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Income Tax - Case Laws
Showing 1 to 20 of 831 Records
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2015 (12) TMI 1909
Long term capital gain earned on sale of shares - Addition based on cash component in the sale of shares - Documents found during the survey relied upon - HELD THAT:- The contents in the documents found during the survey do not support the case of the AO as pointed out by the CIT(A). If the factual finding of the Ld.CIT (A) has to be dislodged then, the D.R. has to lead evidence to that effect.
Documents have to be produced to demonstrate that the order of the CIT (A) is perverse. No revised return of income was produced before us despite adequate opportunity being given to revenue. When the CIT (A) records that the contents of the documents do not tally with the case made out by the AO as the cheques and amounts mentioned therein are not tallying with the actual transaction, then no addition can be made based on these documents.
Coming to the legal position on the evidentiary value of statements recorded during the survey, the Hon’ble Courts have held that these statements have no evidentiary value. Even otherwise the purchasers have filed affidavits which stand uncontroverted till date. The assessee produced all evidences in support of their claim. The A.O. could not dislodge their claim with evidence. In our opinion the A.O. could not prove that there was cash payment for the purchase of the shares.
When an allegation is made by the Revenue that the assessee has earned certain income, the burden is on the Revenue to prove the same. In the case on hand the facts and evidences demonstrate that the Revenue has not discharged this burden of proof that lay on it. Thus we have no other alternative but to uphold the factual finding as well as the order of the First Appellate Authority and dismiss this appeal of the Revenue.
Reassessment order passed by non jurisdictional officer - ITO, ward 34(4) furnished a copy of the reasons recorded to the assessee on 7.9.2007. ACIT, Circle 34(1), New Delhi has admittedly not recorded that he had reasons to believe that income chargeable to tax of the assessee has escaped assessment. He continued reassessment proceedings initiated by the ITO, Ward 34(4) of the Act without independently recording reasons for reeopening or issuing a fresh notice u/s 148 of the Act. There is no order u/s 127 of the Act transferring the jurisdiction of the ccase from ITO, Ward 34(4) to ACIT, Ward 34(1). Thus this order of reassessment passed by the ACIT u/s 34(1) of the Act is without jurisdiction and hence is bad in law.
Non-issual of notice u/s 143(2) within the statutory period - AO records that the assessee in its letter dt. 10.9.2008 stated that the return of income filed by him earlier on 31.10.2006 should be treated as the return filed in response to a notice u/s 148 of the Act. Thus the date of receipt of this letter is the date of filing of the return of income in response to the notice issued u/s 148 of the Act. In such circumstances the notice u/s 143(2) of the Act should have been issued on or before 30.9.2009. However, in this case notice u/s 143(2) of the Act was issued only on 4.12.2009. Thus applying the propositions laid down in the case of Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT ] assessment has to be held as bad in law. Decided in favour of assessee.
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2015 (12) TMI 1908
Revision u/s 263 - reliance on audit objections - HELD THAT:- As the order of the CIT-II Chandigarh u/s 263 has been set aside and quashed by the ITAT Chandigarh Bench [2015 (10) TMI 2588 - ITAT CHANDIGARH] and original assessment order has been restored. He has, therefore, submitted that present proceedings have thus, become infructuous.
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2015 (12) TMI 1907
MAT computation - Whether the Tribunal was correct in upholding the case of the assessee that deferred revenue expenditure debited to the P & L account could be modified and claimed during the current assessment year when computing book profits u/s 115JA - As decided by HC [2015 (1) TMI 1023 - KARNATAKA HIGH COURT] upholding the Tribunal's decision that the assessee is entitled to claim the entire expenditure as revenue expenditure for the purposes of Section 115JA. The court emphasized that the profit and loss account prepared in accordance with the Companies Act should be the basis for computing book profits, and deferred revenue expenditure is not recognized under the Act.
HELD THAT:- Delay condoned. We see no reason to interfere with the order impugned. The special leave petition is accordingly dismissed.
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2015 (12) TMI 1906
Nature of expenditure on debentures issued - HELD THAT:- It is now seen that by an order [2013 (9) TMI 1057 - DELHI HIGH COURT]. The question framed in the present appeals is similar to question No. (iii) in the said appeal and that has been decided in favour of the Assessee and against the Revenue.
