Rahul Vijay Munot, Ahmednagar V. Income-tax Officer,

ITA 1923/PUN/2013

• Counselvise Citation: 192324514 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 12-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 30-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Unexplained cash credit; Business income; Peak credit; Block assessment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1923/PN/2013 (ASSESSMENT YEAR : 2009-10) RAHUL VIJAY MUNOT, C/O NEWASKAR CAR CARE, OLD VASANT TALKIES ROAD, AHMEDNAGAR 414 001. PAN : AGJPM8199M . APPELLANT VS. INCOME TAX OFFICER, WARD- 1, AHMEDNAGAR. . RESPONDENT ASSESSEE BY : MR. SUNIL GANOO DEPARTMENT BY : MR. B. C. MALAKAR DATE OF HEARING : 18-02-2015 DATE OF PRONOUNCEMENT : 31-03-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IT/TP, PUN E DATED 06.09.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 29.1 1.2011 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T. [A] TP/IT HAS ERRED BY WRONGLY ADDING THE EN TIRE CASH DEPOSITED IN BANK OF RS.1,85,97,900/- INSTEAD OF PEAK CASH DEPOSIT OF RS.65,76,900/- MADE BY AO. THE AFORESAID ADDITION B EING ARBITRARY, PERVERSE, BASED ON SURMISES AND CONJECTURE THE LEAR NED C.I.T [A] ENHANCE THE SAME. THE IMPUGNED ENHANCE ADDITION MAY PLEASE BE DELETED. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED C.I.T. [A] HAS ERRED IN CONFIRMING FOR NOT GRANTING THE DEDUCTION BY ASSESSING OFFICER OF OPENING CASH BALANCE OF RS.7,30,561/- CA RRIED OVER FROM EARLIER YEAR FROM PEAK CASH DEPOSIT. THE CLAIM FOR NOT GRANTING THE CREDIT / DEDUCTION FOR OPENING CASH BALANCE IS BEING ARBITRARY, PERVERSE, BASED ON SURMISES AND ITA NO.1923/PN/2013 CONJECTURE THE LEARNED C.I.T. [A] OUGHT TO HAVE ALL OWED THE SAID DEDUCTION. THE SAID DEDUCTION MAY PLEASE BE GRANTED. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED C.I.T [A] HAS ERRED IN CONFIRMING OF NOT GRANTING T HE DEDUCTION BY THE AO FOR CLAIM OF INTEREST ON BORROWED FUND OF RS.2,69,075/- . THE AFORESAID REJECTION BEING ARBITRARY, PERVERSE, BASED ON SURMISES AND CO NJECTURE THE LEARNED C.I.T. [A] OUGHT TO HAVE ALLOWED THE SAID DEDUCTION. THE I MPUGNED DEDUCTION MAY PLEASE BE GRANTED. 3. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE F OR THE ASSESSEE SUBMITTED THAT ASSESSEE DOES NOT WISH TO PRESS THE GROUND OF APPEAL NOS.2 & 3 AND IN THIS CONTEXT, HE HAS REFERRED TO A WRITTEN COMMUNICATION OF THE ASSESSEE DATED 12.02.2015, COPY OF WHICH IS PLACED ON RECORD. ACCORDINGLY, GROUND OF APPEAL NOS.2 & 3, WHICH HAVE WITHDRAWN BY THE ASSESSEE, ARE TREATED AS DISMISSED. 4. THE ONLY DISPUTE REMAINING IN THIS APPEAL IS WIT H REGARD TO THE ACTION OF THE CIT(A) IN TREATING THE ENTIRE CASH DEPOSITED IN BANK OF RS.1,85,97,900/- AS UNEXPLAINED INCOME OF THE ASSESSEE INSTEAD OF THE P EAK CREDIT OF RS.65,76,900/- TREATED BY THE ASSESSING OFFICER AS UNEXPLAINED INCOME. 5. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE I S AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 07.05.2010 DECLARING A TOTAL INCOME OF RS.5,50,510/-. IN THE RETURN OF IN COME, ASSESSEE HAD DECLARED INCOMES BY WAY OF SHARE OF PROFIT, INTEREST, REMUNE RATION, ETC. FROM TWO PARTNERSHIP FIRMS, VIZ. M/S NEWASKAR MOTORS AND M/S NEWASKAR CAR CARE, SALARY FROM A PVT. LTD. COMPANY SANDEEP AUTOMOBILES PVT. LTD., INTEREST, ETC.. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS SUBJ ECT TO A SCRUTINY ASSESSMENT YEAR 143(3) OF THE ACT WHEREBY THE TOTAL INCOME HAS BEEN ASSESSED AT RS.1,21,33,490/-. THE SUBJECT-MATTER O F CONSIDERATION BEFORE US RELATES TO AN ADDITION OF RS.65,76,900/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED DEPOSITS IN THREE SAVING BAN K ACCOUNTS. THE RELEVANT ITA NO.1923/PN/2013 FACTS ARE THAT THE ASSESSING OFFICER NOTED THAT ASS ESSEE HAD MADE CASH DEPOSITS IN HIS THREE SAVING BANK ACCOUNTS AMOUNTIN G TO RS.1,85,97,900/-, AS DETAILED IN PARA 3 OF THE ASSESSMENT ORDER. THE AS SESSEE WAS SHOW-CAUSED TO EXPLAIN THE CASH DEPOSITS MADE IN THE THREE SAVI NGS BANK ACCOUNTS. ASSESSEE EXPLAINED THAT THE CASH DEPOSITS WERE OUT OF UNACCOUNTED BUSINESS CARRIED OUT BY HIM IN AUTOMOBILE SPARES, ACCESSORIE S TYRES, TUBES, ETC.. IT WAS FURTHER EXPLAINED BY THE ASSESSEE THAT HE PURCHASED GOODS IN CASH WITHOUT SUPPORTING PURCHASE BILLS AND ALSO SOLD GOODS WITHO UT ISSUING SALE BILLS TO THE CUSTOMERS AND THAT NO BOOKS OF ACCOUNT OR ANY OTHER ROUGH RECORD WAS MAINTAINED BY HIM WITH RESPECT TO SUCH UNACCOUNTED BUSINESS ACTIVITY. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER, TH AT ONLY PROFIT FROM SUCH BUSINESS ACTIVITY BE ASSESSED TO TAX AND IN THIS CO NTEXT, IT WAS STATED THAT NET PROFIT @ 5% OF TOTAL CASH DEPOSITS OF RS.1,85,27,90 0/- BE ACCEPTED AS UNACCOUNTED BUSINESS INCOME. IN THIS MANNER, A SUM OF RS.9,26,400/- WAS OFFERED TO TAX AS INCOME FROM SUCH UNACCOUNTED BUSI NESS ACTIVITY. 6. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD NO T FURNISHED ANY PRECISE INFORMATION LIKE SINCE WHEN HE WAS IN SUCH A BUSINESS, WHAT WAS THE EXTENT OF INITIAL CAPITAL, PLACES FROM WHERE SUCH G OODS WERE PURCHASED, ETC.. FURTHER, THE ASSESSING OFFICER NOTED THAT ASSESSEE DID NOT FURNISH ANY INFORMATION ABOUT THE EXTENT OF TURNOVER, VALUE AND POSITION OF STOCK AT THE CLOSING, AMOUNT OF DEBTORS/CREDITORS, ETC.. IN THE ABSENCE OF ANY EVIDENCE OF HAVING CONDUCTED SUCH UNACCOUNTED BUSINESS, ASSESSI NG OFFICER HELD THAT ASSESSEES EXPLANATION THAT THE CASH DEPOSITS IN TH E BANK ACCOUNT HAD COME OUT OF UNACCOUNTED BUSINESS RECEIPTS COULD NOT BE A CCEPTED. INSTEAD, THE ASSESSING OFFICER PROCEEDED TO TAX THE AMOUNT OF PE AK CREDIT IN ALL THE THREE BANK ACCOUNTS. THE PEAK CREDIT IN ALL THE THREE BA NK ACCOUNTS WAS DETERMINED AT RS.65,76,900/- WHICH