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2022 (9) TMI 991 - Income Tax
Addition on account of credit in the bank account - addition of entire credit entries reflected in the savings bank account - HELD THAT:- We find that there are frequent debit and credit entries by way of cheque as well as cash, thus the entire credit entry cannot be considered as income of assessee.
Considering the various decisions of Tribunal including the Hon’ble Jurisdictional High Court either peak credit or presumption income from unaccounted business can be added. Considering the overall facts and circumstances of the case, we are of the view that 8% of credit entry would meet the possibility of revenue leakage. Accordingly, the Assessing Officer is directed to restrict the addition to the extent of 8% of credit entries in the savings bank account maintained by the assessee. In the result, ground No.2 of the appeal is partly allowed.
Levy of penalty under Section 271(1)(c) - Since we have restricted the addition to the extent of 8% of credit entries thereby granting substantial relief to the assessee in quantum assessment. It is a matter of fact that we have restricted the addition on ad hoc basis, therefore, the penalty levied on entire credit entry addition would not survive. Further, it is settled position of law that no penalty is leviable on the addition made on ad hoc basis, therefore, we direct the Assessing Officer to delete the entire addition.