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Income Tax Officer, Ward 11 (4) , Ahmedabad Versus Shri Tikamchand Mutha and Shri Sureshchand Mutha

2016 (3) TMI 961 - ITAT AHMEDABAD

Unexplained cash deposits in the bank account by adopting peak cash deposits (on 60 days basis) - Held that:- CIT(A) observed that even if it was accepted that peak theory would be valid in this case, because the assessee was in the business of financing; the day to day peak could not be applied in the present case because as admitted by the father of the assessee and the Authorized Representative of the assessee that the loan was disbursed by the assessee to various persons for 2 to 4 months. T .....

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x that peak amount as unexplained investment of the assessee. Therefore, these reasoned and factual findings of the CIT(A) do not require any interference from our side

Addition on account of cash credit - Held that:- This addition in question has been confirmed the CIT(A) in appeal on the ground that the assessee has failed to prove the genuineness of loans from the parties and creditworthiness of other depositors. It is not in dispute that no such proof was furnished before the Asse .....

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CO No. 106/Ahd/2010, ITA No. 831/Ahd/2010 & CO No. 107/Ahd/2010 - Dated:- 19-2-2016 - SHRI SHAILENDRA K. YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER For The Revenue : Shri Dinesh Singh, Sr-DR For The Assessee : Shri Kishor Goyal, AR ORDER PER SHAILENDRA K. YADAV, JUDICIAL MEMBER: These two appeals filed by the Revenue and the Cross-objection thereof filed by the respective assessees are directed against the orders of the Commissioner of Income Tax (Appeals)-XVI, Ahmedabad, .....

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ught to tax, as unexplained investment. 2. The Ld. CIT (A) has failed to appreciate that there is no presumption in law that peak cash deposits only should be assessed, the onus is on the assessee / persons making the claim that such advances given earlier have been received back (to substantiate such claim). In the absence of such claim the entire cash deposit has to be assessed as unexplained investment. 3. The Ld. CIT (A) is not correct in directing to adopt only the peak deposit in the bank .....

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2.1 Apart from above, the Revenue has raised following revised grounds of appeal:- 1. The Id. CIT(A) is erred in law and on facts in restricted addition of ₹ 27,02,980/- made on account of unexplained cash deposits in the bank account by adopting peak cash deposits (on 60 days basis) and directing that peak investment deposit only should be brought to tax, as unexplained investment. 2. The other grounds of appeal in sr. no. 2 to 5 are same as original grounds of appeal filed as above. 2.3 .....

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the said addition also and should have accepted the Returned Income. It be so held now. 4. The respondent craves leave to add, alter, amend or withdraw any of the grounds of cross objection on or before of the final hearing of appeal. 3. The brief facts of the case are that the assessee is an individual, deriving income from commission and interest. For the year under consideration, the assessee filed return of income on 13.07.2007 declaring total income at ₹ 1,02,370/-. During the assess .....

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use notice dated 08.09.2009, which was not complied with. The Assessing Officer also observed that the assessee has deposited the cash and then issued cheques to various parties as discussed in para 4 of the assessment order. Since the assessee has failed to offer any explanation regarding the source of cash deposits of ₹ 27,02,980/-, he treated the same as unexplained cash investment and made addition in the total income of the assessee. 3.1 Matter was carried before the First Appellate A .....

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law and on facts in restricted addition of ₹ 27,02,980/- made on account of unexplained cash deposits in the bank account by adopting peak cash deposits (on 60 days basis) and directing that peak investment deposit only should be brought to tax, as unexplained investment. The Departmental Representative further submitted that the CIT (A) has failed to appreciate that there was no presumption in law that peak cash deposits only should be assessed, the onus is on the assessee / persons maki .....

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ded that the order of the CIT(A) may be set aside and that of the Assessing Officer be restored. On the other hand, ld. Authorized Representative for the assessee submitted that the whole addition in question should be deleted, as enunciated in the grounds of cross-objections filed by the assessee. In the rejoinder, the ld. Departmental Representative vehemently opposed the cross-objections of the assessee. 3.2 After going through the rival contentions and material on record, we find that no boo .....

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f the assessee in Assessment Year 2007-08. Alternative contention of the assessee before CIT(A) in this regard was that at the most peak cash deposits should be taxed in the hands of the assessee and the credit of opening cash balance of ₹ 5,21,000/- should be given to the assessee. In this regard, from the copy of the bank account of Punjab National Bank, CIT(A) found that various cheques had been issued immediately after the cash amount were deposited in this account. For this, the fathe .....

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as admitted by the father of the assessee and the Authorized Representative of the assessee that the loan was disbursed by the assessee to various persons for 2 to 4 months. The CIT(A), therefore, held that if peak theory is to be applied, then the peak has to be worked out on the basis of 60 days; meaning thereby, if a cash withdrawal is made on the first day then, it can be expected to be deposited in the bank account of the assessee on or after 61st day. Similarly, withdrawal of second day co .....

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