TMI Blog2017 (8) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... a subsequent date, cannot be ruled out in the absence of any evidence proving to the contrary that the said funds had been utilised/exhausted by the assessee by way of an investment or expenditure. We find that the Ld. A.R in order to drive home his aforesaid contention had relied on a host of judicial pronouncements and orders of coordinate benches of the Tribunal. We have deliberated on the facts of the present case and finding substantial force in the contentions raised by the ld. A.R before us, therefore in all fairness and in the interest of justice set aside the matter to the file of the A.O, who is directed to work out the peak credit in terms of our aforesaid observations and restrict the addition to the amount of such peak credit. That for the removal of doubts, it may be clarified that the A.O while working out the peak credit shall allow credit only as regards the availability of such respective cash withdrawals made by the assessee during the year under consideration, which can safely be held to be available with the latter for redepositing on a subsequent date. Appeal of the assessee allowed for statistical purposes. - I.T.A. No.7510/Mum/2014 - - - Dated:- 21-6-2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment u/s. 143(2). 3. That during the course of the assessment proceedings the assessee vide his letter dated 12.06.2012 submitted before the A.O that he was holding only one S.B. Account No. 4605 with Citizens Credit Cooperative Bank, Branch: Dadar, Mumbai. However, as the A.O was in receipt of AIR information that the assessee had made a cash deposit of ₹ 31,54,000/- with Federal bank Ltd., Branch: Dadar (West), Mumbai, he therefore issued a Notice u/s. 133(6) and called upon the bank to furnish the copies of the Bank accounts maintained by the assessee with the bank during the period 01.04.2009 to 31.03.2010. That pursuant to the aforesaid notice the bank furnished a copy of the statement of SB Account No. 15050100036852 held by the assessee during the period 01.04.2009 to 31.03.2010. That a perusal of the aforesaid bank account of the assessee revealed that a cash deposit of ₹ 4,01,000/- was made in the said account during the financial year 2009-10. The A.O vide his letter dated 22.10.2012 called upon the assessee to furnish the details of his bank accounts including the Saving bank accounts and Current accounts which were operated by him during the year, alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f my opening cash balance and withdrawals from the same bank. As such, I am not in a position to know how the aforesaid figure of ₹ 31,54,000/- has been considered in AIR. I request you to give me a copy of AIR. 5. The assessee thereafter again vide his letter dated. 21.01.2013 declined of having made any cash deposit of ₹ 31,54,000/- with Federal Bank Ltd. The assessee vide his aforesaid reply further submitted that during the year under consideration he was not doing any business in his personal capacity. The latter part of the reply of the assessee which shall have a strong bearing on the adjudication of the issue under consideration, as is placed at Sr.no.1 of his aforesaid letter dated 21.01.2013, is reproduced as under:- I am not doing any business in my personal capacity and accordingly, no Books of accounts are required to be maintained u/s.44AA of the I.T. Act 1961. Accordingly, no Capital Account and Balance Sheet is being prepared for the year and last two years. Thus the assessee despite being confronted with the AIR information, which revealed that a cash deposit of ₹ 31,54,000/- was made by him with Federal Bank Ltd, however consis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 18.02.2013 submitted that the amount of ₹ 31,19,000/-(supra) represented the cash sales pertaining to his business of retail trade of gold ornaments carried on by him as a sole proprietor during the year under consideration, under the name and style of M/s. Rajendra Enterprises. The assessee further explaining the deposits of ₹ 20,37,955/-(supra) therein came forth with an explanation as regards the same, as under:- Cheques Deposited 1,05,800/- Cheque Deposited, but rejected/returned by the bank 16,82,150/- Cheque issued, but rejected/returned by the bank 2,50,000/- Bank interest 5/- The assessee further in contradiction of his earlier explanation as regards the source of cash deposit of ₹ 4,01,000/- (supra) in his SB Account No. 15050100036852 with Federal bank Ltd., Branch: Dadar (West), Mumbai, now vide his aforesaid reply related the same with the cash sales of his aforesaid sole proprietary business. 