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TMI Blog2022 (8) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... "1. FOR THAT on the facts, the ld. CIT(A) erred in confirming the determination of income of Rs. 82,93,904/- made by the ITO by applying the G.P. rate of 8% on the entire deposit made by the assessee for Rs. 10,28,10,144/-. The said determination of income was made on the basis of surmises and conjectures and without applying the peak credit theory. The said determination of income is absolutely unwarranted and stands to no reason at all. 2. FOR THAT on the facts both the authorities below erred both in points in law and on facts. 3. FOR THAT the appellant craves leave to take further and/or additional grounds at the time or before hearing of this appeal petition if necessary." Assessment Year 2013-14: "1. FOR THAT on the facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,780/- & Rs. 1,38,640/-. Immediately after it, the Assessing Officer issued notice u/s 143(2) and 142(1) of the I.T. Act, 1961 and directed the assessee to produce the books of accounts and other documents. In response to the said notice, the AR of the assessee appeared and produced the supporting evidences and explained the returns. However, the AO did not satisfied about the correctness and completeness of the audited accounts submitted by the assessee during the course of hearing and he rejected the books of accounts produced by the assessee and assessment was completed by invoking the provisions of section 147/143(3) of the I.T. Act and added amount of Rs. 75,52,033/- & Rs. 17,45,463/- respectively for the assessment year in question. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p all the cash credits in the books of accounts. It was further held: "For adjudicating upon the plea of peak credit the factual foundation has to be laid by the assessee. He has to own all cash credit entries in the 'books of account and only thereafter can the question of peak credit can be raised." 5.7 Therefore, in order to avail the benefit of the 'peak credit', the appellant has to explain all the pertinent facts within his knowledge concerning the credit entries in the accounts. The appellant has to explain with sufficient detail the source of all the deposits in his accounts as well as the corresponding destinations of all payment from the accounts. The appellant should be able to show that the money has been transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. In the result, the appeal is dismissed." Assessment Year 2013-14 "5.5 I have carefully gone through the assessment order, the observations of the A.O. and the contentions and arguments of the appellant. In the case of CIT vs. M/s JRD Stock Brokers Pvt. Ltd. in ITA No. 544/2005, the Hon'ble Delhi High Court pronounced on 12/09/2018 that the peak credit worked out by the assessee was on the basis that the principle of peak credit would apply, notwithstanding the failure of the assessee to explain each of the sources of the deposits and the corresponding destination of the payment without squaring them off, which is not permissible in law. The Hon'ble Delhi High Court held that ITAT cannot proceed merely on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the creditors and that the money paid from the accounts of the appellant has returned to the bank accounts of the creditors. The appellant has to discharge the primary onus of discharge in this regard. The claim of the appellant that the peak credit would apply notwithstanding the fact that the appellant has not explained the source of each of the sources of the deposits and the corresponding destination of the payment without squaring them off is not permissible in law as explained by the Allahabad High Court in the case of Bhaiyalal Shyam Behari vs. CIT (2005) 276 ITR 38 (All.). 5.8 Thus, the question whether only the peak could be added or not is ultimately not one of theory or a question of law, but one of fact in each case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), we note that there is a clear cut findings given by the ld. CIT(A) that the assessee during the course of assessment proceedings as well as appellate proceedings inspite of repeated request he did not produce bills/vouchers relating to sales and purchase, purchase and sales ledger etc. and accordingly, the AO has no other option but to assessed the income of assessee by adopting gross profit of 8% on total deposits of Rs. 4,74,81,969/- & Rs. 2,35,51,338/- and estimated the business income of assessee at Rs. 82,24,812/- and Rs. 18,84,107/- respectively for assessment years in question. As the appellant has completely failed to give any satisfactory reply about the proof of the nature of his business, therefore, AO had no other optio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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