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2021 (3) TMI 360 - AT - Income TaxUnexplained cash deposits in the bank account - as pointed by assessee that there are withdrawals and deposits in the cash book and the source of deposits can be explained by the Assessee with supporting evidence. It was submitted that it is an accepted rule that a withdrawal from the cash book would be a source for deposit of cash in the bank account at a later date.HELD THAT:- We are of the view that when there are deposits and withdrawals from the cash book and the source of cash deposits in the cash account is explained, the earlier withdrawal of cash can be explained as source for the subsequent deposit of cash, provided there are no evidence or circumstances to show that the earlier withdrawals could not be available to the Assessee as a source for subsequent deposit. In such circumstance one has to see the peak credit balance in the cash account and add only peak credit. The peak credit alone would have to be treated as unexplained. The peak credit theory has to take into consideration before treating the cash deposit as unexplained cash credits. Since the statement showing the withdrawals and deposits of cash in the cash account in the statement is now filed as additional evidence has not been examined by the AO, we deem it fit and proper to remand the issue to the AO for consideration afresh after affording Assessee opportunity of being heard. The Assessee will have to explain the source of cash deposit in the cash account with supporting evidence to enable the AO to accept the source of cash deposit in the cash account. Appeal of assessee is allowed for statistical purposes.
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