WAS ADDED AS UNDISCLOSED IN COME IN THE HANDS OF THE ASSESSEE. THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE CIT(A) ITA NO.1923/PN/2013 CONTENDING THAT THE ASSESSING OFFICER WAS NOT JUSTI FIED IN MAKING AN ADDITION OF RS.65,76,900/- ON THE FACTS AND CIRCUMSTANCES OF TH E CASE. ALTERNATIVELY, ASSESSEE ALSO CONTENDED THAT THE ADDITION MADE BY T HE ASSESSING OFFICER BE SCALED DOWN BY AN AMOUNT OF RS.7,30,561/- WHICH REP RESENTED OPENING CASH BALANCE. HOWEVER, THE CIT(A) WAS OF THE OPINION TH AT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MERELY TAXING THE PEAK CREDIT OF RS.65,76,900/- AS UNDISCLOSED INCOME BUT ACCORDING TO HIM THE ENTIRE AMOUNT OF CASH DEPOSITS AMOUNT TO RS.1,85,27,900/- WAS LIABLE TO THE ASSESS ED AS UNDISCLOSED INCOME. ACCORDINGLY, THE CIT(A) SHOW-CAUSED THE ASSESSEE AS TO WHY THE INCOME BE NOT ENHANCED ON THE AFORESAID ASPECT. ASSESSEE OBJ ECTED TO THE ENHANCEMENT PROPOSED BY THE CIT(A) AND DEFENDED THE ACTION OF THE ASSESSING OFFICER IN COMPUTING THE UNDISCLOSED INCO ME ON THE BASIS OF THE PEAK CREDIT OF THE THREE BANK ACCOUNTS. THE PLEA O F THE ASSESSEE WAS THAT THE PEAK DEPOSIT HAS BEEN CORRECTLY WORKED OUT BY THE A SSESSING OFFICER ON THE BASIS OF THE CASH BOOK PREPARED AND THAT THE SOURCE OF SUBSEQUENT CASH DEPOSIT IS EXPLAINED BY THE AMOUNT OF EARLIER CASH WITHDRAWN. IN OTHER WORDS, ASSESSEE SOUGHT THE BENEFIT OF EARLIER CASH WITHDRA WALS FOR EXPLAINING THE SUBSEQUENT CASH DEPOSITS. THE CIT(A), HOWEVER, HAS NOT ACCEPTED THE PLEA RAISED BY THE ASSESSEE. ACCORDING TO THE CIT(A), A SSESSEE DID NOT LEAD EVEN A SINGLE EVIDENCE OF HAVING CARRIED OUT ANY UNDISCL OSED BUSINESS. ACCORDING TO THE CIT(A), THE ONUS WAS ON THE ASSESSEE TO ESTA BLISH THE SOURCE OF THE CASH DEPOSITS AND THAT ASSESSEE HAD FAILED TO EXPLA IN SUCH SOURCES. THE CIT(A) HAS FURTHER HELD THAT THE BENEFIT OF SET-OFF OF EARLIER CASH WITHDRAWAL AGAINST THE SUBSEQUENT CASH DEPOSITS BEING CLAIMED BY THE ASSESSEE WAS NOT AUTOMATIC AND THE ASSESSEE WAS REQUIRED TO JUSTIFY THE SAME. THE CIT(A) HAS CONTENDED THAT SUCH BENEFIT COULD ONLY BE GRANTED O N THE BASIS OF THE EVIDENCE AVAILABLE ON RECORD. IN THE PRESENT CASE, ACCORDING TO THE CIT(A), SUCH BENEFIT COULD NOT BE ALLOWED TO THE ASSESSEE B ECAUSE ASSESSEE HAD FAILED TO ESTABLISH THE EXISTENCE OF THE UNACCOUNTE D BUSINESS ITSELF. SINCE ITA NO.1923/PN/2013 ASSESSEE HAD FAILED TO ESTABLISH THE EXISTENCE OF U NACCOUNTED BUSINESS, IT COULD NOT BE PRESUMED THAT THERE WAS A ROTATION OF CASH SO AS TO ALLOW THE BENEFIT OF THE PEAK CREDIT THEORY TO THE ASSESSEE. IN THIS MANNER, THE CIT(A) ENHANCED THE ADDITION MADE BY THE ASSESSING OFFICER TO RS.1,85,27,900/- ON ACCOUNT OF THE UNDISCLOSED INCOME REPRESENTED BY TH E CASH DEPOSITS IN THE THREE SAVING BANK ACCOUNTS. AGAINST THE AFORESAID, ASSESSEE IS IN APPEAL BEFORE US. 7. