TMI Blog2014 (3) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer within the course of recording of statement of the assessee, during assessment proceedings - The assessee even failed to produce the books of account - In the absence of the assessee having discharged his onus of proving the identity, credit worthiness and genuineness of the cash transaction of the cash credits in the bank account, there was no merit in the plea of the assessee - the provisions of section 68 of the Act are applicable. - Decided against assessee. Applicability of peak credit theory – Held that:- The peak credit theory is not applicable as the assessee had deposited cash in the bank account and thereafter, cheques were issued to different parties - there are deposits in cash but as against the said cash deposited, various cheques were issued and the assessee was unable to explain the source of cash deposited in his bank account – Decided against Assessee Addition made on account of low household expenses - Held that:- The family of the assessee consisted of father, mother and three brothers and total withdrawal of ₹ 1,08,000/- was made for household expenses during the year under consideration. In addition, the assessee had incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k accounts and also cheques issued from such bank accounts in a consolidated manner and a bare look at the various deposits and issuance of cheques immediately, thereafter, prove that it is a simple case of providing the accommodation entries especially, considering the fact that maximum balance outstanding at any given point of time was ₹ 1,38,690/- only and had it been the assessee's own money, then amount would have remained in the Bank Account substantial period and nature and nexus of the entries in the Bank clearly establishes that it was simple case of providing accommodation entries. 6. That the learned CIT(A)-I, Ludhiana has also not considered that even from a bare look of the balance sheet, it is clear that there are hardly an assets of the assessee and his capital is just ₹ 2,04,793/- which also proves that it is a case of providing accommodation entries only . 7. That the learned CIT(A), Ludhiana has erred in upholding the addition of ₹ 72,000/- on account of alleged low household expenses by not considering our submissions properly. 8. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07-08) vide order dated 27.06.2013 held as under : 16. We have heard the rival contentions and perused the record. In the facts of the present case the assessee under appeal is for assessment year 2007-08 for the period ending 31.3.2007. The assessee during the year under consideration had furnished return of income declaring total income of ₹ 161,680/- filed on 01.11.2007. Survey u/s 133A of the Act was conducted on the premises of the assessee on 31.10.2007 and the statement of the assessee was recorded on 31.10.2007. The copy of the statement of the assessee recorded during the course of survey is placed on record. A perusal of the said statement reflects that the claim of the assessee during survey was that M/s Super Finvest (P) Ltd. was sub-broker by LSE Securities Ltd. and also working as share broker. In respect of M/s Big Bull Commodities P.Ltd. and M/s Best Buy Commodities P.Ltd., the assessee stated that these were engaged in accommodation entries; M/s Shubh Krishna Commodities P.Ltd. was stated to be engaged in commodity trading and as sub-broker on commission basis. It was claimed by the assessee that it was engaged in giving accommodation entries. 17. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was stated by the assessee that Reply is same as stated on 15.12.2009 . He further submitted that he would state further relating to cash during the course of assessment proceedings. 18. The Assessing Officer from the perusal of the bank accounts of the assessee worked out the cash credits in the said bank accounts totaling to ₹ 126,66,000/- as per details in annexure-B to the assessment order. The Assessing Officer further noted that while recording the statement, the assessee was asked to produce 10 persons for verification and the assessee failed to produce any person for verification nor any confirmation was filed by the assessee. The assessee had failed to discharge the initial burden cast upon him to prove genuineness of the amounts credited in his books of account i.e. by proving the identity of the persons, who handed over the cash to the assessee or production of the relevant books of account where name, address and transactions entered by them were reflected nor furnishing any details of such persons who had given him the cash and even credit worthiness of the persons giving cash could not be proved. The assessee had failed to file the requisite details durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that the cash was deposited as per books of account on behalf of the clients. Vide query No.8, the assessee was asked to provide the names and addresses of the customers/clients who had deposited these amounts. The reply of the assessee in this regard was, If details are there, I will check from books of account and provide the same. The assessee, thereafter was directed to produce atleast 10 persons who had deposited ₹ 1 lac and above in the bank account. The assessee explained that he will verify from record and let the Assessing Officer know