TMI Blog2014 (11) TMI 1195X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was entitled to the benefit of peak credit which ought to have been allowed instead of making separate addition of entire amount. However, we may observe that the Assessing Officer has to come to a definite finding that the amount withdrawn was used by the assessee in any other expenditure or investment. If the Assessing Officer comes to a finding that withdrawn amount was used or spent by the assessee for any other investment or expenditure than the benefit of peak of such credit, in such circumstances, may not be available. - Decided in favour of assessee. Addition u/s 69 - all unexplained expenditure has to be added to the income of the assessee for such financial year - HELD THAT:- As assessee does not press the question quo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;) had noticed that certain goods purchased by the assessee from M/s. Suraj Medical Stores were accounted for in cash book on later dates than the date of bills. The AO further found that in the books of M/s. Suraj Medical Stores, the credit for cash received was on the same date when the bill was issued but in the books of the assessee, the payment was shown on a later date and on further verification, the AO found 31 such bills wherein this discrepancy was noticed. Noticing this discrepancy, the AO raised a query as to why the addition of ₹ 28,576/- be not made which were the totals of aforesaid purchases. 5. The assessee explained that the purchases from the local seller are accounted when they make payment, as per the prevai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e argument of the assessee was accepted that only peak of these credits should have been taken and directed to the Assessing Officer to add only the peak amount and allowed consequential relief. 8. Dissatisfied with the relief granted by the CIT(A) on account of peak credits addition only, the respondent department carried the matter in appeal before the ITAT which allowed the appeal of the revenue and upheld the addition of ₹ 28,576/- and held that the benefit of peak credit cannot be given to the assessee automatically and that too particularly where the assessee having denied any such investment outside the books of accounts. 9. Counsel for the assessee has contended that the addition of ₹ 28,576/- was unjustified and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reference is required to be answered in favour of the Revenue. 11. We have considered the rival submissions advanced by ld. counsel for the parties and in our view, arguments of ld. counsel for the assessee have force that the items purchased by the assessee were on short interval from M/s. Suraj Medical Stores and upon perusing the chart given in the assessment order it transpires that so called purchases or unaccounted purchases which the Assessing Officer has held are shown to be purchased on 01/04/1983, 08/04/1983, 18/04/1983, 20/04/1983 30/04/1983 and so on and so forth and these are at short intervals therefore, in our view, funds rotated and benefit of peak credit theory can be invoked and entire addition cannot be made. The H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d expenditure incurred or of cash credits regarded 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 experiences 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 preexisting fund of concealed profits or they are reasonably explained by reference to concealed income earned in that very year. In each case the true nature of the cash deficit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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