TMI Blog2015 (1) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... ore them and they shall allow letting in of necessary evidence, if the assessee so desires. The limited question to be considered is whether the assessee is entitled to any benefit on the basis of peak credit theory. In the result, the order under challenge is set aside and the matter is remanded to the learned Tribunal for re-hearing. The learned Tribunal is requested to hear out the matter within a period of six months from the date of communication of this order. - G. A. No. 3801 of 2014 and I. T. A. T. No. 197 of 2014 - - - Dated:- 14-1-2015 - Girish Chandra Gupta And Arindam Sinha, JJ. For the Appellant : N. K. Poddar, Senior Advocate, with V. Tibrewal, Advocate For the Respondent : S. B. Saraf, Advocate JUDGMENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T reported in [1964] 51 ITR 757 (Mad), wherein the following view was expressed (headnote) : Where the Income-tax authorities make an addition to the income of the assessee over and above the income as disclosed by the asses see, on an estimate basis, the amount so added must be treated as the real income of the assessee. It is not open to the authorities to take the view that the addition was only for purposes of taxation and that it should not be regarded as the true income of the assessee. 3. The aforesaid view of the Madras High Court was affirmed by the apex court in the case of Anantharam Veerasinghaiah and Co. v. CIT reported in [1980] 123 ITR 457 (SC), wherein the following views were expressed (page 462) : In the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded as the source of unexplained expenditure incurred or of cash credits recorded during a subsequent assessment year. The mere availability of such a fund cannot, in all cases, imply that the assessee has not earned further secret profits during the relevant assessment year. Neither law nor human experience guarantees that an assessee who has been dishonest in one assessment year is bound to be honest in a subsequent assessment year. It is a matter for consideration by the taxing authority in each case whether the unexplained cash deficits and the cash credits can be reasonably attributed to a pre-existing fund of concealed profits or they are reasonably explained by reference to concealed income earned in that very year. In each case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be any continuity of transactions which may be possible in the case of an ordinary trader. (b) The point as regards applicability of peak credit theory was never advanced before the Assessing Officer nor in the memo of appeal before the Commissioner of Income-tax (Appeals). 5. Mr. Poddar disputed this submission of Mr. Saraf. He drew our attention to the grounds of appeal as would appear from the judgment of the Commissioner of Income-tax (Appeals). He drew our attention to ground Nos. (ii) and (iii) which reads as follows: (ii) That on the facts and circumstances of the case, the learned Assessing Officer is wrong and unjustified in considering the entire deposit made into the bank as undisclosed/unexplained cash credit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income-tax (Appeals). The learned Tribunal has also not considered the question in the correct perspective. The Tribunal appears to have proceeded solely on the basis of the judgment of the apex court in the case of Kale Khan being unmindful of the fact that in the case of Kale Khan, the scope of meaning of section 68 was in issue but the Supreme Court was not concerned with an identical set of facts which are before us. What will be the implication after section 68 is applied to the opening balance of a little over ₹ 12 lakhs in this case vis- a -vis the further transactions is a serious question of fact which has to be considered and for that purpose we are of the opinion that a remand is required. We should not be deemed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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