about it. In reply to query No.10, the assessee claimed that cash is received from customers and same is deposited in bank. The plea of the assessee before the Assessing Officer was that he was engaged in the business of commodities and query No.12, 13 were raised in respect of the commission received from Ludhiana Commodities Exchange. The reply of the assessee to query No.13 i.e. Are you registered with Ludhiana Commodity Exchange was that Only M/s Shubh Krishna of which HUF is the proprietor and I am karta of HUF is registered with LCE and other companies and firms in which I am Director or Proprietor are branches/traders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as per query No.24, there was a specific query raised to explain various cash credits/deposits in the bank accounts of different companies in which the assessee was the Director and the assessee was also asked to give source of cash deposits in various accounts. In reply to the same, a short reply was given by the assessee that it is the same as what is stated on 15.12.2009. At the conclusion of recording of the statement, the assessee stated that he would further explain relating to the cash, during the course of assessment proceedings. However, the assessee failed to produce the books of account nor give any explanation vis- -vis the source of cash deposits in the bank account. In the absence of any explanation or any evidence being produced by the assessee. The onus cast upon the assessee not being discharged, the said cash credits are to be included as income of the assessee in view of the provisions of section 68 of the Act. 23. Section 68 of the Act reads as under : 68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o produce the books of account. In the absence of the assessee having discharged his onus of proving the identity, credit worthiness and genuineness of the cash transaction of the cash credits in the bank account, we find no merit in the plea of the assessee in this regard and dismiss the same. 25. Another plea raised by the ld. AR before us was that as the assessee was engaged in giving accommodation entries, only commission should be included as income of the assessee. Admittedly, while recording the statement during the course of survey, the assessee had stated that it was engaged in the business of giving accommodation entries. However, during the course of assessment proceedings, the assessee did not raise any submissions in this regard and on the other hand, the assessee time and again, in the course of statement recorded during the assessment proceedings, pointed out that the cash deposited in the bank account was as per entries in the books of account and the same would be explained from the books of account. The plea of accommodation entries was not put to the Assessing Officer. However, before CIT(Appeals), a plea was raised that only commission is to be added in the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 1,26,66,000/-. We find support from the ratio laid down by the Hon'ble Allahabad High Court in Bhaiya Lal Shyam Behari V Commissioner of Income-tax (supra) wherein the Court held as under : During the assessment year in question certain amount of cash credits standing in the names of various persons were added in the income of the applicant by invoking the provision of section 68 of the Act. Before the Tribunal the alternative plea was taken by the applicant that in the event deposit/cash credits are treated to be unexplained then only peak credit is to be added. The submission has been negatived by the Tribunal in the following words : 13. Let us suppose that in the account of 'A', there was shown a deposit of ₹ 10,000 on April 1,1978, and in the account of 'B' there was a deposit of ₹ 10,000 on December 1, 1978. The assessee has not established the genuineness of these two deposits. Now according to the assessee in case there was a withdrawal of ₹ 10,000 in the account of 'A' prior to the deposit of ₹ 10,000 in the account of 'B' then no separate addition should be resorted to on account of unexplaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For adjudicating upon the plea of peak credit the factual foundation has to be laid by the assessee. He has to own all cash credit entries in the books of account and only thereafter the question of peak credit can be raised. As in the present case the amount of cash credits were standing in the names of different persons which all along the applicant had been claiming to be genuine deposit, withdrawal/payment of the amount to different set of persons during the previous years would not at all entitle the applicant to claim benefit of peak credit. In this view of the matter we do not find any legal infirmity in the order of the Tribunal. We answer the aforesaid questions referred to us in the negative, i.e. in favour of the Revenue and against the assessee. There will be however, no order as to costs. Other Information In favour of revenue 29. The grounds of appeal No. 1(a) to 1(c) raised by the assessee are, thus dismissed and the grounds of appeal raised by the revenue are allowed. 7. The issue raised in the present appeal is identical to the issue raised before the Tribunal (supra) in the bunch of appeals and following the same parity of reasoning, we dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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