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2016 (3) TMI 1093 - ITAT AHMEDABAD

2016 (3) TMI 1093 - ITAT AHMEDABAD - TMI - Additions u/s 68 of cash deposits/cheques credited in assesses’s two bank accounts as unexplained - Assessee unable to substantiate the money deposited in his bank accounts - benefit of "peak credit principle" - Held that:- The assessee’s first contention that he is engaged in chemicals business and impugned deposits are his business transactions seems to be a u-turn to the explanation given before the lower authorities attributing the deposits made/che .....

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enuineness 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. - The assessee’s next argument seeks to invoke peak credit principle is irrelevant as it is is his case from the .....

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cumstances. The assessee’s case law referred to deal with a situation wherein the relevant facts would prove the above stated essential arguments on peak credit principle as against those involved in the instant case - Decided against assessee - Note:- On further, appeal the said addition was affirmed by Gujarat High Court as reported in [2016 (7) TMI 70 - GUJARAT HIGH COURT] - ITA No. 2767/Ahd/2014 - Dated:- 3-3-2016 - Shri Pramod Kumar, Accountant Member and Shri S. S. Godara, Judicial Mem .....

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enge the Assessing Officer s action inter alia making additions of unexplained cash credit u/s. 68 and unaccounted income from undisclosed sources of ₹ 13,22,400/- and ₹ 12,55,501/-; respectively as affirmed in the lower appellate proceedings. It emerges that factual background of both these issues is common. The assesseeindividual is an employee of M/s. Sky and Skylark Industrial Products, GIDC Ankleshwar and a partner in M/s. Rohan Chemicals. The Assessing Officer in the course of .....

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Officer asked him about the above stated credit and debit entry. He could not explain the former. He pleaded that debit entries represented ATM withdrawal. The Assessing Officer sought to know HDFC Bank cash deposit made from Saharanpur, Sikar, Balotra, Siliguri, Sonipat, Satna, Hydrabad, Kolkatta, Churu, Indore, Vijaywada, Rajamundri, Atbal, Ahmedabad, Kandiwali, Patna, Madurai and Bhiwani. The assessee stated that his friends had made all these deposits as withdrawn in Ankleshwar for ₹ 5 .....

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ughout the country. He was of the view that the former cash deposit could be a part of hawala racket as well. All this made him to invoke section 68 for making addition of ₹ 13,22,400/- as unexplained cash credits. The Assessing Officer thereafter adverted to assessee s cooperative bank account. His verification revealed that the above stated cheques were self drawn to prove all the debit entries were withdrawals by the assessee himself. The Assessing Officer treated these sums .....

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l. 5. We have heard rival contentions. Case file perused. Both parties reiterate their respective stands in support and against the twin substantive grounds raised in the instant appeal. We have already narrated the relevant facts 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 assesses s two bank accounts is unexplained or not. There is no dispute that these deposits have be .....

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nd accounts maintained with his so-called friends/customers engaged in chemicals business. We reiterate that it is open for an assessee to tender an explanation along with cogent evidence in support thereof is such kind of proceedings. 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 ch .....

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