2014 (11) TMI 806 - HC - Income Tax

Benefit of peak credit on unexplained receipts and payments upheld – Nexus between receipts and payments - Materials found during the search – Held that:- While appreciating a document, it is required to be considered in its entirety and it cannot be considered in part - while appreciating the papers / documents, which according to the AO, contained accounted and unaccounted transactions on the part of the assessee, she not only failed to examine it properly but also failed in assessing the income as per law - though, the AO, herself, had prepared the account of profit and loss in respect of accounted and unaccounted entries, there was no reason assigned as to why the profit and loss account of unaccounted transactions of the assessee cannot be believed to be true – also the AO also did not take into consideration the explanations tendered by the assessee vide letters dated 10.12.2008 and 29.12.2008 - even, the working of the peak based on the seized diary given by the assessee for the concerned AYs was also overlooked by the AO and there was no reason was assigned for the same - the CIT(A) rightly held that it would be just and proper, if, the income from the transactions recorded in the seized diary are determined on the basis of highest peak, as increased by the net profit of 5 per cent on the receipts and taxed accordingly, for the relevant assessment years – the order of the Tribunal is upheld – Decided against revenue.