Peak credit addition confined on facts after refusal to remand for past profit-rate adoption.

Peak credit addition was treated as a reasonable basis on the facts, and the Tribunal declined to remand the matter for adoption of a net profit rate based on past years. The assessee had not filed returns or responded during assessment, and the lower authorities had already reduced the addition. Taking the overall facts and circumstances into account, the Tribunal further restricted the addition and confined it to 50% of the peak credit figure, granting partial relief. The appeal had also been entertained after condonation of a 122-day delay on bona fide grounds.

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Issues: Whether the addition sustained on the basis of peak credit should be restricted to a lesser amount, and whether the matter should be remanded for adoption of a net profit rate based on past history.

Analysis: The appeal was admitted after condonation of a 122-day delay on the assessee showing bona fide reasons. On merits, the Tribunal noted that the assessee had not filed any return and had not responded to notices during assessment. The Assessing Officer made an addition by applying peak credit, and the first appellate authority reduced it. The Tribunal declined to remand the matter for application of a net profit rate based on earlier assessment years, observing that the assessment year in question was old and that the peak credit approach adopted below was reasonable on the facts. However, considering the overall facts and circumstances, the Tribunal found it to further restrict the addition.

Conclusion: The addition was confined to 50% of the peak credit figure, resulting in partial relief to the assessee.

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