TaxTMI 
TaxTMI 
2015 (11) TMI 1601
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 3. Without prejudice to the above it be directed to restrict the addition to the peak credit of all the undisclosed bank balances taken together or any other such sums which the Ld. Tribunal may consider appropriate." 3. Briefly stated facts are that as per AIR information received from revenue/department that the assessee has deposited total cash of Rs. 83,48,16,130/- in the six Axis Bank Accounts maintained with 2/1A, Lansdown tower, Sarat Bose Road, Kolkata-20 during the FY 2008-09 relevant to this AY 2009-10.The AO during the course of assessment proceedings required the assessee to prove the source of such huge cash deposits and in response, assessee filed a voluntary disclosure petition dated 01.11.2011 wherein he worked out the peak of Rs. 1,01,40,000/- on the basis of his deposits in the following six bank accounts: "(i) 411010100011307, (ii) 411010100011316, (iii) 411010100011325, (iv) 411010100014535, (v) 411010100015792 and (vi) 411010100015899" The AO made addition on account of unexplained cash credit/unexplained investment in bank deposits at Rs. 83,48,16,130/- by observing in para 6 and 7 as under: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Add: Salary from P.S. Textiles Rs. 49,800/- Add: Unexplained Cash Credit/ Rs. 83,48,16,130/- Unexplained Investments in Bank Deposits as discussed above. Total Income Rs. 83,50,14,038/- 4. Aggrieved, assessee prescribed appeal before CIT(A), who also confirmed the action of AO by observing in para 5 as under: "5. The Ground No.2 & 3 of the appeal are raised against the addition of Rs. 83,48,16,130/-made by the Asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unt of unexplained deposits. As to the assessee's submission that only peak deposits appearing in the bank account should be added, I am of the considered view that the Assessing Officer has given cogent reasons as to why the assessee's submission is not acceptable." Finally, the CIT(A) also rejected the peak credit theory of the assessee and confirmed the addition as made by AO of Rs. 83,48,16,130/-. Aggrieved, now assessee is in second appeal before us. 5. We have heard rival submissions and gone through facts and circumstances of the case. We find from the facts of the case that the assessee has deposited cash amounting to Rs. 83,48,16,130/- in six undisclosed bank account maintained with Axis Bank Ltd. The assessee before AO filed working of peak credit in relation to cash deposits made in these six bank accounts and requested the AO to assess the peak credit amounting to Rs. 1,01,40,000/-. The assessee claimed to have computed the peak credit of these six bank accounts taking all the deposits and withdrawals. The AO while framing assessment treated the unexplained cash credit/unexplained investment in bank i.e. cash deposits made in these six bank accounts and ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e is merely an accommodation entry provider and nothing else. 6. In view of the above facts and circumstances, the Ld. Counsel for the assessee relied on the decision of Coordinate bench in the case of ITO vs. Shri Piyush Poddar in ITA No. 1050/Kol/2011 for AY 2006-07 dated 07.09.2015, wherein exactly on similar circumstances, the Tribunal has directed the AO to assess the peak credit and by observing held as under: "10. We have heard the rival submissions and perused the materials available on record. It is seen that the assessee apart from his regular income had a bank account with Central Bank of India which was used by him only for the limited purpose of providing accommodation entries to various parties. Initially the assessee took a stand that he was deriving finance commission @.25% of all the transactions in the accommodation entry business and offered the same to tax., However, he shifted his stand by accepting the peak credit theory before the ld. CIT(A). This is evident from the fact that he had not preferred further appeal before the Tribunal against the ld. CIT(A)'s order. In accordance with the directions of the Hon'ble Calcutta High Court, we had examined....