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2015 (12) TMI 1905
Validity of reopening of assessment - reasons to believe - documents is the proforma of the reasons for the reopening which is somewhat different from the proforma in which the reasons were furnished to the Assessee with the ITO's - HELD THAT:- “Reasons for the belief that income has escaped assessment” for AY 2004-05 signed by the ITO. At the bottom of the said page there is an endorsement made to the “Addl. CIT, Range-6, New Delhi,” which then has been signed alongside by the Addl. CIT with the date of 21st March 2011. Assessee insists that this was the document that was given to him and which was also seen by the ITAT when it passed the impugned order in the present matter.
Revenue, on the other hand produced before the Court a file purportedly containing the relevant original documents. One of the documents is the proforma of the reasons for the reopening which is somewhat different from the proforma in which the reasons were furnished to the Assessee with the ITO's letter dated 27th June 2011 referred to hereinbefore.
This proforma (in the file) contains an endorsement of the Additional CIT who appears to have put his signature below the following hand written words: “I am satisfied”. However, these words are missing in the copy of the reasons furnished to the Assessee with the ITO's letter dated 27th June 2011. ITAT does not appear to have been shown the original document in the file which purportedly has the above words.
The Court then required Mr. Sawhney to show from the file the original of the Annexure to the letter dated 27th June 2011 of the ITO as addressed to the Principal Officer of the Assessee. At his request, adjourned 17th December 2015.
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2015 (12) TMI 1904
Treatment of loss arisen on account of foreign exchange derivative contracts - assessee suffered a loss on account of foreign exchange forward contract transactions and treated the same as part of business loss and set off such loss against the business income of the assessee - AO was of the opinion that this is a speculative loss and cannot be set off against business income of the assessee in view of the provisions of sec. 73 - as per CIT(A) loss arising from these forward contracts is not a speculative loss u/s 43(5) and he directed the Assessing Officer to treat the above loss as regular business loss
HELD THAT:- AO has to consider the foreign exchange derivative in proportion to export turnover as regular business transaction of the assessee. If the derivative transaction undertaken by the assessee is in excess of export turnover then that loss suffered in respect of that portion of excess transaction has to be considered as speculative loss only and that excess derivative transaction has no proximity with export turnover and the AO is directed to compute accordingly.
AO has to see whether there is any premature cancellation of forward contract of foreign exchange and that transaction should be taken out for the purpose of considering the business loss and only the transctions which are completed to be considered for the purpose of determining the business loss from these foreign exchange forward contract. With this observation, we remand this issue to the file of the AO for fresh consideration.
This issue was considered by the Mumbai Tribunal while delivering the decision in the case of Araska Diamond P. Ltd, [2014 (10) TMI 776 - ITAT MUMBAI] and after following the judgments of Bengal & Assam Co. Ltd [2009 (7) TMI 108 - CALCUTTA HIGH COURT] and Badridas Gauridu P. Ltd [2003 (1) TMI 61 - BOMBAY HIGH COURT] the Tribunal came to the conclusion that the transactions, which were prematurely cancelled, cannot be considered as business transaction and it is to be considered as speculative transaction. Appeal of the Revenue is allowed for statistical purposes.
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2015 (12) TMI 1902
Validity of Revision u/s 263 - CIT found that the AO has allowed the deduction u/s.80IB(10) without proper verification and without making necessary enquiries - assessee submitted that learned CIT has totally erred in holding that the AO has not made necessary enquiries and examination while allowing the assessee's claim of deduction u/s. 80IB(10) - HELD THAT:- Upon careful consideration as regards the merits of assessee's claim u/s.80IB is concerned, we find that in our order of even date in the case of the assessee for the assessment years 2003-04 to 2008-09 which includes the present assessment year, we have upheld the order of learned CIT(Appeals). In the said order CIT(Appeals) held that the assessee fulfils all the conditions laid down u/s. 80IB(10) of the I.T. Act.
AO has made the necessary enquiry by issuing questionnaire to the assessee and obtaining the details as he desired necessary. Now the learned CIT was of the opinion that the details obtained by the assessee were not sufficient. In our considered opinion this approach of the learned CIT in invoking the jurisdiction u/s. 263 of the I.T. Act is not sustainable.
AO has made the enquiry which he deemed fit. Now the learned CIT is directing to make further enquiry. This, in our considered opinion, is not the mandate of section 263 - CIT has also drawn adverse inference on the issue that capital introduced by the partners were not looked into by the AO in the assessment stage. We find that this alone cannot be a ground for invoking jurisdiction u/s. 263.
