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2011 (3) TMI 922 - AT - Income TaxUndisclosed investment - Block Assessment - income earned from interest and understated in the regular returns was reinvested/rotated in the trade of the assessee - capital was already available to the assessee from the past disclosures, income from current trade, profits already shown apart from the disclosure made in the block return - Held that:- The peak theory worked out by the A O for the purpose of making addition on account of undisclosed investments was not valid because the seized paper BS-44 showed that there is a trade practice as a commission agent to allow for a payment the grace period from 15 to 30 days and payments are made to the farmers when the sales were realized and adequate cash balance is available with the assessee. Therefore, the assumption of the A O and his working of the peak credit suffered from fatal flaw and was not based on any evidence or material. The A O presumed payment on the same day by following the rules of marketing committee without pointing out from the seized papers whether such practice was found from the seized papers. Moreover the market committee rules cannot be treated as evidence found as a result of search. - in the absence of any evidence there was no justification for making separate addition for the estimated undisclosed investments, Cross Objection of the assessee allowed.
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