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s made by the assessee from the said bank account having utilized for making any other investments outside the books or meant for any other purpose other than for accommodation entry business. It is pertinent to look into the decision rendered by the Kolkata Tribunal in the case of Mahesh Kumar Gupta in IT(SS)A. No.11/Kol/2014 dated 0.2.2005 wherein ITAT observed that the claim of the assessee was that the cheque withdrawals were for giving loan for the short period. Held as follows :- "The AO cannot refuse to grant set off for the withdrawal made by cheque without bringing on record any materials so that the amount withdrawn by cheque cannot have been received back by the assessee and utilized by him in making subsequent deposits by cheque. Taking all this into consideration, we are of the considered opinion that AO should adopt peak credit method to arrive at the undisclosed income of the assessee in the undisclosed bank account No.SB 6664 with the Syndicate bank." Reference may also be drawn to the decision of the Hon'ble Apex Court in the case of CIT vs Smt. P.K. Noorjehan reported in 237 ITR 570(SC) wherein their lordships have held that mere unsatisfactoriness of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h is at Rs. 1,87,247/- and before CIT(A). We are of the view that the CIT(A) has rightly directed the AO to restrict the addition to the extent of peak amount and we confirm the same. This issue of revenue's appeal is dismissed." 13. However, we would like to make it clear that this direction to the ld. AO to assess the peak credit in this case should not be construed as a conclusive proof in the hands of the beneficiary in the said bank account for explaining their amounts. Accordingly, this issue is set aside to the file of the ld. AO to complete the assessment in accordance with the directions mentioned hereinabove." 7. In view of the above facts and circumstances, we direct the AO to assess the peak credit being a sum of Rs. 1,01,40,000/- as computed by assessee on the basis of deposits made in these six bank accounts with Axis Bank Ltd. in lieu of cash deposits added by the AO at Rs. 83,48,16,130/-. Accordingly, the AO will verify the peak and will make addition of the peak amount only. Accordingly, this issue of assessee's appeal is partly allowed for statistical purposes. 8. In the result, the appeal of assessee is partly allowed for statistical purposes. 9....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bank accounts you have and in which branches? A. To the best of my knowledge I have only one bank account L.e. A/c. No. 5747 with Vijaya Bank, Nirmal Chandra Street, Kolkata. A person called Shri Rakesh Singh who operates in our market approached me with an offer to sign some bank account opening forms and promised me an annual income of around Rs. 10 lacs for which I will have to give him blank signed cheques as presented by him. I signed the account opening forms and gave him photo copies of my PAN card and my account with Vijaya bank and I do not know as to where he opened an account in my name. However, I used to sign two to three blank cheques at a time and he would pay me Rs. 10,000/- to Rs.15,000/- for the same. Q.5. Kindly confirm whether you have ever heard of a company called, Abhyuday Housing & Construction Pvt. Ltd. A. No. I have never heard such a name. Q.6. Have you ever executed any civil contracts in your entire life time? A. No. Q.7. I am showing you your P & L A/c. for the A.Y. 2009-10 wherein, you have shown a deemed income of 8% as applicable to contractors on the contract payments received from Abhyuday Hous....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... bank, Sarat Bose Road Branch, namely, A/c. No. 11307, 11316, 11325, 14535, 15792 & 15899, the first being in your sole name and all others in joint names with you as the first account holder, you have deposited cash totaling to Rs.83,48,16,130/- during the period Sept, 2008 to March, 2009. All the deposits made in the said accounts have been transferred by you to the account of Maple Advisory Services Pvt. Ltd. The said six accounts have not a single cash withdrawal. In the absence of any withdrawal, kindly state as to where is the question of working any peak deposits at all and why the entire amount of cash deposited should not be treated as your income. A. I do not understand the accounting principles etc. and I am also not aware as to how the petition has been drafted. As already stuted by me, my job was to help open an account in my name to Shri Rakesh Singh and then issue blank cheques to him for which he was to pay me a sum of Rs.10,00,000/- annually. However, after my helping him to open the accounts, he would pay me small sums of Rs. 10 to 15 thousands whenever he used to get certain blank cheques signed by me. Accordingly, I am i....