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2015 (5) TMI 747 - AT - Income TaxAddition to cash deposits in various bank accounts - peak credit addition - Held that:- Considering the findings given in the CIT(A)’s order including that of AO’s comment in the remand report, it is seen that assessee has been unable to explain the source of cash deposits vis-a-vis any corroborative evidence. Whatever material has been placed on record though establishes that assessee was in some kind of money transfer business, however, the onus is upon the assessee to correlate the cash deposits with some evidence or the same has been recorded in regular books of account. It is also an undisputed fact that three of the assessee’s bank accounts was not disclosed, either in the balance sheet or in the books of account. In such a case ones lies heavily upon the assessee to prove the source of the cash deposits in the bank account. Since there was a regular cash deposits and regular withdrawals from same nature of transaction, then positive peak credit has to be worked out for the purpose of addition which has rightly done by the Ld. CIT(A). Accordingly, the Ld. CIT(A)’s conclusion that peak credit should be added is affirmed. However, it is noted that while arriving at the peak credit of all the bank accounts, it is seen that firstly, the Ld. CIT(A) has not given credit of opening balance as on 1st of April 2005 and secondly, he has also included the cash deposits made SBI bank account of Lalganj Azamgarh which belongs to his brother. If the said bank account belongs to his brother then no addition on account of unexplained credit can be made in the hands of the assessee. Though the said bank account may be relevant to work out the assessee’s commission income but definitely cannot be taken as undisclosed bank account of the assessee as it belongs to assessee’s brother who is separate and distinct from the assessee. Thus, we direct the AO to work out the peak credit only from three undisclosed bank account of the assessee, after excluding the opening balance and the entry in bank account belonging to his brother for the purpose of addition on account of unexplained deposits in the bank account.Once the addition on account of peak credit is being made, then no separate addition on account or commission income should be made separately as made by CIT(A) because the unexplained peak credit itself takes care of income element and secondly, if commission income is to be added then it leads to an inference that all the credits and deposits are accepted and only the income qua the transaction is to be taken as an income. Thus addition on account of commission income should be deleted. - Decided partly in favour of assessee.
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