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2017 (5) TMI 918 - ITAT AHMEDABAD

2017 (5) TMI 918 - ITAT AHMEDABAD - TMI - Unexplained cash deposits addition - Held that:- It is evident from the case file that the assessee has not been able explain source of her deposit in question as well as cogent material in support of the latter plea (supra). We thus find no reason to interfere with the CIT(A)ís conclusion - Decided against assessee. - ITA No. 2477/Ahd/2014 - Dated:- 18-5-2017 - Shri S. S. Godara, Judicial Member And And Shri Pradip Kumar Kedia, Accountant Member By Asse .....

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t. The Registry has already issued RPAD notice dated 10.04.2017. The same has been received back unserved. We thus proceed ex parte against the assessee. Her main appeal is taken up for adjudication on merits. 2. The assessee s sole substantive ground challenges unexplained cash deposits addition of ₹ 17.77lacs as made by the Assessing Officer and affirmed in lower appellate proceedings on account of her failure in both proving source as well as substantive evidence of rotation of the same .....

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f appeal as per appeal memo) pertains to the Income Tax Officer, Ward-7(l), Surat has erred both in facts and in taw by making addition of cash deposits in the bank accounts. On the perusal of the details, it is observed that the appellant is having only salary income and the bank account in Kotak Mahindra Bank was not disclosed by the appellant. The AO had AIR information regarding the undisclosed bank account in Kotak Mahindra Bank which was not disclosed by the appellant even on specific quer .....

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evidence in form of bill, vouchers etc. In absence of primary documents the benefit of the peak credit also cannot be given to the appellant. 6.1.1 It is an obligatory duty cast upon a person filing the return of income to disclose all his income derived from any source under various heads and indicate the income under each head, which is chargeable to income-tax, after making the permissible deductions. Disclosure of income would be disclosure of particulars of income, which a person is duty b .....

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e AO is satisfied that the return is correct and complete, as were the wordings of section 143(1) at the relevant time, he has to assess the total income without requiring the presence of the assessee or production by him of any evidence that the return is correct and complete, as laid down in section 143(1). Where, however, the AO is not satisfied without the presence of the assessee or production of evidence that the return is correct and complete, he is required to issue notice enabling the a .....

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e in respect of the particulars of income which are required to be stated in the return, he will reach the correct figure of total income, and determine the sum payable by the assessee or refundable on the basis of such assessment. If the income chargeable to tax has escaped assessment for any assessment year, by reason of omission or failure of the assessee to disclose fully and truly all material facts necessary for his assessment, reassessment proceeding can be initiated as provided under sec .....

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ge the burden of proof vis-a-vis peak credit. The appellant's claim of applying peak credit is without any material or basis. An analysis of the peak credit concept will clarify that the appellant's claim is not valid. The concept of peak credit holds that sometimes, an assessee may conduct his unaccounted transactions through one or more bank accounts or may record such transactions in a vague manner in one or more books. The deposits in such bank accounts may reflect. • Unaccounte .....

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he debits (Payment) may give an indication of the total unaccounted money in the possession of the assessee which may be assessed as his income. 6.1.4 But the peak credit statements can be prepared only if records for the receipt and payment of money for the entire accounting period are kept. The record need not: be regular books of account maintained under double entry system. Even a rough account where dates of receipt and payment of money are recorded would suffice. For example: where an asse .....

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flat on merits and facts as he is unable to demonstrate the source and utilization of the cash deposits and withdrawals in the Bank accounts as discussed above. 6.1.5. The complete contention of appellant has been examined. It is a matter of fact that this secret Bank A/c would not have come to the knowledge of the tax department save the use of technology and collection of information by the Income Tax Department regarding high value transactions through Banking and Financial institutions. The .....

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n the first sense, if the burden is not discharged, the party must eventually fail. In the second case, where the parties have joined issue and have led evidence and the conflicting evidence can be weighed to determine which way to issue can be decided, the question of burden of proof becomes an abstract question and is therefore academic. Section 101 to 114 of Indian Evidence Act, 1872 deals with burden of proof. Section 102 of the Evidence Act provides that the burden of proof lies on that par .....

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it is taxable. Where, however, the assessee claims exemption, the burden is on the assessee to prove it to be exempt. Same is the position in case of allowances,-deductions, or claims of loss, etc. Similarly, where there is a statutory rebuttable presumption against the assessee, as in case of cash credits etc., u/s 68 or unexplained investment u/s 69, the initial burden of proof is on the assessee to show that the cash credit is genuine or the investment is not unexplained. The AO should, there .....

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les of Preponderance of Probability, unlike, in criminal proceedings where proof beyond reasonable doubt is insisted upon. It is open to the Assessing Officer to probabilise his stand and show its preponderance where conclusive proof is not forthcoming. The observations of the Supreme Court in State of West Bengal v. Mir Mohammad Omar and Others JT 2000(9) SC 467 made in the context of a criminal case are relevant for our purpose. "The pristine rule that the burden of proof in on the prosec .....

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.1.7. This raises the question whether the apparent can be considered as real. As laid down by Apex Court in the case CIT v. Durga Prasad More [1971] 82 ITR 540, apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. The Hon Supreme Court held .....

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