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE POINTED OUT THAT THE ONLY ISSUE IN DISPUTE WAS RELATING TO THE ENHANCEME NT OF INCOME EFFECTED BY THE CIT(A). THE LD. REPRESENTATIVE SUBMITTED THAT THERE WAS NO JUSTIFICATION FOR THE CIT(A) TO NEGATE THE COMPUTATION OF PEAK CR EDIT MADE BY THE ASSESSING OFFICER FOR THE PURPOSES OF COMPUTING UNDISCLOSED I NCOME RELATING TO THE TRANSACTIONS IN THE THREE BANK ACCOUNTS. THE LD. R EPRESENTATIVE POINTED OUT THAT THE PEAK CREDIT THEORY HAS BEEN ACCEPTED BY TH E HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. FERTILIZER TRADERS, (2 014) 98 DTR 323 (ALL) AND ALSO BY THE HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. JAWANMAL GEMAJI GANDHI, (1985) 151 ITR 353 (BOM), WHICH WERE ALSO RELIED UPON BEFORE THE CIT(A). 8. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE APPEARING FOR THE REVENUE HAS RELIED UPON THE ORDER OF THE CIT(A) IN SUPPORT OF THE CASE OF THE REVENUE. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO N. IN THE PRESENT CASE, ASSESSEE DOES NOT DISPUTE THAT THE CASH DEPOSITS FO UND TO HAVE BEEN MADE IN THE THREE SAVING BANK ACCOUNTS IN QUESTION ARE UNEX PLAINED. WE SAY SO FOR THE REASON THAT THE EXPLANATION RENDERED BY THE ASS ESSEE THAT THE CASH DEPOSITS REPRESENTED PROCEEDS OF UNACCOUNTED BUSINE SS CARRIED ON BY HIM ITA NO.1923/PN/2013 HAS NOT BEEN ACCEPTED BY THE ASSESSING OFFICER AS W ELL AS BY THE CIT(A). BOTH THE AUTHORITIES BELOW HAVE RECORDED CONCURRENT FINDING THAT THE EXISTENCE OF THE UNACCOUNTED BUSINESS CANVASSED BY THE ASSESS EE COULD NOT BE PROVED ON THE BASIS OF ANY MATERIAL OR EVIDENCE. EVEN BEF ORE US, THE SAID POSITION CONTINUES AND THEREFORE WE PROCEED ON THE BASIS THA T THERE IS NO MATERIAL ON RECORD TO INDICATE PRESENCE OF UNACCOUNTED BUSINESS BY THE ASSESSEE. THE CIT(A) HELD THAT THE ENTIRE GROSS AMOUNT OF CASH DE POSITS ARE ASSESSABLE AS UNEXPLAINED AND NOT MERELY THE AMOUNT OF PEAK CREDI T OF THE THREE BANK ACCOUNTS. 10. WE ARE IN AGREEMENT WITH THE CIT(A) THAT FUNDAM ENTALLY THE ONUS IS ON THE ASSESSEE TO ESTABLISH THE SOURCE OF ANY CASH CR EDIT AND IN THE PRESENT CASE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF C ASH DEPOSITS IN THE BANKS ACCOUNTS. THE ALTERNATE PLEA OF THE ASSESSEE WAS T HAT THE WITHDRAWALS MADE FROM THE BANK ACCOUNT SHOULD BE GIVEN CREDIT VIS-- VIS THE SUBSEQUENT CASH DEPOSITS MADE IN THE BANK ACCOUNTS. THE CIT(A) HAS REJECTED THE AFORESAID ALTERNATE PLEA AND ACCORDING TO HIM, BENEFIT OF THE EARLIER CASH WITHDRAWALS CANNOT BE ALLOWED AGAINST THE SUBSEQUENT DEPOSITS S INCE ASSESSEE WAS NOT ABLE TO ESTABLISH THE EXISTENCE OF THE UNACCOUNTED BUSINESS. THE MOOT QUESTION IS THAT IN THE ABSENCE OF ANY CLINCHING EX PLANATION WITH REGARD TO THE WITHDRAWALS AND DEPOSITS, CAN THE ASSESSEE BE ALLOW ED THE BENEFIT OF THE EARLIER CASH WITHDRAWALS AGAINST THE SUBSEQUENT CAS H DEPOSITS. IN THIS CONTEXT, THE HONBLE ALLAHABAD HIGH COURT IN THE CA SE OF FERTILIZER TRADERS (SUPRA) HAS OBSERVED AS UNDER :- 13. