9911796707
TMI Blog2015 (12) TMI 1612X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome at Rs. 2,07,110/- out of salary income. Thereafter the case of the assessee was selected for scrutiny under the CASS and accordingly statutory notices under section 143(2) and 142(1) dated 24.8.2011 were issued and served upon the assessee calling upon certain details and information. The case of the assessee was adjourned from time to time at the request of the ld AR of the assessee but the assessee did not appear the AO. Finaly the AO issued show cause notice u/s 271(1)(b) dated 4.10.2012 fixing the hearing on 12.10.2012 but to no avail. Again another notice dated 7.11.2012 u/s 271(1)(b) was issued to the assessee as to why the penalty of Rs. 10,000/- should not be imposed for each default of non compliance to the requirement of not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- on various dates during the year. The AO, therefore, was of the view despite giving various opportunities to produce the details as called during the assessment proceedings, the assessee did not comply with any of the notice and hence the AO proceeded to framed the assessment ex-parte u/s 144 of the Act by adding Rs. 29,55,106/- on account of cash deposits into bank account as income from other sources by assessing the income at Rs. 31,62,220/-. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A) who also dismissed the appeal of the assessee after considering the submissions and contentions of the assessee as incorporated in para 1.2 of the appeal order and observed and held as under: "1.3 Decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esumptive basis i.e. u/ s. 44AD @ 5% of the turnover. It was also suggested by the appellant that it may be assessed at the peak of the cash credit i.e. Rs. 1,15,340/- being the peak credit and not on the entire amount. The plea of the appellant cannot be accepted as this is not a case where the Ld. AO is making a addition on account of unexplained purchases or sales. The additions are made u/ s. 68 of the Act wherein unexplained credits appearing in the books of accounts of the appellant are taken into account. The appellant having failed to adduce any evidence to this effect and offered no valid explanation to the sources of credits, it squarely falls within the mischief of provisions of sec. 68 of the Act. 1.3.2 Section 68 comes into p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome". The effect of such a definition is not to single out, for specific mention, some of the things comprised within the natural import of the term defined, but the effect is to enlarge that import for the addition of certain things which would otherwise not be regarded in the other sense. In that view, the amount added under section 68 constitutes "income" for the purpose of the IT Act, 1961. The words "any sum found credited in the books" in section 68 bestow a large latitude to the provisions of section 68. Wherever a sum is found credited in the assessee's books of account, then irrespective of the colour or the nature of the sum received which is sought to be given by the assessee, the Assessing Officer has jurisdiction to enquire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odically withdrawn by the assessee for the purpose of purchases of scrap. The ld. AR submitted that there were regular deposits and withdrawals from the account which proved the case of the assessee that the amounts were deposited on various dates and were withdrawn immediately thereafter. It was argued that to add the entire amount of deposits under section 68 of the Act was grossly wrong and contrary to the provisions of the Income Tax act as the assessee could be taxed only in respect of the income earned and not the gross amounts deposited in the bank account without taking into account the corresponding withdrawals. The ld. AR prayed before the Bench that the ld. CIT(A) has grossly earned in not accepting the arguments of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld.CIT(A) dismissed the appeal of the assessee after rejecting the contentions of the assessee of applying peak credit theory or presumptive tax scheme under section 44AD of the Act. Under the present circumstances, we are of the opinion that ends of justice would be met if the assessee is brought to tax on the basis of peak credit worked out on the basis of deposits and withdrawals. Accordingly, we set aside the order of ld.CIT(A) and direct the AO to assess the income of the assessee on the basis of peak credit theory in the bank account of the assessee after affording a reasonable opportunity of hearing to the assessee. 7. In the result, appeal of assessee is allowed for statistical purposes. Order has been pronounced in the Open Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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