CIT has noted that the assessee has submitted necessary details before him. Learned CIT has not found any thing adverse in these details. Moreover there are case laws for the proposition that capital introduced by the partners has to be examined in the hands of partners in their individual account. Hence the AO having adopted one of the possible views, it cannot be said that the learned CIT was justified in invoking jurisdiction u/s. 263 of the I.T. Act.
Hon'ble Apex Court in the case of Max India Ltd [2007 (11) TMI 12 - SUPREME COURT] as expounded that where two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as erroneous order prejudicial to the interest of the Revenue unless the view taken by the ITO is unsustainable in law.
Thus we hold that learned CIT was not justified in invoking jurisdiction u/s. 263 of the I.T. Act. Accordingly we quash the order passed by learned CIT u/s. 263 of the I.T. Act. Assessee appeal allowed.
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2015 (12) TMI 1901
Exemption u/s 10(23C)(vi) - claim rejected as society was diverting its income to the members of the society and, therefore, the society was not acting as a non-profitable institution - Commissioner rejected the application holding that the purpose/objects of the society as per the memorandum of association does not indicate that the institution is running solely for educational purpose
HELD THAT:- As perusal of the impugned order that based on a survey, a show cause notice was given and, thereafter, a finding has been given that the profits of the institution are being diverted to the members of the society in the garb of payment of interest on the unsecured loans given by them. The genuineness of this transaction has been doubted. A specific finding has been given that at the time when the members gave the loan, no rate of interest was payable by the institution but subsequently, for the subsequent assessment years, the rate of interest of 12% was charged to obviate the profit by way of interest and divert the money to its members in the garb of payment of interest on the loan given.
For the assessment year 2005-06, the rate of interest was increased from 12% to 18% and in 2006-07 the rate of interest was increased to 21%. This increase in rate of interest was to ensure that the income of the society was diverted to its members in the garb of payment of interest. The increase in the rate of interest could be seen on account of the increase in the income of the society. There is also a specific finding that the bye-laws had no provision for taking loan on interest, though, subsequently, the amendment was made in its bye-laws during the financial year 2006-07, which will have no effect in so far as the present application of the petitioner is concerned.
Thus an irresistible inference can be drawn that the petitioner's society, even if it was running an educational institution solely for education purposes, yet it was with the intention of earning a profit and it was not for a non-profit purpose. On this short ground, we are of the opinion that the order of the Commissioner does not require any interference. Decided against petitioner/society registered.
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2015 (12) TMI 1897
Levy of penalty u/s 271(1)(c) - changing the heads of income due to difference of opinion - as per AO assessee has treated the Guest house as his business asset and accordingly, he was claiming depreciation thereon - assessee explained that the mistake has occurred due to wrong understanding of the accountant - CIT(A), deleted the penalty by holding that there was difference of opinion about the nature of Capital gain, i.e., whether it was long term capital gain or short term capital gain and it appears that the assessee was under bona fide belief that it was a long term asset as he was owning the property over a period of three year
HELD THAT:- The admitted facts are that the “Guest house” sold by the assessee is a business asset on which depreciation has been allowed. Hence, there is no dispute that the gain arising on sale of the same would be assessable as “Short term capital gain” as per the provisions of sec. 50 of the Act. However, the assessee has treated the same as non-business asset at the time of filing return of income and accordingly computed the long term capital gain.
The total income of an assessee for a particular assessment year is computed in accordance with the provisions of the Act by having regard to the accounts of the assessee. Hence, it is imperative on the part of the assessee to compute the total income in accordance with the provisions of the Act. In case of assessee, on which depreciation has been allowed, the provisions of sec. 50 mandate that the gain should be computed as “Short term capital gain” only.
The assessee has tried to defend his action by drawing support from the decisions rendered in the case of ACE Builders Pvt Ltd [2005 (3) TMI 36 - BOMBAY HIGH COURT] and Smita Conductors Ltd.[2013 (9) TMI 1056 - ITAT MUMBAI] In our view both the decisions cannot come to the support of the assessee, since they have been rendered in a different context.
It is not a case where the assessee has made a claim on some plausible basis, but the same became unacceptable in the eyes of law. It is also not simple case of changing the heads of income due to difference of opinion. On the contrary, the assessee himself has accepted that the gains arising on sale of guest house is assessable as Short term Capital gain. Hence, in our view, the facts of the case show that the assessee furnished inaccurate particulars of income and the explanations furnished by the assessee in that regard were not substantiated.