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE RECORD, IT APPEARS THAT THE BASIC DISPUTE IS REGARDING THE RE-COMPUTAT ION OF THE PEAK PERTAINING TO THE CREDITS/DEBITS FOR THE PURPOSE OF UNDISCLOSED I NCOME. THE TRIBUNAL IN ITS IMPUGNED ORDER HAS OBSERVED THAT :- '... WE FAIL TO UNDERSTAND AS TO HOW THE AO HAS WOR KED OUT THE PEAK ON THE BASIS OF PICK AND CHOOSE. IT IS SETTLED LAW THAT IN THE BLOCK ASSESSMENT, THE COMPUTATION OF UNDISCLOSED INCOME C OULD BE MADE ITA NO.1923/PN/2013 ONLY ON THE BASIS OF SEIZED MATERIAL AND MATTERS SE IZED DURING SEARCH. THE AO CANNOT IGNORE SOME MATERIAL.' 14. REGARDING THE PEAK THEORY, IT MAY BE MENTIONED THAT THE PEAK THEORY WAS DEFINED IN THE SAMPATH IYENGAR'S LAW OF INCOME- TAX, VOL. 3, 9TH EDITION, PAGE 3547. ACCORDINGLY, 'PEAK CREDIT' THEORY - ONE OF THE COMMONEST DEFECTS OF AN ASSESSEE, WHERE A SINGLE CREDIT OR NUMBER OF CREDITS APPEAR IN THE BOOKS IN THE ACCOUNT OF ANY PARTICULAR PERSON SIDE BY SID E WITH A NUMBER OF DEBITS IS THAT THEY SHOULD ALL BE ARRANGED IN SERIAL ORDER, T HAT A CREDIT FOLLOWING A DEBIT ENTRY SHOULD BE TREATED AS REFERABLE TO THE LATTER TO THE EXTENT POSSIBLE AND THAT, NOT THE AGGREGATE BUT ONLY THE 'PEAK' OF THE CREDIT SHOULD BE TREATED AS OWN EXPLAINED. TO GIVE A SIMPLE EXAMPLE, SUPPOSE TH ERE ARE CREDITS IN THE ASSESSEE'S BOOK IN THE ACCOUNT. A OR RS.5,000 EACH ON 1ST OCTOBER, 1990 AND AGAIN ON 5TH NOVEMBER, 1990 BUT THERE IS A DEBIT BY WAY OF REPAYMENT SHOWN ON 27TH OCTOBER, 1990, THE EXPLANATION WILL BE THAT THE CREDIT APPEARING ON 5TH NOVEMBER, 1981 HAS OR COULD HAVE COME OUT OF THE WI THDRAWAL/REPAYMENT ON 27TH OCTOBER, 1981. THIS PLEA IS GENERALLY ACCEPTED AS IT IS LOGICAL AND ACCEPTABLE (WHETHER THE CREDITOR IS A GENUINE PARTY OR NOT), PROVIDED THERE IS NOTHING IN THE MATERIAL ON RECORD TO SHOW THAT A PA RTICULAR WITHDRAWAL/REPAYMENT COULD NOT HAVE BEEN AVAILABLE ON THE DATE OF THE SUBSEQUENT CREDIT. 15. A REFINEMENT OR EXTENSION OF THE PLEA OCCURS WH ERE THE CREDITS APPEAR NOT IN THE SAME ACCOUNT BUT IN THE ACCOUNTS OF DIFF ERENT PERSONS. EVEN THEN, IF THE GENUINENESS OF ALL THE PERSON IS DISBELIEVED AN D ALL THE CREDITS APPEARING IN THE DIFFERENT ACCOUNT ARE HELD TO BE THE ASSESSE E'S OWN MONEYS, THE ASSESSEE WILL BE ENTITLED TO SET OFF AND A DETERMIN ATION OF THE PEAK CREDIT AFTER ARRANGING ALL THE CREDITS IN THE CHRONOLOGICAL ORDE R. 16. SUCH PROPOSITION WAS ALSO CONSIDERED BY THIS HO N'BLE COURT IN THE MATTER OF CIT VS. NEEMAR RAM BADLU RAM, 122 ITR 68 (ALL) IN WHICH THE RELEVANT PARAGRAPHS ARE REPRODUCED AS UNDER:- 'THE TRIBUNAL ALSO DID NOT AGREE WITH THE DEPARTMEN TAL AUTHORITIES THAT MERELY BECAUSE THE ASSETS IN THE BALANCE SHEET CHAN GED FROM TIME TO TIME, THE DIFFERENCE WOULD NOT BE AVAILABLE FOR EXP LAINING A SIMILAR DIFFERENCE IN SUBSEQUENT YEARS.' 