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I.T.O, Ward 39 (3) , Kolkata Versus Shri Rajesh Kumar Goel

2016 (1) TMI 120 - ITAT KOLKATA

Undisclosed bank account of the assessee - CIT(A) allowed partial relief - Held that:- Theory of peak credit held making the additions of aggregate deposits in the bank account without giving the benefit of withdrawals made by the assessee from time to time is not justified. The Ld.CITA has rightly treated the peak balance as an unexplained investment made by the assessee in the nature of credits in the said bank account and , therefore, only that addition is only called for. The order of the Le .....

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er of assessment framed by the Learned AO u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. Shri.Amitabh Bhattacharjee, JCIT, the Learned DR argued on behalf of the revenue and Shri. A.K.Tulsian, FCA, the Learned AR argued on behalf of the assessee. 3. The issue to be decided in this appeal is whether in the facts and circumstances of the case the Learned CITA is justified in granting relief of ₹ 45,57,218/- out of the total credits in the undisclosed bank ac .....

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confronted with the said bank account by the Learned AO , explained that the said bank account was opened in the name of the assessee by M/s Hindusthan Cargo Carriers, a partnership firm, wherein his wife, father and brother were partners. The assessee also adduced reasons for the said firm opening the bank account in his name by explaining that there was a fraud committed in one of the branch office by the staff of ABN Amro Bank , wherein certain fraudulent withdrawals were made from Hindusthan .....

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Bank account represent business transactions of the said partnership firm carried out by the firm in his name for safety purposes as explained supra. The Learned AO proceeded to bring to tax the entire credits appearing in the said bank account to the tune of ₹ 48,32,616/- as unexplained cash credit on the ground that the said firm M/s Hindusthan Cargo Carriers had not considered the said bank account in their returns of income. On first appeal, the Learned CITA accepted the entire conten .....

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but however, the Learned CITA proceeded to adopt the peak credit addition and gave direction to the Learned AO to add the peak credit in the said bank account to the tune of ₹ 2,75,398/- and granted relief of ₹ 45,57,218/-. Aggrieved, the revenue is in appeal before us on the following ground:- The ld. CIT(A) has erred in law as well as in fact in allowing relief to ₹ 45,57,218/- out of total addition of ₹ 48,32,616/- made on account of deposit made into undisclosed bank .....

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of the Learned CITA and vehemently opposed to the factually incorrect arguments of the Learned DR with regard to the fact that the contents of ABN Amro Bank account were not reflected in the accounts of the firm M/s Hindusthan Cargo Carriers. He argued that the detailed paper book containing pages 1 to 159 were duly filed by the assessee before the Learned CITA containing the entire details of M/s Hindusthan Cargo Carriers in the form of their bank statements, return acknowledgements, audited f .....

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d even though without prejudice to the main contention, no addition could be made towards the bank account of Hindusthan Cargo Carriers in the hands of the assessee. 6. We have heard the rival submissions and perused the materials available on record. We find that the contentions of the Learned DR are factually incorrect from the facts recorded in the Learned CITA order and the paper book filed before us. We also find that the Learned CITA had adopted the peak credit theory for putting this disp .....

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ration that whether the adoption of peak credit theory is right in the facts and circumstances of the case. The credits and debits in the bank account represents business transactions of M/s Hindusthan Cargo Carriers on which point there is no dispute. However we find that the assessee had accepted for adoption of peak credit theory in the instant case. The theory of peak credit has been given due credence in the following cases:-Page 4, 9.1 to Page 6:- 9.1 The principle of peak credit have been .....

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nding of concealment may be supported by the assessee s own admission of guilt. This, however, is not such a case. It is true that the assessee did not produce evidence to support the case of the hundi loans being genuine. It is also true that the assessee was willing to get the assessment settled on the basis that the peak credit in that account represented its taxable income. This offer of assessment, by itself, cannot, however, amount to an admission that income had been concealed. On the con .....

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ed the one and only basis for the penalty levied by the Commissioner which furnished the one and only basis for the penalty levied by the Inspecting Assistant Commissioner, we are satisfied that the Tribunal was right in holding that the petition, by itself, would furnish no evidence whatever of concealment of income. Our answer to the question of law propounded by the Department is, therefore, in the affirmative and in favour of the assessee. The Hon ble Madras High Court in the case of CIT vs. .....

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T Kolkata in the case of ITO vs Uday Shankar Mahawar vide ITA No.1903/Kol/2009 order dated 16.07.2010 is reproduced as under:- 4.7 I have carefully considered the various legal pronouncements relied upon by the appellant. They also support the contention of the appellant that only the combined peak credit of the undisclosed bank accounts should be considered as undisclosed income. The decision of ITAT, Ahmadabad in the case of Nitesh R. Dalwadi vide ITA No.53/Ahd/2013 for A.Yrs 2009-2010 order d .....

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he assessee. Therefore, we are not inclined to interfere with order passed by ld. CIT(A) and the same is hereby upheld. The Hon ble Madras High Court in the case of CIT vs. P.M.P Soundara Pandiyan Brothers 13 Taxman 471 (Madras) has held as under:- Although as many as three questions have been framed, the real issue for decision is whether the Tribunal s finding that the assessee had not concealed its income in respect of cash credits can be regarded as a reasonable view on the facts on record. .....

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here really was no material for the department on the basis of which it could confidently be said that they represented the assessee s income which had not suffered tax and which was concealed in the garb of cash credit entries in accounts. It is true that the assessee itself had offered the peak credit for the purpose of assessment. But it is not suggested anywhere in the proceedings either of the ITO or of the IAC that while offering the peak credit for the assessment purposes, the assessee ha .....

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