TaxTMI 
TaxTMI 
2016 (8) TMI 358
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....radictory finding by holding at page 9 of his order that a. Assessee's transactions represent sale consideration of undisclosed business transactions in subject bank a/c and then not applying provisions of section 44AF (5% profit rate) to total turnover where disclosed/accepted turnover and undisclosed turnover from subject bank a/c is Rs. 35,43,434/- (well below specified cap of Rs. 40,00,000); b. And instead erroneously computing income at Rs. 714,738 on basis of perverse findings at page 10(Para 6.4) (by this addition which can be sustained is Rs. 14,071/-) 2. That on the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in holding at page 9 para 6.3 that cited precedents do not match assesse....
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....ds stated herein above, either before or at the time of hearing of this appeal." 2. The facts in brief of the case are that the assessee, an individual, was the proprietor of M/s Laxmi Bearing during the relevant period of time and filed return of income for the year under consideration on 18/03/2010 declaring income of Rs. 1,48,517/-. The case of the assessee was selected for scrutiny. In the case of assessee, an information of deposit of Rs. 21,25,620/- in bank account with IDBI bank, New Delhi was received from the Annual Information Return (AIR) and in the course of scrutiny proceedings, the assessee was asked to explain the source of the said deposits. The assessee explained that the deposits represent trading receipt of business of....
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....2,36,587/-, should only be added as unexplained cash credit under section 68 of the Act and not the entire deposits of Rs. 21,25,620/-. In support of his contention, the Ld. AR relied on the decision of the Tribunal Delhi bench in the case of Rajeev Khurana in ITA No. 2906/Del/2013 pronounced on 27/03/2015 and judgement of the Hon'ble High Court of Delhi in the case of Commissioner of income tax versus Inderpal Chawla in ITA 1424/2010 pronounced on 24/09/2010. 6. In reply to the above, the Ld. Senior Departmental Representative (SR DR) relying on the orders of the authorities below submitted that the peak theory was not applicable to the facts of the case as the assessee himself has accepted the deposits as trading receipts, which were d....
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.... is established that the outgoings are being brought in back to make re-deposit in the bank. Where the cycle of deposits and withdrawals are not questionable, only the peak credit in the bank account is assessable as income has been held in the above mentioned cases relied upon by the. Ld. Counsel. However, it is not a case here because no prudent business man will make withdrawals in cash in Delhi and send it to far places across India to redeposit it in piecemeal in the bank account. Further, it is not the claim of the appellant that the withdrawals from the bank account are utilized for re-depositing in bank. Thus, in such a situation, I do not subscribe the theory of the peak credit in the bank account as assessable income. The notable ....
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.... the facts of the case distinguishable from that of the case in hand. The Ld. Commissioner of Income-tax (Appeals) has applied the asset expenditure theory for sustaining the addition. The relevant Paras of the impugned order in this regard are as under: "6.4. I have perused the P & - L account and the balance sheet of the appellant filed before the AO. According to which, the Sales, Closing Stock and Debtors are Rs. 14,17,814/-, Rs. 3,42,000/- and Rs. 1,30,120/- respectively. This fact indicates that the entire sale consideration is not realized within the year and the appellant is bound to have certain stock in trade and debtors in his business. Similarly, the appellant is bound to have stock in trade and debtors in respect of his undi....
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....ained investment of Rs. 7,07,813/- in closing stock & debtors in the undisclosed/unaccounted business and increase of Rs. 6,925/- (balance of Rs. 60,985/- as on 31.03.2009 minus Rs. 54,060/- balance as on 01.04.2008) in the bank balance of IDBI bank account, which works out to Rs. 7,14,738/- is the income of the appellant on asset-expenditure basis. Alternatively, following the Gross Profit (GP) rate as per the books of account of the appellant, the gross profit on admitted undisclosed sales of Rs. 21,25,620/- is worked out to Rs. 3,53,269/-, which is income on accrual/receipt basis. Since the income of the appellant worked out assetexpenditure basis is higher than the income on accrual/receipt basis, therefore, I am of the considered view ....