TMI Blog2016 (7) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... hemical and the deposits being part of his business transaction. First and foremost, this theory of the assessee's of the amounts belonging to his friends would be incongruent. If these amounts were established to be belonging to the friends of the assessee, for whom, he merely deposits the sums and withdraw at their requests for a small commission, the question of applicability of peak credit would not arise. When the assessee failed in his first attempt, he came up with the novel theory of the amounts being for the purpose of his chemical business. This theory probably was pressed in service to enable the assessee to seek the benefit of principle of peak credit. Before the Revenue authorities, this contention was not even raised. No mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer and confirmed by the CIT[Appeals] and the Tribunal under Section 68 of the Income Tax Act, 1961 ['the Act' for short]. The assessee had filed the return of income on 31.07.2010 for the assessment year 2010-11 disclosing income of ₹ 1.77 lacs. During the course of the assessment, the Assessing Officer found that the assessee had maintained two undisclosed bank accounts, one of HDFC Bank and another of The Ankleshwar Udyognagar Co. Op. Bank Ltd. Details of bank accounts and the deposits and withdrawals were called for. It was found that the assessee had deposited cash from different cities and withdrawn through ATM card and borrower cheques. Total cash credit in one of the accounts came to ₹ 13.22 lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had such a large network of friends. The assessee could be a part of Hawala racket. Therefore, this is nothing but the unaccounted transactions of the assessee. Since the assessee had miserably failed to explain the source of cash deposits and also the purpose of withdrawals through ATM, these transactions are nothing but the unaccounted income of the assessee from undisclosed sources within the meaning of Sec. 68 of the I.T.Act. 3. CIT[Appeals] confirmed the additions upon which, the assessee approached the Tribunal. The Tribunal by the impugned judgement, confirmed the additions making following observations: 5. We have heard viral contentions. Case file perused. Both parties reiterate their respective stands in supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find no substance in his argument challenging the impugned additions on merits. 6. The assessee's next argument seeks to invoke peak credit principle in the impugned addition. His case is that the relevant credit transactions have corresponding debit transactions wherein the very amount has been re-deposited. We find the same to be entirely a misconceived plea. We revert back to his explanation that his friends throughout the country have made the impugned deposits/credits without specifying their identity. This is his case from the beginning that he had been involved in transferring in and out the very sum of money. We are of the opinion in this backdrop of fact that this third party indulgence in making the impugned credits and dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mounts at Ankleshwar and handover the cash to the friends for a small commission. He, however, refused to supply details of such friends. Before the Tribunal, however, the assessee adopted the entirely novel theory of being engaged in the business of chemical and the deposits being part of his business transaction. First and foremost, this theory of the assessee's of the amounts belonging to his friends would be incongruent. If these amounts were established to be belonging to the friends of the assessee, for whom, he merely deposits the sums and withdraw at their requests for a small commission, the question of applicability of peak credit would not arise. When the assessee failed in his first attempt, he came up with the novel theory ..... X X X X Extracts X X X X X X X X Extracts X X X X
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