2018 (10) TMI 916

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....d his return of income for the year under consideration declaring total income of Rs. 2,05,210/-. During the course of assessment proceedings, the Assessing Officer noticed from the AIR information that the assessee has deposited cash aggregating to Rs. 212.24 lakhs into his savings bank accounts maintained with ICICI Bank. The Assessing Officer called for explanation from the assessee in respect of the cash deposited into his bank account. The assessee submitted that he is dealing in mobile accessories, leather goods etc. on commission basis. He submitted that all document relating to his business activities were destroyed in November 2011 in the fire that broke down at Sahara market, where his shop was located. He submitted that he was ge....

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....ssee could not bring any document to support his explanations. He further submitted that the Assessing Officer, in the alternative, should have assessed peak amount of cash credit instead of assessing entire deposits, since there is continuous transaction of deposits and withdrawals. He further submitted that the peak credit concept has been approved by Hon'ble Andhra Pradesh High Court in the case of CIT Vs. Purushottam Jhawar (2013) 40 taxamnn.com 533 (AP) and also by Hon'ble Allahabad High Court in the case of CIT Vs. Fertilizer Traders (2014) 42 taxmnn.com 476 (All). 5. The Learned DR, on the contrary, strongly supported the order passed by the learned CIT(A). The Learned DR submitted that the assessee has not substantiated his....

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.... would show that cash deposits are made not only from Mumbai but also from various other places including farway places like Dindigul located in Tamil Nadu, Thiru and Palghat located in Kerala etc. The deposits so made from faraway places, in a way, support the explanation of the assessee that the same represents sale proceeds. Hence, in our view, the above said explanations cannot be brushed aside altogether. The learned CIT(A) has observed that the assessee has not given any cogent reason for making deposits and thereafter withdrawing the same. It is possible that the customers of the assessee have made deposits into the bank account. We have noticed that there has been deposits of cash and withdrawal of cash on every day. Further, the de....

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....nsibility placed on him u/s 68 of the Act and hence the tax authorities are justified in assessing the entire deposits as income of the assessee. Even though the provisions of sec.68 places initial onus on the shoulders of the assessee, yet the said section gives a discretion to the AO not to assess the entire cash credits as income of the assessee, as held by Hon'ble Supreme Court in the case of P.K.Noorjahan (237 ITR 570). Hence the facts and circumstances of the case play an important role in application of provisions of sec.68 of the Act. In the instant case, we have noticed that there are multiple deposits and multiple withdrawals on a single day. Hence assessing the deposits alone, without considering the withdrawals and also contenti....