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2017 (6) TMI 523 - HC - Income TaxUndisclosed income u/s 69 - activity of giving emeralds to the petitioner on approval basis - money lending activity or not - Whether “peak credit theory”can be applied - validity of order of Settlement Commission - Held that:- If emeralds were given on “Jakad” basis, it cannot be for a long period because if emeralds are not approved, it would be returned - the seized documents were showing transaction for long duration - the books of account of the parties do not show a single entry of purchase of emeralds - petitioner had decoded the figure on the documents with help of Chartered Accountant and submitted that total amount involved in the money lending is ₹ 9,71,400/- with peak amount of ₹ 4,61,000/- - This itself proves that it is a case of money lending Emeralds cannot be given on approval by recording on currency notes but can be on a plain paper - on analysis of the seized materials it was noticed that no date of repayment was available for many advances - The calculation of “peak credit theory” is applied for those entries for which dates of advance and repayment are available - hence advances for which no dates are available are held to be not paid back till date of search - currency notes were recovered having writing and is not a case of unaccounted debit and credit simplicitor, thus “peak credit theory” was not applied - matter is remanded back to the Settlement Commission to decide the issue of decoding afresh, involvement of the petitioner in money lending and other issues - matter remanded back
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