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2015 (12) TMI 1612 - AT - Income TaxAddition u/s 68 - peak credit theory application - Held that:- We find from the copy of the account of the Syndicate Bank in the books of the assessee that the all deposits were of less than ₹ 50,000/- and the money was regularly withdrawn in cash by the assessee. In the present circumstances the addition of entire amount of deposits into bank of ₹ 29,79,700/- was wrong and cannot be sustained. We find reasoning in the submissions of the ld.AR that in such scenario where the regular deposits and withdrawals from the bank were made for the purpose of business of the assessee, the income could be assessed on the basis of peak cash credit only. AO framed the assessment ex-parte without giving an opportunity to the assessee, whereas the ld.CIT(A) dismissed the appeal of the assessee after rejecting the contentions of the assessee of applying peak credit theory or presumptive tax scheme under section 44AD of the Act. Under the present circumstances, we are of the opinion that ends of justice would be met if the assessee is brought to tax on the basis of peak credit worked out on the basis of deposits and withdrawals. Accordingly, we set aside the order of ld.CIT(A) and direct the AO to assess the income of the assessee on the basis of peak credit theory in the bank account of the assessee after affording a reasonable opportunity of hearing to the assessee. - Decided in favour of assessee for statistical purposes.
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