TMI Blog2022 (7) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... s bank account, if the assessee is able to prove linkage/chain of transaction through banking channel then in respect of those transactions also, following the principle laid down by Hon ble Delhi High Court in aforesaid decision, benefit of peak credit should be granted to the assessee. With the above directions, we remand the matter to the assessing officer for de novo adjudication - assessee is directed to file necessary details in support of its claim of peak credit in respect of other transactions - As a result, grounds no. 4 and 5 raised in assessee s appeal are allowed for statistical purpose. Addition u/s 68 - accommodation entry receipts - HELD THAT:- As in the present case, the assessee has not admitted itself to be an accommodation entry provider and has claimed itself to be an employee working in finance company having income from salary in addition to having the distribution agency and the fact whether any commission income was earned by the assessee is also not on record. Further, even before the lower authorities assessee has not claimed to have earned commission income. Thus, the petition seeking admission of additional ground filed by the assessee is rejected. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(3) r.w.s. 147 of the Act. 2. The brief facts of the case, as emanating from the record, are: The assessee is an individual. For the year under consideration, no return under section 139 of the Act was filed by the assessee. Subsequently, on the basis of information available in ITD system, the case was reopened under section 147 of the Act, after recording reasons for reopening and taking necessary approval under section 151 of the Act. The assessee, despite repeated reminders, did not even filed the return of income in response to notice under section 148 of the Act till the date of passing of the assessment order. As per the information available in ITD system, assessee had deposited cash of Rs. 18,51,435, in his savings bank account maintained with the Cosmos Cooperative Bank. Accordingly, assessee was asked to explain the source of the cash deposit. In response, assessee submitted that he has distribution agencies of Mother Dairy, Garden Chips, Nutralite Butter for Navi Mumbai and Panvel Region in the name of the Rainbow Enterprises. The assessee further submitted that most of the small inventors pay the bill in cash only and accordingly the assessee was depositing that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced the other partner to corroborate the submission. The Assessing Officer vide order dated 29/11/2017, passed under section 143(3) r.w.s. 147 of the Act did not agree with the submissions of the assessee and made addition of Rs. 18,51,435, under section 68 of the Act. Further, the Assessing Officer, upon perusal of computation of income of Rainbow Enterprises, wherein assessee is one of the partners, noticed that the assessee has received remuneration of Rs. 30,081. Accordingly, same was added under the head income from business . 4. In appeal before the learned CIT(A), assessee raised grounds both in respect of the jurisdiction of assessment order passed under section 143(3) r.w.s. 147 of the Act as well as on merits of the case. The CIT(A) vide impugned order dated 25/10/2019 dismissed the ground on jurisdiction on the basis that such a defect comes under the purview of section 292B of the Act. Further, on merits, learned CIT(A), in absence of any sworn statement of assessee s friend and denial of statement of proprietor of Maladeep Construction and also in absence of documentary evidence such as distribution license, copies of bills and invoices, etc. upheld the addition m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee despite various reminders did not file the return of income. Thus, in the peculiar facts of present appeal, the aforesaid findings of learned CIT(A), on the issue of jurisdiction, are upheld. As a result, grounds no. 1 and 2 raised in assessee s appeal are dismissed. 9. On merits, in the present case, assessee claimed to have distribution agencies of Mother Dairy, Garden Chips, Nutralite Butter for Navi Mumbai and Panvel Region in the name of the Rainbow Enterprises. Further, from the information available in ITD system, it was observed by the Assessing Officer that assessee has deposited cash of Rs. 18,51,435 in a saving bank account maintained with The Cosmos Co-operative Bank. During the assessment proceedings, assessee submitted that the most of the small vendors pay their bill in cash only and same was deposited in assessee s bank account and payment was made for purchasing the orders. In respect of large deposits, assessee submitted that the said transaction was not done by him and his childhood friend Mr. Suresh R Jaybhay working in the same bank told him regarding the cash deposit and took cheque for withdrawing the same. During the assessment proceedings, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cash deposited by Maldeep Construction 10/03/2009 4,66,000/ Amount transferred to Maldeep Construction 12/03/2010 4,66,000/ Amount transferred by Maldeep Construction into appellant s account 12/03/2010 4,66,000/ Cash withdrawn and handed over to Maldeep Construction 10. Thus, there is clear contradiction in the statement of the assessee vis- -vis the proprietor of Maladeep Construction, which raises doubt as to assessee s justification regarding these transactions. Further, it is pertinent to note the following transactions, appearing in bank statement of assessee in the Cosmos Co-operative Bank Ltd.: Date Particulars Chq. no. Withdrawals Deposits Balance 10.12.2009 By Cash 3,00,000.00 3,01,234.00 10.12.2009 To C.A. 6071 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued demand draft. The assessee, in his submission before the learned CIT(A), also claimed that the assessee is an employee working in finance company having income from salary in addition to having the distribution agency. During the assessment proceedings, assessee could not justify deposit of business receipts of the partnership firm (i.e. Rainbow Enterprises) in his savings bank account despite the firm also having the account in the same bank. The assessee neither furnished copy of partnership deed nor produced the any statement/affidavit of the other partner to justify such conduct, even before us. 13. During the course of hearing, learned AR sought application of concept of peak credit for making any addition under section 68 of the Act. In this regard, it is relevant to note the following observations of Hon ble Delhi High Court in CIT vs D.K. Garg, [2017] 84 Taxmann.com 257(Delhi): 18. In that case, it was held that as die amount of cash credits stood in the patties of different persons which the Assessee had all along been claiming to be genuine deposits, withdrawal payments different persons during the previous years, the Assessee was, therefore, not entitled to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition that peak credit is not applicable where deposits remain unexplained under Section 68 of the Act. The question of law framed by this Court, is accordingly, answered in the negative i.e. in favour of the Revenue and against the Assessee. The impugned order of ITAT is, accordingly, set aside and the order of the AO is restored to file. 14. In the aforesaid decision, in D.K.Garg (supra), Hon ble Delhi High Court has emphasised that for application of principle of peak credit, the taxpayer should be able to show that the money has been transferred through banking channels from the bank account of creditors to the bank account of the taxpayer and that the money paid from the accounts of the taxpayer has returned to the bank accounts of the creditors. In the present case, as noted above though the assessee has claimed that the cash received from Maladeep Construction and was returned to the same entity through cheque, however, the proprietor of the said concern has given a contradictory statement on oath. As evident from the record, the statement made by the assessee is not supported by any evidence since the assessee could not produce any statement/affidavit of his childhood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Hon ble Supreme Court in NTPC Ltd vs CIT: 229 ITR 338 held that the Tribunal can consider a question of law arising from the facts which are on record in the assessment proceedings. We are of the considered view that the aforesaid additional ground raised by the assessee cannot be admitted, in the present case, as facts for deciding the same are not available on record. It is pertinent to note that the Hon ble jurisdictional High Court in CIT vs Alag Securities Ltd. [2020] 117 Taxmann.com 292 (Bombay) was dealing with the case wherein the taxpayer was admitted to be an accommodation entry provider and first appellate authority has treated 0.15% of the total deposits as income from commission. However, in the present case, the assessee has not admitted itself to be an accommodation entry provider and has claimed itself to be an employee working in finance company having income from salary in addition to having the distribution agency and the fact whether any commission income was earned by the assessee is also not on record. Further, even before the lower authorities assessee has not claimed to have earned commission income. Thus, the petition seeking admission of additional g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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