We are not able to agree with the view taken by the CIT(A). We notice that the assessing officer has levied penalty @ 200% of the tax sought to be evaded. In our view, the same appears to be on the higher side. Accordingly, we set aside the order of CIT(A) and direct the AO to sustain the penalty to the extent of 100% of the tax sought to be evaded. Decided in favour of revenue.
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2015 (12) TMI 1896
Levy of interest u/s 234(A) - Tribunal decided the issues in favour of the assessee which relates to levy of interest under Section 234(A) as the same has also been considered in earlier assessment years - Being aggrieved thereof, the instant appeal has been preferred.
HELD THAT:- We have gone through the orders passed by the authorities below as well as the ITAT and we are of the opinion that no substantial question of law arises out of the judgment rendered by the Income Tax Appellate Tribunal.
Thus, the appeal is hereby failed and dismissed accordingly.
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2015 (12) TMI 1894
PE in India - Scope of Article 5(2)(k) of DTAA between India and the UK - HELD THAT:- As in latest order passed by the Tribunal in [2015 (9) TMI 1532 - ITAT MUMBAI] in which identical issue has been decided while we agree with the learned counsel that art. 15 will not be applicable on the facts of the present case, this finding does not really come to the rescue of the assessee since, as we have already held, the assessee did have a PE in India under art. 5(2)(k) of the India-UK tax treaty, and, accordingly, profits attributable to the PE are taxable under art. 7 of the India-UK tax treaty. Decided against assessee.
Reimbursement of the expenses as part of the income of the assessee - As decided in assessee own case [2015 (9) TMI 1532 - ITAT MUMBAI] as held reimbursements received by the assessee are in respect of specific and actual expenses incurred by the assessee and do not involve any markup, there is reasonable control mechanism in place to ensure that these claims are not inflated, and the assessee has furnished sufficient evidence to demonstrate the incurring of expenses. There is thus no good reason to make any addition to income in respect of these reimbursements of expenses - Decided in favour of assessee.
Interest charged u/s 234B is to be deleted.
Income relatable to work performed in India in liable for taxation in India - HELD THAT:- We find that in assessee’s own case for A.Y.1998-99 to 2001-02 [2015 (9) TMI 1532 - ITAT MUMBAI], the Tribunal has held that the profit which is attributable to the PE, can only be assessed in India.
Respectfully following the aforesaid order and order of the Hon’ble Special Bench in the case of Clifford Chance [2013 (6) TMI 544 - ITAT MUMBAI] It is held that the only income in respect of services rendered in India, which are attributable to PE only, would be taxable in India. Thus, ground no. raised by the Revenue stands dismissed.
Allow 85% of disbursement claim proportionate to the fee related to the services rendered in India as compared to total fees - We direct the AO to follow the aforesaid order of the Tribunal [2015 (9) TMI 1532 - ITAT MUMBAI] and hold that no amount should be disallowed.
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2015 (12) TMI 1891
TDS u/s 194A - interest on deposits held by the Branch - assessee in default for not deducting tax at source on alleged deposits which were funds of the Central Government - CIT(A) has held that societies which are being wholly funded by Government would qualify for non deduction of tax u/s 194A in accordance with notification No. 3489 dated 22.10.1970 - HELD THAT:- As per the PMGSY [a scheme of the Ministry of Rural Development], any interest income accrued on surplus funds of the project parked in the bank would be of Ministry of Road Developments and State Rural Road Development Agency would not have any right over the interest income. Chapter X of the Accounting Manual of PMGSY Scheme is explicit in this regard and the AO erred in relying on Chapter XIII of the said Manual.
Chapter X of the Accounting Manual is specific with regard to the nature and state of interest income, stating the interest income as belonging to the Ministry of Rural Development. The State Rural Road Agency does not have any control whatsoever on the interest income. That being so, the contents of Chapter XIII of the Accounting Manual, as rightly held by the ld. CIT(A), cannot over ride those of Chapter X of the Manual.
J&K State Rural Road Agency is a body established by the Government of J & K, registered under the Societies Registration Act and is fully funded by the Government and it is not required to make TDS.
