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2015 (7) TMI 937 - ITAT HYDERABAD

2015 (7) TMI 937 - ITAT HYDERABAD - TMI - Revision u/s 263 by CIT(A) - sources for the deposits found in the SB Account with Axis Bank have not been examined and enquired into, as in the absence of details for sources for deposits in the SB Account, the Assessing Officer ought to have added back the total deposits found in the bank account u/s. 69 instead of making peak addition u/s. 68 - Held that:- The cash summary prepared and furnished by the assessee also does not indicate the source of cas .....

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enquiring in to all the relevant aspects was erroneous as well as prejudicial to the interests of the Revenue, calling for revision under S.263.

The direction given by the learned Commissioner to the Assessing Officer in his impugned order is very specific to reassess the income for the year under consideration after carrying out necessary enquiries in his order. It is thus not a case where the learned Commissioner can be said to have kept the scope of the fresh assessment wide open, .....

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. The assessee in the present case is an individual who derives income from salary. The return of income for the year under consideration was filed by him on 30th July,2009 declaring total income of ₹ 2,30,850 . The case of the assessee was selected by the Assessing Officer for scrutiny in order to verify the source of cash deposits aggregating to ₹ 17,06,000 found to be made in the Savings Bank Account maintained by the assessee in Axis Bank, Although the assessee explained that suc .....

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issue in the assessment completed under S.143(3) vide order dated 12.12.2011. 3. The Record of assessment made by the Assessing Officer under S.143(3) was subsequently examined by the learned Commissioner and on such examination, he was of the view that the order passed by the Assessing Officer under S.143(3) suffered from the following errors which were prejudicial to the interests of the Revenue. AIR information reveals that assessee had a SB account with Axis Bank and deposited cash to the t .....

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f the I.T. Act, 1961. Accordingly, a notice under S.263 was issued by the learned Commissioner on 29.1.2014 pointing out the above error and requiring the assessee to show cause as to why the assessment completed by the Assessing Officer under S.143(3) should not be revised. In reply, submission was made on behalf of the assessee before the learned Commissioner challenging the exercise of his jurisdiction under S.263 by relying on the various case-laws. The learned Commissioner found the case-la .....

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pared and furnished before the Assessing Officer and after verification of the same, the peak credit was adopted by the Assessing Officer for the purposes of making the addition. It was contended that this aspect is therefore, was duly verified by the Assessing Officer and on such verification, the addition was made to the extent of peak credit. It was contended that there was thus no error in the order of the Assessing Officer as alleged by the learned Commissioner in the notice issued under S. .....

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tted in the return of income was ₹ 3,37,800/-. Therefore, the available sources for cash deposits in the bank account did not exceed the amount of ₹ 3,37,800/-. The Assessing Officer ought to have noticed that the assessee did not have any valid sources to deposit cash to the tune of ₹ 17,06,000/-. He has not called for the details of sources of cash deposits and has not made enquiries into the correctness of the claims. In the written submissions dated 18.3.2014, the assessee .....

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he monies were borrowed either in the assessment proceedings or in th present proceedings. As the Assessing Officer failed to call for the details of the sources and enquire into the same, the issue is remitted to the file of the Assessing Officer to call for the details and cause necessary enquiries and determine the unexplained deposits u/s/ 69 of the I.T. Act, 1961 based on the findings. For the reasons given above, the learned Commissioner held that the order passed by the Assessing Officer .....

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he copy of cash summary prepared and furnished by the assessee before the Assessing Officer, as placed at pages 20 to 27 of the paper-book and pointed out that the peak credit appearing as per the said summary on 23.2.2009 amounting to ₹ 5,90,884 was added by the Assessing Officer to the total income of the assessee. He contended that the peak credit theory is applied in such cases for the purpose of making addition and the same has been approved by various High Courts as well as the vario .....

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purposes of making addition. He contended that there was thus no error in the order of the Assessing Officer as alleged by the learned Commissioner calling for revision under S.263. He also contended that the learned CIT(A) while setting aside the order of the Assessing Officer vide his impugned order, has directed the Assessing Officer to reassess the assessee s income for the year under consideration, thereby leaving the entire assessment open to the Assessing Officer, which is not permissible .....

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ake addition by applying peak credit theory. He invited our attention to the copy of the cash summary prepared and furnished by the assessee before the Assessing Officer and submitted that the source of cash receipts/inflow shown therein was not explained at all even in the cash summary. He contended that peak credit theory itself was wrongly applied by the Assessing Officer in the case of the assessee, without making proper enquiry and therefore, the order of the Assessing Officer on this issue .....

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f the assessee s paper-book and perusal of the same shows that there were cash deposits of ₹ 17.06 lakhs in the said account on 27.8.2008 and 1.9.2008, without any corresponding cash withdrawals either prior to the date of deposit or even thereafter. As submitted by the learned counsel for the assessee before me, assessee was having another bank account with HDFC Bank and withdrawals made from the said account in cash as well as other receipts in cash were available with the assessee, and .....

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ount. The cash summary prepared and furnished by the assessee also does not indicate the source of cash receipts/inflow shown therein on various dates. In my opinion, the information and material furnished by the assessee before the Assessing Officer therefore, was not sufficient to apply peak credit theory for the purpose of making addition on account of cash deposits found to be made in the bank account of the assessee with Axis Bank, and as rightly concluded by the learned Commissioner, the o .....

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