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Shri Jitendra M. Doshi Versus ACIT Circle-9, Mumbai.

Peak credit of additions - whether AO as well as CIT (A) has erred in not appreciating the peak working as submitted by the appellant, without giving any reasons for the same - Held that:- It is obvious that no separate direction is uncalled for as the normal steams of income has to be taxed separately. Further, in our opinion, the income receipts credited to P & L Account or bank account earned out of business are outside the exercise of peak credit analysis and they are separately taxed ie in .....

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u/s 271(1)(c) - Held that:- We agree with the view taken by the CIT (A) while upholding the penalty orders passed by the AO u/s 271(1)(c) of the Act in respect of all the assessment years under consideration. Accordingly, the decision taken by CIT (A) vide paras 5.6 and 5.7 of his order is fair and reasonable. However, as contended by the Ld Counsel for the assessee the penalty levied by the AO @ 200% of the tax to be evaded by reason of concealment of income is on higher side and therefore, con .....

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T-DR ORDER PER B ENCH: There are ten appeals under consideration. All these appeals are filed by the assessee involving the assessment years 2002-03 to 2006-07 against the common order of the CIT (A)-37, Mumbai dated 31.7.2014. Since, the issues raised by the assessee in all these appeals are inter-connected and therefore, for the sake of convenience, they are clubbed, heard combinedly and disposed of in this consolidated order. Appeal wise adjudication is given in the following paragraphs of th .....

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sessee in this appeal read as under: 1. On the facts and circumstances of the case and in law, the Ld AO as well as CIT (A) has erred in not appreciating the peak working as submitted by the appellant, without giving any reasons for the same. 2. On the facts and circumstances of the case and in law, the Ld AO as well as CIT (A) has erred in working out peak balance by not giving credit of income offered by the assessee in the return of income emerging out of the same bank statements. 3. On the f .....

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ucted in this case on 26.7.2007. Accordingly, a notice u/s 153A of the Act was issued and served on the assessee on 19.12.2008. In response to the said notice, assessee filed the return of income originally declaring the total income of ₹ 7,79,486/- which was revised declaring the total income of ₹ 6,18,980/- including the agricultural income of ₹ 2,93,540/-. AO completed the assessment u/s 143(3) r.w.s 153A of the Act and the assessed income was determined at ₹ 85,12,270 .....

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tural income of ₹ 3,90,083/-. Again aggrieved, assessee filed an appeal before the Tribunal. In the first round of proceedings, ITAT vide its order in appeal ITA No.3310 to 3316/Mum/2011 dated 29.8.2012 directed the AO to make additions of unaccounted bank account on the basis of the peak credit of all the bank accounts after considering the unexplained investment sourced from these bank accounts to the extent of peak credit available in bank accounts for that particular assessment year. I .....

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uthority, before disposing of the assessee‟s appeal, CIT (A) examined the relevant record and found that mainly the grievance was on account of the credit to be given for the peak credit computed as taxable in a preceding year while computing the peak credit for the subsequent assessment year. In this regard, CIT (A) observed that the AO computed the peak credit for each assessment year on standalone basis. For that purpose, AO reduced the closing balance at the end of the relevant previou .....

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d no addition on account of peak credit was to be made for that assessment year. In other words, it was the contention of the assessee that only incremental peak can be considered as taxable unexplained investment for that subsequent year. In this regard, after considering the submissions of the assessee, CIT (A) observed that in the earlier round, the AO has considered each bank account independently despite the directions of the ITAT to consider all the bank accounts together and only the cumu .....

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stments can be considered to be accounted for by the peak cumulative of all bank accounts closing balance only, if the daily balance of the two ie bank balances and the unexplained investments are considered together each day. Further, CIT (A) held that the action of the Assessing Officer in actually taking balance at the end of the year, in any case, is totally incorrect. Accordingly, he directed the AO to consider the computation of incremental peak for the respective assessment years computed .....

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n of the regular income in the assessed income in addition to the regular peak credit related additions. Aggrieved and dissatisfied with the said decision of the CIT (A), assessee is in further appeal before the Tribunal by raising the above mentioned grounds. 6. During the proceedings before us, Ld Counsel for the assessee reiterated the submissions made before the lower authorities. It is the contention of the assessee that the regular additions need not be made in the cases where peak credits .....

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rst round of the proceedings and also the relevant material placed before us. On perusal of the said decision of the Tribunal (supra) in the first round, we find the Tribunal‟s directions are only on the peak credits and there is no reference to the normal steams of income. It is obvious that no separate direction is uncalled for as the normal steams of income has to be taxed separately. Further, in our opinion, the income receipts credited to P & L Account or bank account earned out o .....

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nable and it does not call for any interference. Accordingly, the grounds raised by the assessee are dismissed. 9. In the result, appeal of the assessee is dismissed. ITA No.6240/M/2014 (AY 2003-04) ITA No.6241/M/2014 (AY 2004-05) ITA No.6242/M/2014 (AY 2005-06) ITA No.6243/M/2014 (AY 2006-07) 10. These appeals are filed by the assessee against the said common order of the CIT (A)-37, Mumbai dated 31.7.2014. In all these appeals, assessee raised the identical issues to that of the ones raised by .....

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CIT (A) and dismiss the appeal instant appeals of the assessee. Accordingly, all the grounds raised by the assessee in the appeals under consideration for the AYs 2003-04 to 2006-07 are dismissed. 11. In the result, all the four appeals filed by the assessee are dismissed. ITA No. 6172/M/2013 (AY 2002-2003) ITA No. 6173/M/2013 (AY 2003-2004) ITA No. 6174/M/2013 (AY 2004-2005) ITA No. 6175/M/2013 (AY 2005-2006) ITA No. 6176/M/2013 (AY 2006-2007) 12. These five appeals are filed by the assessee ag .....

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ty u/s 271(1)(c) of the Act which was worked out @ 200% of the tax sought to be evaded on the assessed income, without considering the facts and circumstances of the case. 2. On the facts and circumstances of the case as well as in law, the Ld CIT (A) erred in wrongly interpreting the decision of Hon‟ble ITAT for quantum while deciding the penalty appeal and not considering the submission of the appellant. 3. On the facts and circumstances of the case as well as in law, the Ld CIT (A) ough .....

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me shown in the return of income filed in response to notice u/s 153A on the ground that no returns of income have been filed as per the provisions of section 139 of the Act for the respective assessment years. Similarly, penalty proceedings were also initiated in respect of unexplained deposits in bank accounts as well as unexplained investments made by the assessee. While disposing of the quantum appeal, we have already discussed the facts of this case and they include during the assessment pr .....

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nder consideration commonly dated 28.3.2012, imposing penalty @ 200% of the tax sought to be evaded on the ground of concealment of income. Against the said penalty orders, assessee filed appeals before the first appellate authority. 14. During the proceedings before the first appellate authority, assessee contended that the Hon‟ble ITAT set aside the assessment orders passed u/s 153A of the Act, and therefore, the quantum orders do not survive. In this regard, assessee relied on the decis .....

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der, CIT (A) held as under: 5.6. During the appellate proceedings, the AR did not offer any submission on merits in respect of penalty imposed in this case. I have therefore, no hesitation in upholding the penalty orders passed by the AO for all these assessment years. At the same time, penalty should be computed with respect to undisclosed income to be determined in terms of the directions of the Hon‟ble ITAT while giving effect to its order. 5.7. To clarify, the penalty orders passed by .....

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