Then, in BRANCH MANAGER, STATE BANK OF BIKANER & JAIPUR [2012 (4) TMI 210 - ITAT JAIPUR] as held that for interest on such like deposits, TDS provisions of section 194A of the Act are not attracted. This decision was also taken note of by the ld. CIT(A) while deleting the demand raised. Also, no contrary decision has been pressed into service before us on behalf of the department. Decided in favour of assessee.
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2015 (12) TMI 1890
Additional disallowance of depreciation enhanced by CIT(A) - “assets” have already entered into the ‘block of assets’ - HELD THAT:- As “assets” in question were forming part of ‘block of assets’ which were used earlier for the purpose of business. The said asset were destroyed / lost in theft in the assessment year 2006-07 and no insurance claim has been received to the assessee. To the extent of the amount of claim made to the insurance company was reduced from the block of assets in the earlier years and accordingly, assessee has claimed depreciation on the reduced written down value.
Since the assessee could not receive the insurance claim, the amount of insurance claim was added back and accordingly, depreciation was claimed on this amount.
CIT(A) has enhanced the disallowance of depreciation on the ground that the said asset has not been put to use for the business purpose. Such a reasoning given by the CIT(A) for the enhancement cannot be sustained, because now it is quite a settled proposition that if the “assets” have already entered into the ‘block of assets’ and is forming part of the gross block of assets, then deprecation has to be allowed even if the said assets has not been used in the relevant year.
This proposition now stands settled by the catena of decisions including that of case of CIT vs G.R. Shipping Ltd [2009 (7) TMI 1169 - BOMBAY HIGH COURT] Otherwise also, if the assessee’s claim for insurance has not been settled and amount has been added back, then the depreciation has to be allowed on such an amount. Accordingly, we direct the AO to grant deprecation in the previous year relevant to AY 2006-07, that is, when it was added back to the block of assets and secondly, rework the deprecation for the assessment year under appeal accordingly. Appeal of the assessee is allowed.
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2015 (12) TMI 1889
Nature of expenses - Corporate debt restructuring - replacement of remembraning cells - AO treated both these claims capital expenditure - HELD THAT:- Revenue’s argument seeking to treat assessee’s CDR claim as capital expenditure is rejected. We rely on co-ordinate bench decision in assessment year 2004-05 [2013 (11) TMI 773 - ITAT AHMEDABAD] and leave it for the AO to calculate this corporate restructuring expenditure as adopted in assessment year 2004-05.
Expenditure on replacement of remembraning cells - As assessee has already succeeded before the hon’ble jurisdictional high court in its own case [2015 (2) TMI 118 - GUJARAT HIGH COURT] rejecting the very substantial question framed in assessment year 1999-2000. There is no exception pointed out before us. We respectfully follow the same and uphold the lower appellate findings under challenge. Revenue’s appeal partly accepted for statistical purposes.
TDS u/s 192 - Default u/s 201(1) and (1A) - medical reimbursement - non deduction of tds - HELD THAT:- The assessee has acted fairly and honestly in computing its TDS liability qua salary and other allowances paid to its employees u/s. 192 - Nor it is the Revenue’s case that it has not acted in the above stated bonafide manner or that quantum of medical allowance question appears to be payment of salary in garb thereof. The case file does not reveal that these very sums stand assessed in individual employees’ hands.
Revenue fails in controverting all of the above stated findings. We accordingly reverse lower authorities’ action and accept assessee’s first substantive ground challenging section 201(1) and (1A) demand in question. This first substantive ground relating to medical reimbursement issue succeeds.
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2015 (12) TMI 1888
Penalty proceedings u/s 271(1)(c) - revised return showing higher income was filed on the basis of which notice for reopening was issued - undisclosed agricultural income - assessee in his statement recorded u/s 131 on oath by the ADIT (Investigation), Nashik had confessed that the agricultural income shown by him during the assessment year 2005-06 from sale of agricultural produce did not match with the agricultural crops shown in the 7/12 extracts - HELD THAT:- Assessee had no plausible explanation towards the source of Rs.3,00,000/- which he had introduced in his business as agricultural income. Although the assessee has filed the revised return by disclosing the additional income of Rs.3,00,000/- the same cannot be said to be voluntary because the return was filed only after the enquiries were conducted by the Department and the assessee was unable to substantiate the source of the same for which he declared the additional income.
As per the provisions of section 271(1)(c) of the Act, penalty is leviable if the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. In the instant case, the assessee by declaring business income as agricultural income in the return of income has concealed the particulars of his income and furnished inaccurate particulars of such income.