8. The A.O after deliberating on the explanation of the assessee as regards the cash depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be taken as part of the income of the assessee, because the said amounts had never came to the assessee due to the rejection of the payments against the cheques issued. The CIT(A) further going by the contention of the assessee that there were certain other entries in his SB Account No. 15050100036852 with Federal Bank Ltd, which too were subsequently reversed and rejected, therefore directed the A.O to make necessary verification from the bank and delete the additions relatable to the cheques which were found to be rejected in the account during the year. The CIT(A) however not finding favour with the explanation of the assessee as regards the source of ₹ 1,70,000/- and ₹ 31,54,000/-, therein holding a conviction that the assessee had failed to come up with a plausible explanation as regards the nature and source of the said respective cash deposits, therefore rejected the same and upheld the addition made by the A.O. However, the CIT(A) in the backdrop of the contention of the assessee that the aggregate of the cash deposits in his bank account No. 1505010030087 (supra) amounted to ₹ 31,19,000/-, while for the same had been taken at ₹ 31,54,000/-, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale proceeds of his retail trade business in gold ornaments carried on under the name and style of M/s. Rajendra Enterprises during the year under consideration, was merely an eye wash and thus could not be accepted. The ld. D.R submitted that not only the assessee had failed to substantiate his explanation by placing on record any material in support thereof, but rather till 21.01.2013 (supra) he had consistently been stating in his replies furnished with the A.O that he was not doing any business in his personal capacity. It was thus averred by the ld. D.R that the explanation of the assessee was not only devoid and bereft of any force, but rather being in serious contradiction of his averments made before the A.O, had thus rightly been rejected by the lower authorities. The ld. D.R. reverting to the contentions raised by the assessee that the addition may be restricted to the amount worked out on the basis of Peak credit theory, therein submitted that no such plea was ever raised by the assessee before the lower authorities. The Ld. D.R thus vehemently submitted that in the backdrop of the facts of the case the appeal of the assessee deserved to be dismissed. 11. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ried his level best to stall the enquiries being made by the A.O, so that the latter may not gather information about the bank accounts which the assessee was holding with Federal Bank Ltd. However, we find that it was only when the A.O who was in possession of the AIR information which revealed that the assessee had made a cash deposit of ₹ 31,54,000/- (supra) with Federal Bank, Branch: Dadar (West), Mumbai, being not satisfied with the replies of the assessee, therein called upon the bank to furnish details of the bank account where ₹ 31,54,000/- was deposited by the assessee as per the AIR submitted by the bank, that the bank came forth with the information about the SB. Account No. 15050100030087 which was held by the assessee during the period 01.04.2009 to 20.07.2009. Thus, it was only when the A.O vide his Show cause notice dated. 24.01.2013 confronted the SB Account No. 15050100030087 to the assessee and called upon him to explain as to why the aggregate of the credits of ₹ 51,56,955/- (Rs.31,19,000/- (+) ₹ 20,37,955/-) may not be treated as an unexplained cash credit in his hands u/s. 68, that the assessee for the very first time vide his letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the sale proceeds of his retail trade business in gold ornaments. We thus in the backdrop of our aforesaid observations are not at all impressed by the explanation of the assessee, either as regards the source of ₹ 31,19,000/-(supra) or ₹ 1,70,000/-(supra), and therefore uphold the observations of the CIT(A) to the said extent. 13. We shall now test the claim of the ld. A.R that if the explanation as regards the source of the cash deposit of ₹ 31,19,000/- (supra) and ₹ 1,70,000/- (supra) is not to be accepted, even then the addition in the hands of the assessee is liable to be restricted to the amount as stands worked out on the basis of the Peak credit theory. We have given a thoughtful consideration to the facts of the present case, and as observed by us hereinabove, not being inspired with the explanation of the assessee as regards the source of the credits in the respective bank accounts, had thus rejected the same. However, we find force in the contention of the ld. A.R that even if the explanation as regards the source of cash deposits does not merit acceptance, still the addition in the hands of the assessee was liable to be restricted by te ..... X X X X Extracts X X X X X X X X Extracts X X X X
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