2010 (8) TMI 1050 - AT - Income Tax

Tribunal partly allows appeal, directs production of party for re-adjudication. Peak credit addition upheld.

The Tribunal partly allowed the appeal, directing the assessee to produce the party related to the cash credit for re-adjudication. However, the addition ... - Issues involved: Delay in filing appeal, addition under section 68 of the Income Tax Act, 1961, addition on account of peak credit.Delay in filing appeal: The appeal was filed by the assessee against the order of the Commissioner of Income Tax(Appeals) for the assessment year 2005-06, citing a delay of 19 days due to the sudden illness of the Managing Partner. The delay was condoned based on legal precedents emphasizing that unless malafides are evident, delays should be condoned and matters decided on merits rather than technicalities.Addition under section 68: The Assessing Officer made an addition of Rs. 5,00,000 under section 68 of the Income Tax Act, 1961, as the cash credit was deemed non-genuine. The party providing the cash was not produced, leading to the addition. The Tribunal directed the assessee to produce the party and provide details regarding the nature of the credit, whether it was a loan, and other relevant information for re-adjudication of the addition.Addition on account of peak credit: Another addition of Rs. 4,00,000 was made by the Assessing Officer on account of peak credit, which was confirmed by the Commissioner of Income Tax(Appeals). The peak credit calculation discrepancy was highlighted, with the Assessing Officer not properly reconciling the cash balance. The Tribunal upheld the decision of the authorities, rejecting the appeal on this ground.Conclusion: The Tribunal partly allowed the appeal, directing the assessee to produce the party related to the cash credit for re-adjudication. However, the addition on account of peak credit was upheld based on the detailed discussion and reasoning provided by the Commissioner of Income Tax(Appeals).