ITAT directs taxing only peak credit amount, accepting Assessee's explanation.

The ITAT allowed the Assessee's appeal, directing the Assessing Officer to tax only the peak credit amount of Rs. 19,93,800/- deposited in bank accounts, remanding the issue for reevaluation based on receipts and payments statements. The Assessee's explanation for the deposits was accepted, with the ITAT finding no evidence of unexplained investments or business activities. The decision favored the Assessee for statistical purposes, providing an opportunity to clarify the source of the deposits for tax assessment.

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Issues:
Taxability of deposits in bank accounts - whether to consider the peak amount or individual deposits for taxation.

Analysis:
The appeal was filed by the Assessee against the order of CIT(A)-2, Hyderabad regarding the taxability of an amount of Rs. 1,03,28,500/- deposited in bank accounts during the year. The Assessee argued that only the peak amount should be considered taxable, not each individual deposit due to withdrawals made as well.

The Assessee, a Vice President of a company, had income from various sources and filed a return of Rs. 7,20,241/-. However, the assessment determined taxable income at Rs. 2,47,61,970/-, including the disputed deposits in Axis Bank and Andhra Bank. The Assessee failed to explain the source of these deposits, leading to the entire amount being taxed by the Assessing Officer.

Before the CIT(A), the Assessee provided additional details, including receipts and payments statements, and requested acceptance of the explanation. The CIT(A) rejected the Assessee's contentions, stating that there was no nexus between the withdrawals and deposits. The CIT(A) upheld the addition of Rs. 1,03,28,500/-, dismissing the Assessee's appeal.

In the subsequent appeal, the Assessee raised multiple grounds challenging the CIT(A)'s decision. The Assessee argued that only the peak credit should be taxed, not the aggregate deposits. The Assessee referred to the peak credit amount of Rs. 19,93,800/- and requested its confirmation.

After considering the arguments and case laws presented by both parties, the ITAT decided that the Assessee's request to tax only the peak credits was acceptable. The ITAT found that the Assessee had provided some sources for the cash deposits and withdrawals, and there was no evidence of unexplained investments or business activities. Therefore, the issue was remanded back to the Assessing Officer to examine the peak credit based on the receipts and payments statements. The ITAT allowed the Assessee's appeal for statistical purposes.

In conclusion, the ITAT directed the Assessing Officer to reevaluate the taxability of the deposits, considering only the peak credit amount and giving the Assessee an opportunity to provide necessary details for assessment. The appeal was allowed in favor of the Assessee for statistical purposes.

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