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2019 (7) TMI 226 - AT - Income TaxAddition regarding Cash deposit in Bank Account - based on AIR Information - receipts of unaccounted sales as well as cash in hand - assessee contended that either profit rate of 8% should be adopted on the unaccounted sales or the peak credit should be considered - HELD THAT:- A perusal of the bank statement shows that only a part of the deposits and withdrawals have been shown in the regular accounts and the assessee has not disclosed the entire deposits and withdrawals. When there is no evidence with the Revenue that the withdrawals made by the assessee systematically from the bank account, which are not shown to the Revenue, have been utilized for some other purpose other than for the unaccounted business of the assessee, therefore, we find merit in the argument of the Ld. Counsel for the assessee that the assessee should be given the benefit of peak credit theory and only the peak credit has to be sustained. Since, the assessee has calculated such peak credit at ₹ 2,38,737/-, therefore, we set aside the order of the Ld. CIT(A) and direct the AO to sustain only the peak credit of ₹ 2,38,737/- subject to his verification. Deduction u/s 54F - on enquiry the Inspector reported that the plot is lying vacant and there is no construction work carried over the said plot - HELD THAT:- We find neither the assessee has constructed the house property during the year as claimed nor deposited the long term capital gain of above amount in the specified capital gain accounts scheme. Therefore, when the assessee has not fulfilled the conditions laid down in section 54F the argument of the Ld. Counsel for the assessee that the same can be taxed only in the AY 2015-16 i.e. after the expiry of 3 years is not acceptable as not being in accordance with law. Therefore, the order of the CIT(A) on this issue is upheld and the ground raised by the assessee are dismissed. Disallowance of depreciation - depreciation on machines sold - HELD THAT:- It is the submission of the Ld. Counsel for the assessee that only an amount of ₹ 15,383/- has been claimed as excess depreciation and not ₹ 44,721/- as held by the AO and upheld by the CIT(A) and, therefore, this matter may be set aside to the file of the AO. In view of the above submission by the Ld. Counsel for the assessee and after considering the argument of the Ld. DR, we deem it proper to restore this issue to the file of the AO with a direction to verify the records and restrict the depreciation to the actual amount of excess claim. Ad-hoc addition @ 1/5th out of certain expenses - probable personal use - HELD THAT:- In our opinion, the disallowance at 20% of the expenses on ad-hoc basis appears to be on the higher side. We, therefore, restrict the disallowance to 10% of the expenses i.e. ₹ 40,489/- as against ₹ 80,979/- upheld by the CIT(A). The ground raised by the assessee is partly allowed.
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