Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Income-tax Officer, Ward 3 (4) , Surat Versus Shri Rajpal Singh Shekhawat

2015 (7) TMI 324 - ITAT AHMEDABAD

Unexplained deposit in bank account - CIT(A) after applying the peak credit theory on the bank account restricted part addition - Held that:- On an analysis of the account ld. first appellate authority had arrived at a conclusion that the account was used for the purpose of some business, because there are debit and credit entries in a systematic manner. The debit of equal or more or less of the same amount of the cash deposit in the bank account at regular interval is available. The total of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

actions. He has added the profit earned by the assessee in the business after working out the peak credit. In other words the maximum amount of the peak deposits is ₹ 3,82,688/-. This was considered as representing the investment in this activity which has been carried out with these two bank and thereafter worked out the profit element. He made an addition of ₹ 9,41,557/- which is total of Rs, 5,58,872/- + ₹ 3,82,685/- i.e. profit on the turnover + alleged initial investment i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of assessee because he is unable to support his claim with any authentic books of account. It is not discernible whether these net profits have been accepted in the scrutiny assessment or not. Considering the facts and circumstances of the case we do not find any reason to interfere in the order of CIT(A) - Decided against revenue and assessee.

Disallowance of telephone and mobile expenditure,vehicle expenses, depreciation and petrol expenses - Held that:- assessee has failed to subm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rightly disallowed the expenditure on an estimate basis - Decided against assessee. - ITA No. 1399/Ahd/2011,CO No.142/Ahd/2011 - Dated:- 24-6-2015 - S/Shri N. S. Saini & Rajpal Yadav, JJ. For the Petitioner : Shri Nimesh Yadav, Sr.DR For the Respondent : Shri Rasesh Shah, AR ORDER PER Shri Rajpal Yadav, Judicial Member. The Revenue is in appeal before us against the order of ld. CIT(A) dated 21st February, 2011 passed for AY 2007-08. On receipt of notice in the Revenue s appeal, assessee has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d with deletion of addition whereas assessee is aggrieved with confirmation of addition at ₹ 9,41,557/-. 3. The brief facts of the case are that assessee has filed his return of income on 31.10.2007 declaring total income at ₹ 2,85,966/-. The case of the assessee was selected for scrutiny assessment and a notice under section 143(2) dated 4th August, 2008 was issued and served upon the assessee. The assessee was running a textile trading business, in the accounting years relevant to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n these two accounts during the accounting period relevant to this AY. On an analysis of the account the ld. AO found that a sum of ₹ 61,79,940/- was deposited by the assessee in cash on various dates. He directed the assessee to explain the source of deposits. The assessee contended that he was running a textile trading business during the accounting years relevant to AYs 2003-04 & 2004-05. The said business was discontinued and all the debtors and creditors of that business were tran .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

these bank accounts and made addition of ₹ 68,51,309/- under section 68 of the Income-tax Act, 1961 (hereafter the Act). 4. Dissatisfied with the action of the AO, assessee carried the matter before the CIT(A). He contended that after collecting the complete evidence from the bank including the details of cheque numbers it was gathered by him that he had received cheques from his clients in the business of providing the security. These cheques were discounted by him from the financier and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that these bank accounts were used by the assessee for making payments as well as depositing cheques and cash. According the ld. CIT(A) the unexplained amount and the profits thereon could be worked out by applying peak credit theory. Finding of the ld. CIT(A) in this connection reads as under :- 5.2 Upon consideration of all the facts discussed above, I find that it is not disputed by the appellant that the cash deposits in the two bank accounts are unaccounted, that is not appearing in his bo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n cash against cheques discounted by them. The assessing officer has rejected the alternate submission of the appellant to adopt peak of the cash deposits in the two bank accounts to arrive at the income not accounted in his books of accounts on the ground that the withdrawals made from the two bank accounts show that the cheques have been issued to different parties. The assessing officer has however, while rejecting the above alternate submission of the appellant, has not explained as to how w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eposits in the above two bank accounts and the gross profit declared in the return of income on the cash deposits appearing in the two accounts subsequent to the date of peak credit. The position of the same, as verified during the course of appellate proceedings, is as follows:- (i) CA A/c No.25397 -peak credit of cash deposits (14.07.2006) ₹ 2,78,934/-, (ii) Savings A/C No.29271 -peak credit of cash deposits (27.1.2007) ₹ 1,03,751/-. Total of peak credit of cash deposits - ₹ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ade on account of unexplained cash deposits in the two bank accounts to the extent of ₹ 9,41,557/-. The first ground of appeal is, accordingly, partly allowed. 5. Before us, the Revenue has contended that the theory of peak credit is not applicable in this case because the same amount of withdrawal has not been deposited again and again. A perusal of the bank statement would show that several deposits have been made in cash on different dates but the withdrawals have been made through cheq .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

credit entries was found. The CIT(A) applied peak credit theory. The view of the CIT(A) has been upheld by the Tribunal. The Hon ble High Court has also dismissed the appeal of Revenue. The ld. counsel for the assessee further placed on record copies of bank statement for the period from 1.4.2006 to 31st March, 2007. Referring to the Savings Bank account, he pointed out that for example a sum of ₹ 1,00,000/- was withdrawn vide cheque no.622040 on 6th March, 2007, further sum of ₹ 1,0 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ntinued business in textile trading. The ld. CIT(A) has also rejected the contention that assessee has discounted the cheques from the financiers received in respect of his business of providing security services. However on an analysis of the account ld. first appellate authority had arrived at a conclusion that the account was used for the purpose of some business, because there are debit and credit entries in a systematic manner. The debit of equal or more or less of the same amount of the ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2007 in savings account. The CIT(A) has worked out the GP element in these transactions. He has added the profit earned by the assessee in the business after working out the peak credit. In other words the maximum amount of the peak deposits is ₹ 3,82,688/-. This was considered as representing the investment in this activity which has been carried out with these two bank and thereafter worked out the profit element. He made an addition of ₹ 9,41,557/- which is total of Rs, 5,58,872/- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version