TaxTMI 
TaxTMI 
2013 (12) TMI 123
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....sessing Officer has erred in not considering the fact that appellant is sub-broker and trading in commodities on behalf of his/her clients and return showing income from above said sources has been filed and assessed by the Assessing Officer and thus, there is no justification in assessing the same under Section 68 of the Act. 4. That the learned CIT(A) has erred in not considering that once the learned Assessing Officer has accepted and assessed the Appellant's source of income as sub-broker/dealer in commodities, he is not justified to assess the cash deposits in banks as appellant's income twice. 5. That notwithstanding the above said ground of appeal, the learned CIT(A) has erred to consider that the Assessing Officer has failed to take the notice of the statement of the Sudhir Kumar Sharma (Karta) as recorded during the course of survey conducted at the business premises of the assessee on 31.10.2007, wherein he had categorically stated that we are engaged only in giving the accommodation entries to various persons and at best only commission to the tune of 0.05% should have been assessed against the addition of all the deposits in the bank acco....
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....ub-broker/dealer in commodities, he is not justified to assess the cash deposits in banks as appellant's income twice. 4. That notwithstanding the above said ground of appeal, the learned CIT(A) has erred to consider that the Assessing Officer has failed to take the notice of the statement of the Sudhir Kumar Sharma (Karta) as recorded during the course of survey conducted at the business premises of the assessee on 31.10.2007, wherein he had categorically stated that we are engaged only in giving the accommodation entries to various persons and at best only commission to the tune of 0.05% should have been assessed against the addition of all the deposits in the bank account of the assessee. 5. That the learned CIT(A) has erred to consider that the Assessing Officer has failed to take the notice of the fact that the assessee does not have any immovable/movable property and no worthwhile sources to enable him to deposit the huge cash in his bank account. 6. That the learned CIT(A) has erred to consider that the Assessing Officer has failed to take the notice of the Judgment of juris dictional Bench of the Income Tax Appellate Tribunal ....
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....w of the provisions of section 68 of the Act. 7. We find that identical issue in respect of cash deposits in the bank account of the assessee arose before the Tribunal in bunch of appeals with lead order in ITA No. 713/Chd/2010 relating to assessment year 2007-08 in the case of Shri Sudhir Kumar Sharma and also in the case of the assessee relating to assessment year 2007-08 in ITA Nos. 712/Chd/2010 in the appeal filed by the assessee and in ITA No. 962/Chd/2010 in the appeal filed by the revenue against the assessee. The Tribunal vide order dated 27.06.2003 after deliberating upon the issue vide paras 16 to 28 held as under : 16. We have heard the rival contentions and perused the record. In the facts of the present case the assessee under appeal is for assessment year 2007-08 for the period ending 31.3.2007. The assessee during the year under consideration had furnished return of income declaring total income of Rs. 161,680/- filed on 01.11.2007. Survey u/s 133A of the Act was conducted on the premises of the assessee on 31.10.2007 and the statement of the assessee was recorded on 31.10.2007. The copy of the statement of the assessee recorded during the course o....
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.... transaction were being maintained by the assessee, which would be provided on the next date of hearing. The statements wwas again continued on 21.12.2009 and the plea of the assessee was that it had not brought any record or any persons to be produced alongwith himself on the said date of hearing, as he had come for recording of his statement. In the statement so recorded, in respect of various cash credits/deposits in the bank accounts in the name of different companies in which he was the Director/Proprietor, the assessee was asked to give the source of the said cash deposits in various banks and it was stated by the assessee that "Reply is same as stated on 15.12.2009". He further submitted that he would state further relating to cash during the course of assessment proceedings. 18. The Assessing Officer from the perusal of the bank accounts of the assessee worked out the cash credits in the said bank accounts totaling to Rs. 126,66,000/- as per details in annexure-B to the assessment order. The Assessing Officer further noted that while recording the statement, the assessee was asked to produce 10 persons for verification and the assessee failed to produce any ....
