TMI Blog2011 (9) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... s against respective orders of the ld. CIT(A)- Central, Jaipur dated 01-09-2010 for the assessment years 2006-07, 2007-08 2008-09. The grounds of appeal for all the assessment years are similar except one ground of appeal which has been raised for the assessment year 2007-08 and 2008-09. 2.1 We are reproducing the grounds of appeal for the assessment year 2007-08. 1. Whether on the facts and circumstances of the case, the ld. CIT(A) has erred in law and on facts in reducing the peak amount of advances made by the assessee to ₹ 15,19,92,500/- for the assessment year 2006-07, 2007-08 and 2008-09 as against ₹ 25,64,35,000/- calculated by the AO. 2. Whether on the facts and circumstances of the case, the ld. CIT(A) has erred in law and on facts in reducing the unaccounted advances made by the assessee to ₹ 27,64,000/- as against ₹ 17,43,95,000/- calculated by the AO. 3. Whether on the facts and circumstances of the case, the ld. CIT(A) has erred in law and on facts in holding that the AO s method of treating each contended lender separately and then grossing up the amount of peak unaccounted advance was not correct. 4. Whether on the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reproduced as under:- A.Y. Net Income Head of income offered Others 2002-03 8,00,000/- Investment in advances (hundies) Income offered on account of asset/ expenditure approach and UDI gets automatically taxed when the asset found in search have been offered to tax 2004-05 2,05,000/- Investment in advances (hundies) 2007-08 26,00,000 Investment in advances (hundies) 2008-09 1,95,000 Cash house hold items/ expenses others 2.6 The AO has reproduced the reply of the assessee in Answer to Question No. 14 in the statement recorded u/s 132(4) on 29-06-07. The assessee admitted that Annexure A-1 A-2 give the details of the amounts advanced to different persons and such amounts have been advanced after getting the loans from other parties. The entries are of indicative nature. In case, he is able to give the names and complete address of the persons from whose behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as confronted to the assessee and the assessee filed the reply vide letter dated 24-12-09. The submissions given by the assessee in his letter are as under:- 1. The assessee in his statement has admitted that he is broker and seized documents also suggest that he has arranged money between the borrowers and lenders. The assessee has been searched and no asset of any worth was found. The assessee is aged of 70 years and is having no other source of income. In case the demand is raised by virtue of the addition then the same should be recovered from the parties in respect of whom the addition is being made in the case of the assessee. 2. The transactions entered in the Annexure A-3 and A-4 are mentioned on the due date and the dates mentioned is not real date of transaction. The money being lent for fixed period and the date on which money is receivable is mentioned in the transaction. The transactions if renewed then it is again recorded on the due date. 3. The total transaction comes to ₹ 1,04,69,77,000/- and the assessee has earned brokerage of 0.10% which means that the brokerage income will be ₹ 10,46,977/-. 4. The transactions which have not been renewe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts have been lent by the assessee and the peak should be worked out accordingly. If that working is done then the peak amount will be of ₹ 15,19,92,500/-. 2.11 The working as worked out by the ld. AR was forwarded to the AO to furnish his comments. The AO in his report has stated that the working of the peak is correct in case all the lenders are merged. However, the AO stated that the peak should be worked out on the basis of each lender. 2.12 The ld. CIT(A) has recorded the findings that the AO was justified in holding that the assessee is advancing the money out of his unaccounted income. The ld. CIT(A) agreed with alternative arguments of the ld. AR that when the AO has presumed that the assessee could lender of money lender then there is no requirement to make working of the peak monthwise. On the basis of such working of the peak, the ld. CIT(A) held that the amount which is required to be added for three assessment years will be as under:- Peak of the transactions relating to assessment year 2006-07 is to be considered as undisclosed income ₹ 13,91,51,000/- Peak of the transactions relating to asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hambu and Sons Vs. CIT (1996) 219 ITR 235 observed at page 241 as under: The Authorized Officer had the power to record statements on oath on all matters pertaining to the suppressed income. The statement cannot be confined only to the books of accounts. If a partner of the firm came forward to disclose about non-entry of the excess stock in the registers during the course of search, there is no reason why the Income-tax Officer shall not make use of it even though there is no actual verification of the stock. In Rameshchandra and Company Vs. CIT, (1987) 168 ITR 375, the T Bombay High Court observed that where an assessee has made a statement of facts, he can have no grievance of the taxing authority, taxes him in accordance with that statement. We are also aware of the observation made by Income-tax Appellate Tribunal, Ahemdabad Bench in the case of Asstt. CIT Vs. Shiladevi S. Agarwal (1994) 50 ITD 524, the learned Bench observed (head note): All that is stated by any deponent on the search day should not be taken as the truth, the whole truth and nothing but the truth. Such statements indubitably have evidentiary value and creditability in law, but the same sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in Section 115 of the Evidence Act is that justice prevails over truth. In case before the Mumbai Bench, excess stock as found recorded on paper was neither found nor attempts were made to find after the declaration was made. 21.6 The next issue before us as to whether the peak should be taken lenderwise or it should be taken by merging of the lenders altogether by holding that the payment have been made by the assessee. The Hon'ble Jurisdictional High Court in the case of Swaroop Chad Kojuram Vs. CIT, 235 ITR 732 had an occasion to consider the issue as to whether the addition made by following the peak credit theory is a question of law. In that case, the credit on peak theory amounting to ₹ 1,42,846/- after considering the debits. The AO made the addition of ₹ 3.58 lacs on the basis of the credits without deducting the debits. Before the Hon'ble Jurisdictional High Court , it was submitted by the ld. Counsel for the assessee that a refinement or extension of the peak theory occurs where the credits appear not in the same account but in the accounts of different persons. If the genuineness of all the persons is disbelieved and all the credits a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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