Provisions of section 271(1)(c) are clearly attracted. Various decisions relied upon by the assessee before the CIT(A) are distinguishable and are not applicable to the facts of the present case. Grounds raised by the assessee are dismissed.
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2015 (12) TMI 1886
Maintainability of appeal before Tribunal - low tax effect - HELD THAT:- In view of the latest CBDT Circular No.21/2015 dated 10th December, 2015, the appeals of the Department are not maintainable inview of the tax effect being less than the monetary limit prescribed by the said Circular. The tax effect in filing the appeal before the Tribunal should be above Rs.10 lakhs in view of the above said Circular. The above Circular has clearly mentioned to have retrospective effect and is to have application to the pending appeals. Accordingly, in view of the said Circular, all the appeals of the Revenue are dismissed as not maintainable.
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2015 (12) TMI 1883
Exemption u/s 11 - benefit of certificate u/s 12(A) - conditions stipulated under the provisions of sub-section (3) of section 12AA which empowers the authority to cancel the registration - HELD THAT:- As appellants has fairly stated that the questions of law raised in this appeal are covered by the decision of this Court in the case of ‘The Director of Income Tax Exemption Vs. M/s. Karnataka Badminton Assn. [2015 (1) TMI 1202 - KARNATAKA HIGH COURT] wherein the questions have been answered in favour of the Assessee and against the Revenue.
Accordingly, for the reasons given in the aforesaid Judgment in Karnataka Badminton Assn.’s case [supra], this appeal is dismissed and the questions of law raised are answered in favour of the Assessee and against the Revenue.
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2015 (12) TMI 1882
Validity of proceedings u/s 153A - as argued the premises which were searched u/s 132 were not of the Assessee - HELD THAT:- ITAT has noted as a matter of fact that the premises that was searched i.e. 3rd Floor, Global Arcade, M. G. Road, Gurgaon was not of the Assessee. There was nothing on record to connect the Assessee with the premises searched. Therefore, qua the Assessee, the proceedings u/s 153A was invalid. This being a factual aspect, no question of law arises.
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2015 (12) TMI 1881
Issues:
- Applicability of Circular No.21 of 2015 issued by the Central Board for Direct Tax
- Tax effect threshold for filing appeals in Income Tax matters
Analysis:
The judgment by the High Court of Bombay pertains to the Assessment Year 1989-90 and revolves around the interpretation and application of Circular No.21 of 2015 issued by the Central Board for Direct Tax. The circular sets monetary limits for filing appeals in Income Tax matters before different authorities. Specifically, the circular states that appeals should not be filed solely based on exceeding the monetary limits, and the decision to file an appeal in such cases should be based on the merits of the case. The circular also clarifies that it will apply retrospectively to pending appeals and those to be filed in the future before High Courts and Tribunals. Appeals below the specified tax limits may be withdrawn or not pressed, as per the circular's instructions.
In the present case before the High Court, the tax effect is noted to be Rs. 5.07 lakhs, falling below the monetary limit specified for appeals before the High Court. Consequently, the learned Counsel representing the Revenue, Mr. Suresh Kumar, decided not to press the appeal based on the tax effect being below the prescribed limit. As a result, the High Court dismissed the appeal as not pressed and ordered the refund of court fees in accordance with the rules. This judgment highlights the importance of adhering to the monetary limits set by the Circular for filing appeals in Income Tax matters and emphasizes the need to consider the case's merits before initiating legal proceedings.
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2015 (12) TMI 1879
Unexplained investment in undisclosed bank account - CIT-A applying the concept of peak theory and requirement of additional capital - HELD THAT:- We find that the assessee opened a bank account in ICICI Bank and deposited cash on various dates and also made withdrawals. The total deposits during the year and the same was treated by the A.O. as unexplained credit while framing the assessment.
We also note that the said account was not disclosed by the assessee in his balance sheet whereas all the withdrawals were made under his signatures. CIT(A) applied the theory of net peak balance and sustained the addition of peak balance of Rs.50,435/- and also sustained Rs.25,000/- as additional capital requirement as unexplained investments and treated the same as income of the assessee. No infirmity in the order of CIT(A) as he had rightly applied the theory of peak balance i.e. Rs.50,435/- and took additional capital at Rs.25,000/-. Appeal of Revenue is dismissed.
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