TaxTMI 
TaxTMI 
2024 (12) TMI 1379
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....Rs. 26,03,26,145/-. The Revenue has raised the following grounds for the same:- (b) Whether on the facts and circumstances of the case and in law, is it correct on the part of learned CIT(A)-6 to rely on CIT(A)-2 (the first round of appeal) order dated 12.11.2014 in the case of assessee's father Shri V. Gurunathan and to delete the identical addition in the hand of the assessee Shri V.G. Rajendran without appreciating the fact the in the case of the assessee Shri V.G. Rajendran the CIT(A)-12 (the first round of appeal) vide order dated 22.12.2014 has confirmed the identical addition earlier? (c)Whether on the facts and circumstances of the case and in law, is it correct on the part of learned CIT(A)-6 to rely on the CIT(A)-2 order dated 12. 11.2014 in the case of assessee's father Shri V. Gurunathan where it has been held that the deposit through cheque and bank transfer in the undisclosed bank accounts are explained as source of the credit in one undisclosed bank account is corresponding debits in other undisclosed bank accounts, on the contrary, in this case the ultimate inflow/source or out flow/destination is unexplained, bank accounts are undisclosed,....
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....e AO has brought out this fact as follows : Para.2 of Page-3: "As could not correlate all the deposits and drawings routed through the bank account, I am advised to offer additional income related to Peak Credit in several bank accounts as per statement. (No statement found to be attached). Accordingly, a sum of Rs. 20,35,727/- offered for asst year 2005- 06 and on this taxes duly paid. Further requested that since additional Income offered, no separate proceedings to be initiated in respect of Sri V. Gurunathan, Smt. R. Indira and M/s. Indira Foundations Pvt. Ltd. Along with this letter of request, he has filed a Revised Return for the asst year 2005-06 on 28.03.2013 offering additional income of Rs. 20,35,727/- " 9.1 Further, from Page-4 of the assessment order, it is seen that the Investigation Authorities have quantified the undisclosed income for the A.Y. 2005-06 of Shri V. Gurunathan, F/o Shri V.G. Rajendran and forwarded it the jurisdictional officer concerned i.e. ITO, Salary Ward- II(1), Chennai. The relevant portion of the assessment order is reproduced hereunder: Para.1 of Page-4: "The DDIT (Inv.) quantified Rs. 6,68,15,725/- ....
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....oth the assessees cases are restored to the file of the AO for re-adjudication." In view of the above, the ld.CIT-DR stated that there are three additions directed to be verified and to be considered by Tribunal in above para 8 of the Tribunal's order but now, only one issue remains is the third issue as regards to addition of Rs. 2.99 crores includes peak credit in respect of the bank accounts considered in the hands of Shri V. Gurunathan. The ld.CIT-DR again repeated these findings for the issue and for the sake of clarity, we are reproducing again, If the addition of Rs. 2.99 Cr. includes the peak credits in respect of the bank accounts Considered in the hands of Shri V.Gurunathan then no further addition on is liable to be made in the hands of Shri V.Gurunathan, With these directions, the appeals in both the assessees cases are restored to the file of the AO for re-adjudication. The ld.CIT-DR then took us through the order giving effect to the order of Tribunal passed u/s. 143(3) r.w.s. 147 r.w.s. 154 of the Act dated 26.12.2018, wherein the AO has considered this issue and added a sum of Rs. 26,03,26,145/- and after considering the direction, framed assessment a....
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.... in ITA No.128/CIT(A)-6/2018 dated 18.09.2020, wherein the CIT(A) has deleted the addition made by AO of Rs. 26,03,26,145/- by observing in paras 4.10.2 to 4.10.7 as under:- 4.10.2 As has been elaborately explained in the above referred CIT(A) Order, the appellant followed a practice of "cyclic/circular" transactions, wherein, whenever the appellant was in need of funds, he would present cheques of various persons (from the unaccounted Bank accounts managed by him) into the Bank account which required funds. Further, few entries were contra entries since the cheques presented had bounced. The CIT(A)- 2, Chennai, thus came to a conclusion that the credit entries by way of cheque deposits/bank transfers are concerned, the sources for these credits are the corresponding debits in the other unaccounted bank accounts, and vice versa, operated in the same fashion. Hence, the CIT(A)-2, Chennai had concluded w.r.t. Account no495901, the source of funds for credit by way of cheque deposits/bank transfers stands explained and not liable for taxation. 4.10.3 It is conclusively known from the Order of CIT(A)-2, Chennai, passed in the case of Shri.V.Gurunathan and upheld by th....
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....ellant's father, held that the total income which is to be taxed is the Peak Credit of Rs. 2.99 Crs and the matter on this issue was set aside to A.O, to verify if the Peak Credit amount has been calculated after considering the bank account of appellant's father. Based on the calculation of Peak Credit which was thoroughly analysed in the Order of CIT(A)-2, Chennai, in the case of the appellant's father, it is seen that the said Bank account has been duly considered for the purpose of calculating peak credit, which has been assessed in the hands of the appellant. Further, all the Bank statements that have been used to make the circular transactions are before the Assessing Officer. It is on this basis that the peak credit has been arrived at Rs. 2.99 Crs. If one were to take into account the transactions not merely of cash but also those routed through cheques from all the accounts and the peak credit arrived at, the peak will be a sum of 34,52,466/- while the assessee has already offered a sum of 2.99 Crs, which is even higher. Having taken the peak credit in the manner upheld by the Hon'ble ITAT, one cannot again take into account the entire credits also and in a....
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....g the above discussion and as per the directions of Hon'ble ITAT, since the A.O. has found that the said Bank account is considered for the purpose of computing the Peak Credit Balance of Rs. 2.99 Crs, no further addition is to be made on this issue. Hence, as directed by the Hon'ble ITAT, as his Bank account has already been considered for the purpose of Peak Credit computation of Rs. 2.99 Crs, no further addition is to be made on this account." Aggrieved, now Revenue is in appeal before us. 5. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the Tribunal in its order dated 23.11.2017 has adjudicated the interrelated cases of the assessee and assessee's father, wherein it is held that the total income is to be taxed including the peak credit of Rs. 2.29 crores. The CIT(A) in this round and earlier rounds also and AO's remand report and even DDIT (Inv)-IV(2), Chennai in his report worked out the peak credit at Rs. 2.99 crores. Based on peak credit calculated after considering the bank account of assessee's father, the peak credit is at Rs. 2.99 crores. The lower authorities have given a concurrent finding that the ban....