17. IN THE LIGHT OF ABOVE DISCUSSION, WE FIND NOTHI NG WRONG IN THE DIRECTIONS GIVEN BY THE TRIBUNAL BEFORE RESTORING THE MATTER B ACK FOR RE-COMPUTATION. 11. IN TERMS OF THE AFORESAID DISCUSSION, AS PER TH E HONBLE HIGH COURT, EVEN WHERE THE CREDITORS ARE FOUND TO BE NOT GENUIN E, THE PEAK CREDIT THEORY WAS AVAILABLE TO THE ASSESSEE PROVIDED THERE IS NO MATERIAL ON RECORD TO SHOW THAT A PARTICULAR WITHDRAWAL/REPAYMENT COULD NOT HA VE BEEN AVAILABLE ON THE DATE OF THE SUBSEQUENT DEPOSIT. THE AFORESAID DECI SION OF THE HONBLE ALLAHABAD HIGH COURT CLEARLY SUPPORTS THE PLEA OF T HE ASSESSEE IN-SPITE OF THE ASSESSEE HAVING FAILED TO ESTABLISH THE EXISTENCE O F THE UNACCOUNTED BUSINESS. ITA NO.1923/PN/2013 12. THE LD. DEPARTMENTAL REPRESENTATIVE REFERRED TO A JUDGEMENT OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF BHAIYAL AL SHYAM BEHARI VS. CIT, (2005) 276 ITR 38 (ALL), WHICH HAS ALSO BEEN RELIED UPON BY THE CIT(A) TO JUSTIFY THE DENIAL OF PEAK CREDIT THEORY TO THE ASS ESSEE. WE HAVE PERUSED THE SAID JUDGEMENT OF THE HONBLE ALLAHABAD HIGH COURT AND FIND THAT THE FACTS THEREIN WERE QUITE DIFFERENT. IN THE AFORESAID CAS E, ASSESSEE WAS CLAIMING THAT ALL THE CASH CREDIT ENTRIES IN THE DIFFERENT NAMES WERE GENUINE. THE REVENUE HAD TREATED THE AMOUNTS OF CASH CREDITS AS UNEXPLAI NED AND BROUGHT TO TAX THE SAME IN TERMS OF SECTION 68 OF THE ACT. IN THIS BA CKGROUND, ASSESSEE CANVASSED THAT THE PEAK CREDIT SHOULD ALONE BE TREA TED AS INCOME OF THE ASSESSEE AND NOT THE ENTIRE DEPOSITS. THE AFORESAI D PLEA WAS REJECTED BY THE INCOME-TAX AUTHORITIES AND THE SAID ACTION WAS APPR OVED BY THE HONBLE ALLAHABAD HIGH COURT. IN REJECTING SUCH A PLEA, TH E HONBLE HIGH COURT NOTED THAT THE AMOUNT OF CASH CREDIT STANDING IN THE NAME S OF DIFFERENT PERSONS WERE ALL ALONG CLAIMED BY THE ASSESSEE TO BE GENUINE DEP OSITS, AND THEREFORE, THE WITHDRAWALS/PAYMENT OF THE AMOUNTS TO DIFFERENT SET OF PERSONS DURING THE PREVIOUS YEAR WOULD NOT ENTITLE THE APPLICANT TO CL AIM BENEFIT OF PEAK CREDIT. QUITE CLEARLY, FACTS IN THE PRESENT CASE STAND ON A DIFFERENT FOOTING INASMUCH AS IN THE PRESENT CASE, THE TRANSACTIONS IN THE THR EE SAVINGS BANK ACCOUNTS ARE NOT AT ALL CLAIMED TO BE EXPLAINED TRANSACTIONS, RA THER ASSESSEE HAS ACCEPTED THEM TO BE UNEXPLAINED TRANSACTIONS. THEREFORE, TH E FACT-SITUATION IN THE CASE OF BHAIYALAL SHYAM BEHARI (SUPRA) CONSIDERED BY THE HONBLE ALLAHABAD HIGH COURT IS NOT COMPARABLE TO THE PRESENT CASE. THUS, THE SAID DECISION DOES NOT HELP THE CASE OF THE REVENUE IN THE PRESENT CIRCUMS TANCES. 