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2020 (5) TMI 552 - AT - Income TaxAddition u/s 69 - Theory of peaking credit for ascertaining unexplained investment - whether the bank account is being used for the purpose of the business in which sale proceeds have been deposited and purchases were made by using that account? - HELD THAT:- Certain ambiguities in the details filed by the assessee vis-à-vis considered by the AO. The amounts have been used for the purpose of commodity trading, and the amounts have been withdrawn periodically. Similar amounts have been deposited at roughly ₹ 49,000/- per transaction. It appears that these amounts must have been used by the assessee for trading activities, and therefore, only the peak positive or negative balance occurred in these accounts deserves to be considered as unexplained income of the assessee, because deposits and withdrawals from the same account, though through cross-bearer cheques also According to the assessee, he has availed benefit of cheque discounting and re-circulated this money for commodity trading. Possibility of truth in this allegation cannot be ruled out. It can only be ruled out, had the AO called one of the persons to whom cheques was issued, and inquired who has collected cash from the bank. Had this exercise was done, with regard to one Shri Janardhan who has withdrawn ₹ 2.50 lakhs on 12th June, then the stand of the assessee could be falsified. But no such exercise was done by the AO. Therefore alternative submission of the assessee is accepted for assessing his income at peak of credit/negative balance in this account. Thus, confirm addition which is a negative balance as on 5.9.2009 in place of ₹ 23,87,399/- made by the AO and confirmed by the ld.CIT(A). Appeal of the assessee is partly allowed.
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