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....ted u/s 133A of the Act on 31.10.2007, in the statement recorded, the assessee admitted to be engaged in the business of giving accommodation entries. The modus-operandi explained during the course of survey was that the assessee was receiving the amount in cash and the same were being returned vide cheques through bank accounts. However, during the course of assessment proceedings, the statement of the assessee was again recorded wherein when confronted with the bank statement of M/s Big Bull Commodities Pvt. Ltd. with Centurian Bank, Pakhowal Road, Ludhiana in which huge cash was deposited by various entries, the assessee in reply stated that the cash was deposited as per books of account on behalf of the clients. Vide query No.8, the assessee was asked to provide the names and addresses of the customers/clients who had deposited these amounts. The reply of the assessee in this regard was, "If details are there, I will check from books of account and provide the same. " The assessee, thereafter was directed to produce atleast 10 persons who had deposited Rs.1 lac and above in the bank account. The assessee explained that he will verify from record and let the Assessing Officer kn....
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....12.2009." 22. A bare perusal of the statement recorded during the course of assessment proceedings reflect that the claim of the assessee to have changed. The assessee admits that only M/s Shubh Krishna was registered with Ludhiana Commodities Exchange and rest all the concerns were the branches or traders of M/s Shubh Krishna Commodities. In respect of the cash deposit in the bank account of one of the concern, the assessee stated that it had received cash from various parties and the same was as per the books of account. The case of the assessee was that it was receiving cash from its clients. But before the Assessing Officer it was not the case of the assessee that it was engaged in providing accommodation entries. In respect of the entries not being through the exchange, the assessee claimed that client to client transactions were permissible as commercial transactions. The statement was continued on 21.12.2009 and as per query No.24, there was a specific query raised to explain various cash credits/deposits in the bank accounts of different companies in which the assessee was the Director and the assessee was also asked to give source of cash deposits in variou....
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....he same, then such credits may be charged to tax as income of the assessee for that particular previous year. Admittedly, in the case of the assessee, various amounts in cash are deposited in the bank accounts of the assessee and the onus was upon the assessee to explain nature and also the source of the said cash deposits. The assertion of the assessee in this regard was that it was the amount received from clients. However, the assessee failed to give the list of such persons who had advanced the said cash to the assessee. The assessee even failed to bring on record any evidence to prove its stand that it was the amount received from such persons who were his clients. The assessee failed to file any confirmation in respect of the said cash credits nor any of the persons were produced for examination before the Assessing Officer, though specific direction in this regard was given by the Assessing Officer within the course of recording of statement of the assessee, during assessment proceedings. The assessee even failed to produce the books of account. In the absence of the assessee having discharged his onus of proving the identity, credit worthiness and genuineness of the cash tr....
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....order of CIT(Appeals) in this regard. 27. The reliance placed upon by the assessee on various case laws has been referred to and commented upon by the CIT(Appeals) and we are in conformity with the findings of CIT(Appeals) in this regard. 28. The next issue raised in the present appeals is in relation to the applicability of peak credit theory. In the facts of the present case, the said peak credit theory is not applicable as the assessee had deposited cash in the bank account and thereafter, cheques were issued to different parties. It is not a case where cash was deposited on different dates and in between, there were cash withdrawals from the bank account. It is a case where there are deposits in cash but as against the said cash deposited, various cheques were issued and the assessee was unable to explain the source of cash deposited in his bank account. Rejecting the theory of peak credits applied by the Assessing Officer, we reverse the findings of CIT(Appeals) in this regard and restore the addition made by the Assessing Officer at Rs. 1,26,66,000/-. We find support from the ratio laid down by the Hon'ble Allahabad High Court in Bhaiya Lal Shy....
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....understand as to how the assessee can put forward the claim that separate additions for the unexplained cash credit in different accounts should not be made. When the assessee himself does not contend that the deposit made in the account of 'B' is out of prior withdrawal made in the account of 'A', how does the assessee expect the Department to subscribe to this point of view. We hence reject this contention of the assessee." Heard Sri Krishna Agrawal, learned counsel for the applicant and Sri Shambhu Chopra learned standing counsel for the Revenue. The applicant submitted that as the amount of cash credit has been treated to tax by invoking the provisions of section 68 of the Act and the said amount have been treated as income from the unexplained source, the applicant was entitled to take up a plea of addition of the aforesaid peak credit as the entire deposits have been treated to be income of the applicant. The contention is wholly misconceived. 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 the question of peak ....