TaxTMI 
TaxTMI 
2020 (2) TMI 1280
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.... by assessee in memo of appeal filed with Income-Tax Appellate Tribunal, Chennai (hereinafter called "the Tribunal") for ay: 2012-13, read as under:- Grounds of appeal for the AY 2012-13: Extract from the Hon. ITO Assessment Order dt. 10.03.2016 for the AY 2012-13 ref-page 2 para 3 During the course of the assessment proceedings the AR was asked to produce sources for cash deposits, conformation for loan, details of interest paid and copy of bank statement. In mean time, copies of bank statement are obtained from the bank on request and the bank statement were examined. The assessee informed during the course of hearing that he could not produce the details for cash deposits as the accountant suddenly left the service. After discussion, the assessee agreed for adopting 'peak credit' method to find out the income on account of cash deposits. Accordingly, peak credit was worked out to Rs. 3,05,500/- is added to the total income of the assessee. Extract from the Hon. CIT(Appeals} Order dt.10.03.2016 for the AY 2012- 13 ref-page 9 para 2 The AO has not examined the source of above cash deposits, moresoever, complete books of accounts....
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....ailable with the assessee. iv) Therefore, source of cash deposit as such could not be substantiated with evidences. v) Therefore, in all fairness in absence of supporting and corroborative evidences considering peak cash credit as unexplained cash in the hands of the assessee appears to be most appropriate and just and proper. vi) Thus the ground of appeal of the assessee that the peak cash credit of Rs. 3,05,500/- shall be deleted in view of the assessee now producing reconstructed P&L account, balance sheet and cash book and bank book is found to be incomplete for want of details of respective ledgers in the assessee books of accounts. vi) Hence I confirm the action of the assessing officer to treat peak cash credit as arrived by the assessing officer during the assessment proceedings for Rs. 3,05,5007- as unexplained cash credit in the hands of the assessee. The grounds of appeal on the issue is accordingly dismissed. 3. Grounds of Appeal: We humbly submit that the Hon. CIT (A)-13 it appears has erred in law and facts as mentioned below: i) With reference to point 2(i) above: a) In the Remand Report in page ....
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....heet and cash book and bank book is found to be incomplete for want of details of respective ledgers in the assessee books of accounts " is incorrect because: a) In the Remand Report the Hon. ITO in page 2 thereof he has stated: * Seen from the cash book and bank book maintained by the assessee for the relevant F. Y. that it shows the cash deposits made into the savings accounts. * Further perusal of the Original books of accounts, the assesse 's version with regard to the damage of books, due to flood appears to be correct. b) Hence, the Hon. CIT(A)-13 statement, "The assessee now production reconstructed....." is incorrect. Cash book, bank book , P&L account, balance sheet, etc., produced were 'Retrieved' damaged books and no1 'Reconstructed.' vii) With reference to point 2(vii) above: "Hence I confirm....................... "Rs. 3,05,500/- as unexplained cash credit in the hands of the assessee" is incorrect because: As explained in earlier paras the source for cash deposits in the bank is clearly explains and hence the Peak Credit addition treating as un explained is incorrect. Prayer: ....
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....his service suddenly, the assessee is not in a position to explain sources of cash deposits which led AO to adopt peak credit method to bring to tax the income which has escaped assessment leading to an addition of Rs. 6,25,500/- being made for ay: 2011-12 to the income of the assessee by AO vide assessment order dated 10.03.2016 passed by AO u/s. 143(3) read with Section 147 of the 1961 Act and similar additions were made by AO in the hands of the assessee to the tune of Rs. 3,05,500/- for ay: 2012-13 , vide separate assessment order dated 10.03.2016 passed by AO u/s 143(3) read with Section 147 of the 1961 Act. 4. Aggrieved by an assessment framed by the AO as aforesaid for ay: 2011-12 and 2012-13 vide separate assessment orders, the assessee filed separate appeal(s) with Ld.CIT(A) for both the assessment years. The assessee filed fresh evidences before learned CIT(A) to substantiate its case but both the appeals were dismissed by the Ld.CIT(A) vide separate appellate orders both dated 11.07.2017 passed by learned CIT(A). Thereafter, the assessee filed rectification petition u/s.154 of the Act before Ld.CIT(A) on 18.09.2017 for both the ay's stating that appeal of the asses....