13. ANOTHER DECISION RELIED UPON BY THE LD. DEPARTM ENTAL REPRESENTATIVE AS ALSO BY THE CIT(A) IS THE JUDGEMENT OF THE HONB LE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VIJAY AGRICULTURAL INDUSTRIES, (2007) 294 ITR 610 (ALL). IN THE SAID DECISION, THE HONBLE ALLAHABAD HIGH COURT FOLLOWED ITS EARLIER ITA NO.1923/PN/2013 DECISION IN THE CASE OF BHAIYALAL SHYAM BEHARI (SUP RA) BECAUSE THE FACTS WERE SIMILAR. AS WE HAVE ALREADY NOTED EARLIER THAT THE FACT-SITUATION IN THE PRESENT CASE IS QUITE DISTINCT FROM THE FACTS IN THE CASE O F BHAIYALAL SHYAM BEHARI (SUPRA), THEREFORE THE AFORESAID DECISION ALSO DOES NOT HELP THE CASE OF THE REVENUE IN THE PRESENT CASE. 14. ANOTHER JUDGEMENT RELIED UPON BY THE LD. DEPART MENTAL REPRESENTATIVE IS THE JUDGEMENT OF THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF JHAMATMAL TAKHATMAL KIRANA MERCHANTS VS. CIT, (1999 ) 152 CTR 311 (MP). IN THE CASE BEFORE THE HONBLE MADHYA PRADESH HIGH COURT, UNEXPLAINED CREDIT AND DEBIT ENTRIES WERE FOUND RECORDED IN A R OUGH CASH BOOK. THE EXPLANATIONS OF THE ASSESSEE WERE FOUND UNTRUE BY T HE INCOME-TAX AUTHORITIES AS ALSO BY THE TRIBUNAL. THE ASSESSING OFFICER HAD MADE ADDITION OF THE GROSS AMOUNT OF THE CREDIT ENTRIES APPEARING IN THE ROUGH CASH BOOK. ASSESSEE HAD SOUGHT THE BENEFIT OF PEAK CREDIT THEORY WHICH WAS DENIED BY THE INCOME-TAX AUTHORITIES. THE HONBLE MADHYA PRADESH HIGH COURT ALSO DENIED THE BENEFIT OF PEAK CREDIT THEORY BY NOTICING THAT THE ENTRIES OF CREDITING AND DEBITING ITSELF SHOWED THAT ASSESSEE HAD UNDERTAKEN ONLY A JUGGLERY TO SOMEHOW EVADE THE INCOME TAX. IN THE CONTEXT OF SUCH FACTUAL APPRECI ATION OF THE MATTER, THE HONBLE HIGH COURT HELD THAT THERE WAS NO QUESTION OF ALLOWING BENEFIT OF THE PEAK CREDIT THEORY IN SUCH A SITUATION. THE AFORES AID DECISION HAS BEEN RENDERED BY THE HONBLE MADHYA PRADESH HIGH COURT I N THE BACKGROUND OF ITS OWN PECULIAR FACTS. IT CANNOT BE UNDERSTOOD AS A P ROPOSITION TO SAY THAT THE PEAK CREDIT THEORY CANNOT BE APPLIED IN ALL CIRCUMS TANCES. IN-FACT, THE HONBLE SUPREME COURT IN THE CASE OF ANANTHARAM VEERASINGHA IAH & CO. VS. CIT, (1980) 123 ITR 457 (SC) HAS NOTED THAT IT IS A MATTER OF CONSIDERATION IN EACH CASE WHETHER THE CASH CREDIT CAN BE REASONABLY ATTR IBUTED TO A PRE-EXISTING FUND OF CONCEALED PROFITS OR THEY ARE REASONABLY EX PLAINED BY REFERENCE TO CONCEALED INCOME EARNED IN THAT VERY YEAR . ITA NO.1923/PN/2013 15. QUITE CLEARLY, THE PARITY OF REASONING BY THE H ONBLE SUPREME COURT IS TO THE EFFECT THAT IT WOULD BE A MATTER OF CONSIDER ATION IN EACH CASE WHETHER A CASH CREDIT CAN BE REASONABLY ATTRIBUTED TO A PRE-E XISTING FUND OF CONCEALED PROFITS OR THEY ARE REASONABLY EXPLAINED BY THE REF ERENCE TO THE CONCEALED INCOME EARNED EARLIER IN THE VERY SAME YEAR. TO TH E SIMILAR EFFECT ALSO IS THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF JAWANMAL GEMAJI GANDHI (SUPRA). IN-FACT, IN THE CASE BEFORE THE HO NBLE HIGH COURT, ADDITION RELATED TO THE VALUE OF GOLD SEIZED AND CONFISCATED BY THE EXCISE