Lender-wise peak credit computation sustained where seized diaries showed money-lending entries and section 68 burden was not discharged.

Seized diaries recording money-lending entries chronologically were treated as books of account, and on those facts peak credit could be computed lender-wise rather than by merging all lenders together. A post-search disclosure of undisclosed income did not displace the seized material because the return did not reflect that disclosure and no effective retraction was shown. Since the assessee relied on a brokerage explanation and failed to prove the identity, creditworthiness and genuineness of the credits, the burden under section 68 remained undischarged and the unexplained amounts were assessable.

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Issues: Whether the peak of the alleged unaccounted advances was to be computed lender-wise or by merging all lenders together, and whether the assessee's later stand could displace the disclosure and seized material.

Analysis: Seized diaries were treated as books of account and the entries were found to record money-lending transactions in chronological order. The assessee had made a post-search disclosure of undisclosed income, but the return did not reflect that disclosure and no effective retraction was shown. On the facts, the assessee's case was not that he was himself a lender; rather, the names of lenders were available in the diaries and the assessee claimed brokerage. In such circumstances, the computation of peak credit could legitimately be made lender-wise. The statutory burden under section 68 remained on the assessee to establish identity, creditworthiness, and genuineness of the credits, which was not discharged.

Conclusion: The lender-wise peak computation was upheld and the additions made by the Assessing Officer were sustained.

Final Conclusion: The Revenue succeeded and the additions based on lender-wise peak credit computation were restored.

Ratio Decidendi: Where seized records evidence money-lending transactions and the assessee fails to rebut a post-search disclosure or prove the genuineness of the credits, the peak credit can be computed lender-wise and the unexplained amounts are assessable under section 68.

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