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2016 (7) TMI 70 - GUJARAT HIGH COURT

2016 (7) TMI 70 - GUJARAT HIGH COURT - TMI - Addition under Section 68 - Held that:- The materials on record would suggest that admittedly, the assessee had maintained two bank accounts, not disclosed to the Revenue authorities. In such bank accounts, multiple cash deposits were made by the assessee from different places. The assessee initially explained that such deposits were made by his friends and he, in turn, would withdraw the amounts at Ankleshwar and handover the cash to the friends for .....

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thdraw 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 material was produced regarding the same.Considering such .....

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tion: 1. Whether on facts and in law, the Tribunal is right in confirming order of CIT(A) which confirms addition of ₹ 13,22,400/- as unexplained cash credit u/s. 68 of the Act? 2. Whether on facts and in law, the Tribunal is right in confirming order of CIT(A) which confirms addition of ₹ 12,55,501/- as unaccounted income from undisclosed sources? 3. Whether on facts and in law, the Tribunal is right in confirming addition without considering case laws and submission filled? 4. Whet .....

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x 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 ca .....

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₹ 1000/- for such purpose. He, however, refused to give names and addresses of such friends. In view of this, the Assessing Officer made above additions making following observations: 4.3 First of all, it is pertinent to mention here that the assessee is a well educated person having a degree in Science. He is fully aware of the consequences of such unaccounted transactions. Therefore, deliberately, the assessee did not disclose the source of credits in his bank account. From the above re .....

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been deposited from various cities across the country right from Silliguri in West Bengal to Madurai in Tamil Nadu. It is unbelievable that 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 .....

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in preceding paragraphs. The sole issue in the instant appeal is as to whether both the lower authorities have rightly added cash deposits/cheques credited in assessee's two bank accounts is unexplained or not. There is no dispute that these deposits have been made from various destinations throughout the country. The assessee's first contention that he is engaged in chemicals business and impugned deposits are his business transactions. We find this plea to be a u-turn to the explanatio .....

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ings. However, the only limitation is that the same must have element of genuineness and creditworthiness to further buttressed by identity of the parties concerned. No such course of action has been adopted in the instant case. The assessee's next argument of having charged ₹ 500/- to ₹ 1000/- in each case also suffers from the same lacuna of cogent evident. We find no substance in his argument challenging the impugned additions on merits. 6. The assessee's next argument see .....

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of money. We are of the opinion in this backdrop of fact that this third party indulgence in making the impugned credits and deposits falsifies his entire explanation. It goes against the basic tenet of the peak credit principle wherein an assessee proves withdrawal and redeposits of very money by linking the same through evidence of bank statement etc. We find no merit in this peak credit argument in these facts and circumstances. The assessee's case law referred to deal with a situation wh .....

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axed the entire cash credit. He submitted that under identical circumstances, the Tribunal in case of Income Tax Officer, Ward 9(2), Surat vs. Shri Indrajeet Zandusing Tomar, had given the benefit of peak credit which judgement was upheld by the High Court. 6. The materials on record would suggest that admittedly, the assessee had maintained two bank accounts, not disclosed to the Revenue authorities. In such bank accounts, multiple cash deposits were made by the assessee from different places. .....

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