIT(A) direction that the addition on account of peak credits be made in the hands of the assessee and the benefit of surrendered amount should be given after making total additions in the hands of the assessee upheld - no merit in ground of appeal No. 1 raised by the revenue.
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