KAILASHNATH ARUNKUMAR DUBE,SURAT V. INCOME TAX OFFICER, WARD 1(3)(1), SURAT

ITA 623/SRT/2024

AI Insights

The case involves Kailashnath Arunkumar Dube, who appealed against the order of the National Faceless Appeal Centre, Delhi, which confirmed the additions made by the Assessing Officer regarding unexplained cash deposits and other credits in his bank accounts for the assessment year 2012-13. The Assessing Officer had reopened the case based on AIR information about substantial cash deposits in Dube's bank account, which he did not explain. The CIT(A) upheld the additions, noting Dube's failure to provide necessary details or comply with notices. The Tribunal, while agreeing with the need for some additions, estimated the income based on a reasonable percentage of the transactions rather than the total amounts.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 36087 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-10-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 25-05-2024
• Other Referred Cases: Bir Bahadur Singh Sijwali Vs ITO, Sanjay R Shah vs. ITO, CIT Vs President Industries, Ashok Kumar Jai vs. ACIT, CIT vs. Samir Synthetics Mill, PCIT vs. Meenakshi Overseas (P.) Ltd., Signature Hotels (P.) Ltd. vs. ITO, CIT vs. Sfil Stock Broking Ltd., Nanak Motumal Pherwani vs. ITO, Shri Hasmukhbhai B Patel vs. ITO, ITO vs. Deepak Vithaldas Suchank, CIT vs. Tirupati Construction Co., PVIT vs. Shri Indrajeet Zandusing Tomar, Smt. Manjuilaben Champaklal vs. ITO, Shri Babubhai Ganpatram Painter vs. ITO, ITO vs. Maheshkumar Jayantilal Vora
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: CHAITALI SHAH; ISSUING NOTICE UNDER SECTION OF
• Keywords: Condonation of delay; Set aside; Unexplained investment; Income from undisclosed sources; Peak credit; Period of limitation; Competent authority; Reason to believe; Time period of passing order; Tangible material
• Section: 148; 144; 64; 153; 69; 133(6); 69A; 139; 119(2)(b); 20

