9911796707
TMI Blog2015 (1) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... by AO by treating it as unexplained cash deposits. 3. Briefly the facts relating to the issue in dispute are, assessee is an individual. For the AY under dispute, assessee originally did not file any return of income. Subsequently, in response to a notice issued u/s 148 of the Act, assessee filed his return of income on 16/12/2009 declaring income of Rs. 86,230. In course of assessment proceeding, AO on verifying the bank account of assessee maintained with ING Vysya Bank, Gandhi Chowk Branch, Khammam bearing account No. 334010028519, noticed that assessee had made cash deposits aggregating to Rs. 2,67,35,000 during FY 2004-05. When AO called upon assessee to explain the source of cash deposits made in the bank account with supporting evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Rao not able to recall the details of individual buyers from whom the amounts were received. However, AO did not find any merit in the submissions of the assessee. AO observed that onus is on the assessee to prove the source of cash deposits in bank account. Since the assessee could not prove the source of cash deposit with supporting evidence, he treated the peak of deposit of Rs. 1,59,35,000 as unexplained income and added it to the income of assessee for the impugned AY. Being aggrieved of such addition, assessee preferred appeal before the CIT(A). 4. The appeal preferred by assessee was dismissed by CIT(A) exparte by sustaining the addition made by AO. However, the order passed by the CIT(A) was set aside by the ITAT with a direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction is about to be finalized, in about a day or so, he used to withdraw the same and give it to real estate players, and as per the AR, he used to get 1 % brokerage on the amount transacted. As seen from the bank account produced, the account was opened on 01.06.2004 with an amount of Rs. 5,000 and thereafter both credits and debits of cash appeared. Total volume of transactions amounted to Rs. 2,78,44,000. It is observed that on 04.08.2004, there was peak credit of Rs. 1,59,35,000, which was subjected to tax by the AO, which is remitted back to the undersigned to re-adjudicate it as directed by the Tribunal. Peak credit theory is adopted when the appellant is unable to explain the entries and when the same relates to him, where una ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red for such loss were not by the appellant, the probable income from gross 'receipts under brokerage has to be curbed out, based on the market trends, probable expenses needed for canvassing such business etc. In my considered opinion, having regard to facts, circumstances and the explanations offered by the AR, I am of the opinion that ends of justice are met if the brokerage income is taken at 25% on gross brokerage receipts, which works out to Rs. 69,610/- and the AO is directed accordingly." 5. The learned DR submitted before us that neither before the AO in course of the assessment proceeding nor before the CIT(A), assessee has produced a single evidence to substantiate its claim that the deposits into the bank account were out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances, assessee's explanation that cash deposits were made out of the amounts received from buyers of real estate was rightly accepted by the learned CIT(A). 7. We have considered the submissions of the parties and perused the orders of the revenue authorities as well as other materials on record. Undisputedly, huge amount of cash aggregating to Rs. 2,67,35,000 was found to have been deposited in assessee's bank account. It is also a fact on record during the assessment proceeding apart from claiming that the amounts were received from the buyers of real estate to be given to the sellers of real estate which was temporarily parked in the bank account, assessee has not produced any other supporting evidence. In these circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces, in our view, CIT(A) was not justified in accepting assessee's explanation with regard to cash deposits made in the bank account in absence of any supporting evidence by putting the onus on AO. In course of hearing, learned AR contended that had it been the income of the assessee then it would have been invested by him in some other form as the closing balance in the bank account as on 21/03/05 was nil. As the AO has not found any other investments in the name of the assessee it is to be accepted that the deposits in the bank account are not of assessee. However, we do not find much force in such contention. When cash deposits are found in the bank account of the assessee, onus is on the assessee to prove the source of such deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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