TaxTMI 
TaxTMI 
2014 (8) TMI 1080
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....n 19.03.2007. On receiving information that assessee was having an undisclosed bank a/c No.CD-1094 maintained with Central Bank of India, N.S.Road, Br., Kolkata since 13-09-2000 the AO had reason to believe that the transactions through the said bank a/c had not been reflected while filing the return of income for this A.Y.2006-07. Thus proceeding u/s 147 was initiated and notice u/s 148 was issued requiring the assessee to file his return of income. In compliance to the said notice the assessee filed the return of income declaring income of Rs. 2,01,263/- incorporating income under the head business & profession to the tune of Rs. 1,56,463. 3.1. The assessee was asked by the A.O. to give the details of his business income, its nature, constitution etc. with trade licence. In response A.R. of the assessee filed a written submission dated Nil on 07-09-09, stating that "the business income of Rs. 1,56,468/- declared in the return of income for A.Y.2006-07, in pursuance of notice u/s 148 refers to "Finance Commission" for accommodation entries provided to the parties. The said commission was received on average @ 0.25% towards to the transactions effected through account no.CD 1094....
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....al Bank of India in which total deposit of Rs. 6,30,89,413/- out of which total cash deposit was Rs. 5,56,69,850/- (as per Annexure A) and total clearing credits was Rs. 74,19,563/- (as per Annexure B) was made during the F.Y. 2005-06. As the assessee was unable to explain and prove the sources of the above deposits the entire deposits of Rs. 6,30,89,413/- is hereby treated as his undisclosed cash credit from his undisclosed source and added to his total income for the F.Y.2005-06." 3.4. For the above conclusion the AO placed reliance on the decision of Hon'ble Madras High Court in the case of M.Sundaram vs Assistant Commissioner of Income Tax 287 ITR 145 (Mad) and the decision of Hon'ble Apex Court in the case of Kale Khan Mohammad Hanif vs CIT 50 ITR 1. 4. Against the above order the assessee went in appeal before the ld. CIT(A). Before the ld. CIT(A) the assessee made a plea that even if cash deposits are considered as belonging to the assessee entire amount cannot be taxed legally as there are regular deposits and withdrawals both by way of cheque and cash and no material has been found during the assessment proceedings that the withdrawal has been used by the assessee fo....
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....de ITA No.1903/Kol/2009 order dated 16.07.2010 iv) ITO vs Shri Pramod T.Jariwala vide ITA No.2425/Ahd/2009 order dated 29.04.20111. v) ITO vs Shri Arun Kumar Tiwari vide ITA No.4294/Del/2010 order dated 10.06.2011. 7. We have heard the rival submissions and carefully perused the records. We find that in this case undisclosed bank account of the assessee was discovered. In the said account AO noted that there were deposits totaling to Rs. 6,30,89,413/-. Assessee initially submitted before the AO that the assessee was engaged in earning finance commission for providing accommodation entries to the parties. The said commission was received on an average of 0.25% towards the transactions. However, no evidence whatsoever to support the above contention was produced before AO. In these circumstances AO placed reliance upon the decision of Hon'ble Apex Court in the case of Kale Khan Mohammad Hanif vs CIT and Hon'ble Madras High Court in the case of M.Sundaram vs ACIT (supra). Now in assessee's appeal before the ld. CIT(A) it was contended that even if assessee's claim of earning finance commission is not accepted the assessee should be taxed on the basis of peak credi....
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....ount as salary and he had not disclosed the true picture of how he came into possession of such a huge amount. Since the assessee failed to prove that the money did not belong to him, the authorities were right in assessing it under section 69A." 7.2. In the case of Kale Khan Mohammad Hanif vs CIT reported in 50 ITR 1. The exposition of the Hon'ble Apex Court is as under :- "It is well established that the onus of proving the source of a sum of money found to have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt form taxation under the provisions of the Income-tax Act. In the absence of such proof, the Income-tax Officer is entitled to treat it as taxable income. A.GOVINDARAJULU MUDALIAR V.COMMISSIONER OF INCOMETAX [1958] 34 ITR 807 (SC) In the original assessments for the assessment years 1045-46 and 1947-48 the assessee's accounts were not found complete and reliable and his income from his two businesses was computed by estimating his total sales and assessing the gross profits on the basis of certain percentages. Certain cash credits in th....
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.... any supporting evidence and despite repeated opportunities given by the AO the assessee failed to substantiate the submissions. He did not disclose from whom the money was received and to whom the same was paid. 7.5. Now before the ld. CIT(A) the assessee claimed that he should be taxed on the basis of peak credit in the account. It was submitted that no evidence has been found by the AO that assessee has utilized the withdrawal from the said account for meeting any expenditure or making any investment. The ld. CIT(A) has accepted the submission. Now we find that this is contradictory to the ratio emanating from the case laws of the Hon'ble Madras High Court and Hon'ble Apex Court cited above. From the case laws referred to above it is clear that where the nature and the source of the receipt cannot be satisfactorily explained by the assessee it is open to the Revenue to hold that it is the income of the assessee and no further burden lies on the Revenue to show that that income was from any particular source. Hence, under these circumstances it is evident that giving various theories of probabilities and giving undue benefit to the assessee is untenable in the light of the abo....