Judgement Text

"आयकर अपीलȣय अͬधकरण, सुरत Ûयायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT “SMC” BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER आ.अ.सं./ITA No.623/SRT/2024 (AY 2012-13) (Hearing in Physical Court) Kailashnath Arunkumar Dube 37, Hari Om Nagar, b/h Solanki Garden, Althan, Surat-395017 [PAN No: ANPPD 4749 P] बनाम Vs Income Tax Officer, Ward-1(3)(1), Surat, Room No. 203, 2nd Floor, Income Tax Office, Anavil Business Centre, Adajan Hazira Road, Adajan, Surat-395007 अपीलाथȸ/Appellant Ĥ×यथȸ /Respondent िनधाŊįरती की ओर से /Assessee by Ms. Chaitali Shah, CA राजˢ की ओर से /Revenue by Shri Mukesh Jain, Sr-DR अपील पंजीकरण/Appeal instituted on 25.05.2024 सुनवाई की तारीख/Date of hearing 23.10.2024 उद ्घोषणा की तारीख/Date of pronouncement 29.11.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld. CIT(A)”] dated 26.03.2024 for assessment year 2012-13, which in turn arises out of assessment order passed by the Assessing Officer under section 144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 31.10.2019. The assessee has raised the following grounds of appeal:- “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in reopening the case of the assessee u/s 147 of the Act by issuing notice u/s 148 of the Act. 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of learned assessing officer has erred in making addition of Rs.43,99,215/- u/s 69A ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 2 of the I.T. Act on account of alleged unexplained money being cash deposits in bank accounts. 3. On the facts and circumstances of the case as well as law on the subject, the learned assessing officer has erred in making addition of Rs.1,70,507/- u/s 69 of the I.T. Act on account of alleged unexplained investment being other credits in the bank accounts. 4. It is therefore prayed that the assessment framed may please be quashed and/or the above addition made by the assessing officer may please be deleted. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 2. The assessee vide application dated 18/10/2024 raised following additional ground of appeal: “On the basis of facts and circumstances of the case as well as law on the subject, the ld. CIT(A) has erred in not condoning the delay in filing appeal before ld. CIT(A)” 3. Brief facts of the case are that no return of income for assessment year 2012- 13 was filed by the assessee. The case of assessee was reopened on the basis of AIR information that during financial year 2011-12, he has made cash deposit of Rs.43,99,215/- in his saving bank account in Oriental Bank of Commerce. The Assessing Officer after recording reasons and taking approval from Competent Authority issued notice under section 148 on 30.03.2019. The Assessing Officer recorded that notice under section 148 was sent through e-mail id available in record and that in response to notice under section 148, he has not filed return of income. The Assessing Officer obtained information from banker of assessee by issuing notice under section 133(6) of the Act. The banker of assessee informed that total credit in two bank accounts maintained with his bankers was aggregating of Rs.45,69,722/-. ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 3 Such facts are recorded in para-3 of the assessment order. The Assessing Officer further noted that despite issuing several show cause notices, assessee failed to respond all such notices. Thus, in absence of explanation of source of cash deposit, the Assessing Officer added entire cash deposit of Rs.45,69,722/- as well as other credit of Rs. 1,70,507/- under Section 69A to the income of assessee, in the assessment order passed under section 144 r.w.s 147 of the Act on 30.10.2019. 4. Aggrieved by the additions in the assessment order, the assessee filed appeal before ld. CIT(A) on 01.02.2020. The assessee filed detailed statement of fact along with his appeal. In the statement of fact, the assessee stated that he has not filed any return of income as his income is below taxable limit. The assessee was engaged in the activity of taking cash from various parties and used to issue cheques and taking 1.00% of commission on the transaction. The assessee has entered into transaction of Rs.45,69,720/- and earned total commission of Rs.45,697/-. The case of assessee was came under scrutiny for the first time. The reasons recorded and sanction obtained under section 151 was not provided to the assessee. The assessee furnished statement of cash and other credit as informed by banker of assessee. In addition to, the assessee also filed detailed submission on validity of reopening as well as on addition on merit. On the validity of reopening, assessee stated that Assessing Officer made reopening on the basis of information and has not made any enquiry to satisfy that cash deposit in bank account represented unaccounted income. Reasons recorded is to be examined as a standalone basis. It must be something which indicate that income has escaped from ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 4 assessment. Mere bank deposit does not constitute undisclosed income and indicate that this deposit constitutes an income which escape assessment. To support such view, assessee relied upon decision of Delhi Tribunal in the case of Bir Bahadur Singh Sijwali Vs ITO 53 taxmann.com 366 (Del-Trib.) and other decisions. On merit, assessee stated that he was engaged in business of taking cash from various parties and issuing discounting cheque on commission basis and assessee was charging @ 1.00 % commission on the transaction. Thus, net result of profit was Rs.45,697/-, which was below taxable limit. Hence, no return of income was filed by assessee. In alternative submission, assessee submitted that similar kind of business, commission ranging from 0.10% to 1.00% is earned, hence, addition of total income may be restricted by estimating profit @ 1.00 % of the transaction. To support such view, assessee relied upon the decision of ITAT Ahmedabad Benches in the case of Sanjay R Shah vs. ITO [2017] 88 taxmann.com 809 (Ahmedabad- Trib.) and Hon’ble jurisdictional High Court in the case of CIT Vs President Industries 124 taxmann.com 64 (Guj). In another alternative plea, assessee furnished copy of pass book and submitted that maximum peak balance in his bank accounts as on 15.07.2011 was Rs.1,94,606/- and requested to adopt such peak credit for the purpose of addition. 5. On the submission of assessee, the Ld. CIT(A) obtained remand report from Assessing Officer. The Assessing Officer submitted his remand report dated 03.08.2023. The contents of remand report are recorded in para-7.1 of impugned order. In the remand report, Assessing Officer submitted that ample opportunities were given to assessee but the assessee failed to give his ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 5 reply / explanation with regard to transaction done in his bank accounts. In absence of any explanation assessment was completed under section 144 r.w.s. 147 of the Act. The assessee asked for reasons recorded and sanction under section 151, which were provided to the assessee. During remand proceeding the assessee was asked to furnish bank statements of his two bank accounts. The assessee failed to furnish details of bank accounts and no explanation was given by assessee about transactions in bank. The banker confirmed the transactions carried out by assessee. The assessee has given misleading information to avoid tax liability and no explanation was given about credit entries. 