AUTHORITIES. THE VALUE OF GOLD WAS HELD TO BE THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. FOR THE RELEVANT ASSESSMENT YEAR, ASSESSI NG OFFICER ALSO MADE AN ADDITION ON THE GROUND THAT THE RATE OF GROSS PROFI T SHOWN BY THE ASSESSEE WAS LOW. IN DOING SO, THE ASSESSING OFFICER ESTIMATED THE TURNOVER AND THE RATE OF GROSS PROFIT. THE ASSESSEE WAS AGITATING BOTH THE ADDITIONS BEFORE THE APPELLATE AUTHORITIES. HOWEVER, IN THE APPEAL BEFO RE THE TRIBUNAL, ASSESSEE ALSO MADE AN ALTERNATIVE CONTENTION THAT AS THERE H AD BEEN INTANGIBLE ADDITION FOR THE SAME ASSESSMENT YEAR, THERE WAS NO REASON T O MAKE A SEPARATE ADDITION FOR THE VALUE OF THE GOLD. THE TRIBUNAL A CCEPTED THE SAID POSITION AND HELD THAT THERE WAS NO GROUND FOR MAKING A SEPARATE ADDITION FOR THE VALUE OF THE GOLD. THE AFORESAID ASPECT OF THE MATTER TRAVE LLED TO THE HONBLE BOMBAY HIGH COURT, WHICH AFFIRMED THE ACTION OF THE TRIBUN AL. THE HONBLE HIGH COURT SPECIFICALLY NOTED THAT THOUGH THE ASSESSEE DID NOT CONTEND BEFORE THE ASSESSING OFFICER THAT THE SOURCE FOR THE ACQUISITI ON OF THE GOLD WAS THE ADDITION MADE BY THE ASSESSING OFFICER TO THE TURNO VER, YET IT WAS ASSESSEES CASE BEFORE THE ASSESSING OFFICER THAT THE GOLD HAD BEEN LEGITIMATELY ACQUIRED. THE HONBLE HIGH COURT FURTHER NOTED THA T EVEN BEFORE THE TRIBUNAL ASSESSEE HAD ADOPTED SIMILAR STAND BUT ONLY AS AN A LTERNATE PLEA IT WAS CONTENDED THAT THE VALUE OF GOLD CAN BE SAID TO HAV E COME OUT OF THE INTANGIBLE ADDITION ON ACCOUNT OF ESTIMATED TURNOVE R. THIS ASPECT OF THE MATTER WAS ACCEPTED BY THE HONBLE HIGH COURT. A PREMISE WHICH CAN BE DRAWN FROM ITA NO.1923/PN/2013 THE AFORESAID JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IS TO THE EFFECT THAT THE ASSESSEE WAS COMPETENT TO PLEAD FOR THE BENEFIT OF PEAK CREDIT THEORY EVEN WHEN HIS PLEA OF THE IMPUGNED BANK TRANSACTION S WERE FROM UNACCOUNTED BUSINESS, WAS NOT ACCEPTED. 16. THEREFORE, IN CONCLUSION, WE HOLD THAT THERE WA S NO JUSTIFICATION FOR THE CIT(A) TO ENHANCE THE INCOME AMOUNTING TO RS.1,85,9 7,900/- HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. T HE ASSESSING OFFICER WAS QUITE JUSTIFIED IN APPLYING THE PEAK CREDIT AND BRI NGING TO TAX A SUM OF RS.65,76,900/- ON ACCOUNT OF THE UNEXPLAINED DEPOSI TS IN THE THREE SAVING BANK ACCOUNTS. AS A CONSEQUENCE, WE SET-SIDE THE O RDER OF THE CIT(A) AND RETAIN THE ADDITION OF RS.65,76,900/- MADE BY THE A SSESSING OFFICER AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. C ONSEQUENTLY, ASSESSEE SUCCEEDS IN GROUND OF APPEAL NO.1. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED ON 31 ST MARCH, 2015. SD/- SD /- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 31 ST MARCH, 2015. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-IT/TP, PUNE; 4) THE CIT-IT/TP, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE