TaxTMI 
TaxTMI 
2022 (7) TMI 673
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....he order passed under Section 143(3) of the Act since no return has been filed by the Appellant. 3. Because, Ld. CIT(A) erred in law and on facts in confirming addition u/s 28 to the tune of Rs.30,081/- being business receipts of Rain Bow Enterprises. 4. Because, Ld. CIT(A) erred in law and on facts in confirming the addition u./s 68 to the tune of Rs.18.51,435/- when assessee explained that the same are business receipts of Rain Bow Enterprises. 5. Because, Ld. CIT(A) erred in law and on facts in confirming the addition u./s 68 to the tune of Rs.18,51,435/- in the form of cash deposits when the Appellant has duly informed Ld. AO the fact of corresponding withdrawals and therefore in any case only peak can be added in the Appellant case. 6. Because, Ld. CI(A) erred in law and on facts in not adjudicating the initiation of penalty proceedings u/s 271(1)(c) by the Ld. AO in the assessment order passed u/s 143(3) r.w.s. 147 of the Act." 2. The brief facts of the case, as emanating from the record, are: The assessee is an individual. For the year under consideration, no return under section 139 of the Act was filed by the assessee. Subsequently, on the basis of information....
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.... bank account maintained with Cosmos Bank, Vashi Branch on different dates on behalf of Maladeep Construction and the same was returned to Maladeep Construction through cheques, What is your say on this? Ans: Sir, as I said earlier, I do not know Shri Swapnil S. Bobhate, I do not know how he is alleging that cash is deposited and then withdraum on behalf of Maladeep Construction. Money is received from him which was refunded by me." 3. Further, the assessee was asked as to why business receipts of partnership firm Rainbow Enterprises, wherein he is one of the partners, were deposited in his personal savings bank account. In reply, assessee submitted that it was agreed mutually between the partners that part of the business receipts will be deposited in his personal bank account and from there he will issue cheque or DD to the creditors. However, assessee neither filed the partnership deed nor produced the other partner to corroborate the submission. The Assessing Officer vide order dated 29/11/2017, passed under section 143(3) r.w.s. 147 of the Act did not agree with the submissions of the assessee and made addition of Rs. 18,51,435, under section 68 of the Act. Further, the As....
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.... section would not render the assessment invalid. The AO has also mentioned in Para 2.1 and Para 4 of the Assessment Order that the assessee failed to file a return in response to notice u/s. 148 of the Act and has made the assessment accordingly. Further, the above defect very much comes under the purview of section 2928 of the Act. The various case laws relied upon by the assessee have been perused and are found to be irrelevant in the instant case. In this case, the assessment has been completed after proper issuance and service of the statutory notices. Hence, the case laws relied upon by the assessee are distinguishable on the basis of facts. In light of the above, the Grounds nos. 1 and 2 are 'Dismissed'." 8. We find no infirmity in the impugned order passed by the learned CIT(A) on the issue of jurisdiction, as at many places the Assessing Officer has noted the fact that the assessee despite various reminders did not file the return of income. Thus, in the peculiar facts of present appeal, the aforesaid findings of learned CIT(A), on the issue of jurisdiction, are upheld. As a result, grounds no. 1 and 2 raised in assessee's appeal are dismissed. 9. On merits, in t....
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....3,00,000/- Cash Amount received from Maldeep Construction and deposit in Bank 10/12/2009 3,00,000/- Cheque issued to Maldeep Construction 15/12/2009 1,58,782/- Cash deposited by Maldeep Construction for the purpose of payment to CIDCO 15/12/2009 1,58,782/- Amount used by Maldeep Construction 23/12/2009 3,00,000/- Cash deposited by Maldeep Construction 23/12/2009 3,00,000/- Amount transferred to Maldeep Construction 10/03/2009 4,66,000/- Cash deposited by Maldeep Construction 10/03/2009 4,66,000/- Amount transferred to Maldeep Construction 12/03/2010 4,66,000/- Amount transferred by Maldeep Construction into appellant's account 12/03/2010 4,66,000/- Cash withdrawn and handed over to Maldeep Construction 10. Thus, there is clear contradiction in the statement of the assessee vis-à-vis the proprietor of Maladeep Construction, which raises doubt as to assessee's justification regarding these transactions. Further, it is pertinent to note the following transactions, appearing in bank statement of assessee in the Cosmos Co-operative Bank Ltd.: Date Particulars Chq. no. Withdrawals Deposits Balance 10.12.2009 By Cash 3,00,000.00....
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....te the following observations of Hon'ble Delhi High Court in CIT vs D.K. Garg, [2017] 84 Taxmann.com 257(Delhi): "18. In that case, it was held that as die amount of cash credits stood in the patties of different persons which the Assessee had all along been claiming to be genuine deposits, withdrawal payments different persons during the previous years, the Assessee was, therefore, not entitled to claim the benefit of peak credit. Later in Vijay Agricultural Industries case (supra), it was reiterated that "The principle of peak credit is not applicable in case where the deposits remained unexplained under Section 68 of the Act. It cannot apply in a case of different depositors where there has been no transaction of deposits and repayment between a particular depositor and the assessee On the facts of that case it was held dur peak credit could be applied only in the case of squared up accounts. In other words, where an Assessee was unable to explain the sources of deposits and the corresponding payments then he would not get the benefit of 'peak credit'. 19. The legal position in respect of an accommodation entry provider seeking the benefit of peak credit appears to have bee....
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....the assessee has claimed that the cash received from Maladeep Construction and was returned to the same entity through cheque, however, the proprietor of the said concern has given a contradictory statement on oath. As evident from the record, the statement made by the assessee is not supported by any evidence since the assessee could not produce any statement/affidavit of his childhood friend to support his claim. On the other hand, proprietor of Maladeep Construction has made a statement on oath that the money was advanced by the assessee, which was later on returned. We find from the said statement recorded on oath that the proprietor has also mentioned the dates and amounts on which the said money was advanced by the assessee and when the same was returned to assessee by Maladeep Construction. Further, we find that this part of the statement of proprietor of Maladeep Construction also tally with the bank statement of assessee's account. Thus, following the principle for application of peak credit as laid down by Hon'ble Delhi High Court in aforesaid decision, we are of the considered view that the assessee is entitled to benefit of peak credit only in respect of this transactio....