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2020 (6) TMI 208 - AT - Income TaxAddition of undisclosed income - addition ignoring the peak credit theory concept - HELD THAT:- Present case is not pertaining to an assessee doing business accommodation entry profit that cash deposits and withdrawals have been made by the assessee but by the employee Shri U.C.Panda himself on behalf of the assessee and such bank account has been owned by the assessee without any dispute. Therefore benefit of the judgment in the case of D..K.Garg [2017 (8) TMI 450 - DELHI HIGH COURT] is not available for the Revenue in the present case. We reach to a logical conclusion that the AO was not correct in holding that the entire amount of cash deposits is undisclosed income or undisclosed profit of the assessee and thus, the ld CIT(A) was not correct in confirming the entire addition made by the AO. We hold that when admittedly and undisputedly, the account was not disclosed to the department then, the amount of cash deposit cannot be ignored by the revenue authorities. In the totality of facts and circumstances of the case, we may point out that the assessee has already disclosed amount of ₹ 15 crores during search and seizure operation, wherein, the impugned bank account was found by the revenue authorities. Since, we are satisfied that the amount of cash deposit and cash withdrawals have been made by the employee Shri U.C.Panda, on behalf of the assessee and there were regular cash withdrawals and deposits have been made in the same bank, therefore, the entire amount of deposits cannot be treated as undisclosed income or undisclosed profit of the assessee. In these peculiar facts of the case, the assessee is entitled to benefit of peak credit theory of ₹ 13,06,500/- being closing balance as on 26.11.2014 - addition made by the AO is restricted to the peak credit amount of ₹ 13,06,500/- - Decided in favour of assessee partly.
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