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.... The Commissioner Of Income-Tax (Appeals)-13, 121, Mahatma Gandhi Road, Chennai-600 034. Respected Sir, Sub: Remand Report in the case of Shri. K. Gurumuthy-PAN: AAIPG7393J - AY: 2011-12 - reg. Ref: Remand report under rule 46A of Income Tax Rules 1962 letter Dated 13.06.2018 from the O/o CIT(A)-13 in ITA No. 146/AY 2011-12/RR/CIT(A)-13. ***** Kind reference is solicited to the above. At the outset, I hereby tender my sincere apology, for not submitting Remand Report, as per the direction of the learned CIT (A), at first instance. The revised remand report is submitted as under: During the course of remand report proceedings the assessee along with authorized representative appeared before the undersigned. It was submitted by the assessee that due to heavy rain during the month of November and December 2015 the records of the assessee were damaged & due to this books of accounts could not be produced during the course of assessment proceedings. Further the assessee produced, retrieved original books of accounts for verification. Perusal of the books of accounts, the assessee's version regarding ....
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....tion of peak credit of Rs. 6,25,500/- for the year under consideration. The appellant requested not to invoke any future penalty proceedings since non submission of books of accounts was due to natural event which is act of God and beyond the control of bonafide appellant. The appellant's above submissions has been carefully considered. The additional submission of cash book as new evidence submitted during the course of appeal proceedings, which originally could not be submitted before the Assessing Officer was remanded to the AO and was asked to submit a remand report after considering the new evidence by giving an opportunity of being heard to the appellant. The AO after considering the additional evidence submitted the Remand Report the same is reproduced here under: "During the course of remand report proceedings the assessee along with authorized representative appeared before the undersigned. It was submitted by the assessee that due to heavy rain during the month of November and December 2015 the records of the assessee were damaged & due to this books of accounts could not be produced during the course of assessment proceedings. Further the assessee p....
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....s. The assessee has re-constituted cash books based on withdrawal and deposits from the bank accounts. But has not explained the source from where the cash has been generated which was then deposited into a bank account. Thus, even during the remand report proceedings, the assessee has failed to explain the source of cash deposit made in the bank account with Indian Overseas Bank for Rs. 49,69,427/- as evident from Indian Overseas Bank Book constructed by the assessee as his books of accounts under: Apr-10 261588 May-10 44720 Jun-10 314220 Jul-10 501720 Aug-10 203904 Sep-10 1050078 Oct-10 107450 Nov-10 72079 Dec-10 202785 Jan-11 43100 Feb-11 1150283 Mar-11 1049000 49,69,427 The AO has not examined the source of above cash deposits, moresoever, complete books of accounts, evidences, various ledger accounts like loan accounts, jewel loan account, commission account, interest accounts could not be furnished before the appeal authority, as the facts remains that the same are not available with the assessee. Therefore, source of cash deposit as such could not be substantiated ....
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.... and perused the material on record. We have observed that assessee is Senior Citizen and has claimed himself to be a freedom fighter and running an IOC Agency during the year. The assessee filed his return of income originally with AO for AY 2011-12, but no return of income was originally filed for ay: 2012-13. The case of the assessee was reopened by Revenue by invoking provisions of Section 147/148 of the 1961 Act for both the ay's: 2011-12 and 2012- 13. The said reopening of concluded assessment was done by AO for both the ay's within four years from the end of assessment year . We have observed that assessee could not produce books of accounts and other documents/records during assessment proceedings owing to floods/rains in Chennai in December 2015 as it was claimed that records/documents were damaged in rains/floods. The assessment was completed in March 2016 by AO for aforesaid ay's. The said factum of damage to records in floods/rains in Chennai was later proved to be correct as accepted by AO in remand report. The assessee during appellate proceedings conducted by learned CIT(A) filed reconstructed records including cash books , bank book etc but learned CIT(A) dismiss....