6. The copy of remand report was provided to assessee. The assessee filed his rejoinder against remand report. In the rejoinder submission, the assessee reiterated his earlier contention and submitted that assessee was earning 1.00% commission income on the transaction. On the objection raised by Assessing Officer about not providing explanation of credit entry, the assessee stated that Assessing Officer could have enquired from the banker to know about ultimate destination of fund but Assessing Officer failed to carry out any investigation. 7. The Ld. CIT(A) on considering the submission of assessee and remand report of Assessing Officer noted that assessment order was passed on 31.10.2019 and first appeal was filed on 11.02.2020. Thus, there was delay of 50 days in filing appeal. The Ld.CIT(A) dismissed the appeal by referring the provisions of section 119(2)(b) and taking view that such delay could be condoned by ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 6 Central Board of Direct Tax (CBDT), provided it was genuine delay and was out of control on taxpayer. 8. The Ld. CIT(A) also considered the grounds of appeal on merit and held that ratio of decisions of various case laws are not identical to the case of assessee. Some cases, seems to be in favour of assessee but amount involved therein are very meagre and many cases, the facts are not similar with the facts of the instant case. The assessee has not intentionally adhered to various notices issued by Assessing Officer which resulted into passing assessment order under section 144 of the Act. The assessee has not filed any return of income in response to notice issued under section 148 of the Act. He never asked for reasons recorded. Thus, there is no infirmity in the reopening proceedings. The assessee failed to produce any material for challenging the reopening. On merit of addition, ld. CIT(A) upheld the additions by referring the decisions of Bengaluru Tribunal in Ashok Kumar Jai vs. ACIT in ITA Nos. 329-331/Bang/2011, wherein it was held that when the assessee has not given details of beneficiary to whom assessee has provided business of cheque discounting, the business remained unexplained, thus, the ld. CIT(A) upheld the addition made by Assessing Officer. Further aggrieved, the assessee has filed present appeal before Tribunal. 9. I have heard the submission of learned Authorized Representative (ld.AR) for the assessee and learned Senior Departmental Representative (ld. Sr-DR) for the Revenue. The Ld. AR for the assessee submits that assessee has filed application for admission of additional ground which relates to dismissal of appeal beyond the limitation period by First Appellate Authority. The Ld.AR for ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 7 the assessee submits that grounds of appeal raised by assessee was not raise due to accidental omission. The facts related to adjudication of additional ground of appeal is emanating from the contents of order of Ld. CIT(A). No new or additional fact is required to be brought on record for adjudicating additional ground of appeal. The Ld. CIT(A) also adjudicated the grounds of appeal on merit. Hence, due to accidental omission, this ground was not raised, while raising grounds of appeal on merit. The assessee in column No. 15 of Form-35 has explained the ground for condoning the delay in filing appeal before ld CIT(A). the ld CIT(A) has not exercised his jurisdiction under section 249(3) for condoning the delay. The ld. AR of the assessee submits that the order of ld. CIT(A) in dismissing the appeal on the ground of delay may be set aside. 10. The ld. AR of the assesse submits that ground No. 1 of appeal relates to validity of reopening under Section 147 of the Act and issuance of notice under Section 148 of the Act. The ld. AR of the assessee submits that case was reopened solely on the basis of AIR information. No such information was provided to the assessee. In the assessment order, the Assessing Officer mentioned that as per information, assessee made cash deposit in his savings bank account with Oriental Bank of commerce during the year under consideration. Mere reopening on the basis of information is bad in law as the Assessing Officer has not made any enquiry to his satisfaction that cash deposit represents any unaccounted income which is chargeable to tax. There must be some relationship between the reasons recorded and escapement of income which must have a direct nexus or live link between the material ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 8 coming to the notice of Assessing Officer for formation of belief. Mere cash deposit cannot be considered as income of assessee has escaped from assessment as has been held in Birbahadur Singh Sijwali Vs ITO in 53 taxmann.com 366 (Delhi Trib). The basic requirement for reopening is that Assessing Officer must apply his mind to the material in order to have a reason to believe that income has escaped from assessment. 11. In support of ground No. 2 and 3, which relates to addition of cash deposit and other credit in the bank account, the Ld.AR for the assessee submits that mere cash deposit cannot be considered as income. The Assessing Officer made reopening solely on the basis of report of ITR information. Making any independent investigation of fact, there is no liking nowhere reasons recorded on the alleged escapement of income. The cash deposit in bank per se cannot be considered as books of account nor it can be sole category for determining the income of assessee. Ld. AR for the assessee submits that assessee was in the business of cheque discounting, the assessee was receiving cash from his customers and used to issue cheque. The Ld. AR for the assessee submits that business of textile and other readymade garments in Surat businessmen do not take a risk for carrying cash with them. The assessee used to collect cash and issue discounting cheque to various customers. The Ld.AR for the assessee by referring bank statement (copy of page No.26-28 of the paper book) explained that all cash deposited and assessee has immediately issued discounting cheques by referring various entries. The ld. AR for the assessee submits that ultimately a very meagre amount was left in the account of assessee. The cheque was issued immediately on receipt of cash and on ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 9 clearing of cheque. The pattern of cash deposits and clearance of cheque clearly reflects the nature of business transaction of assessee. The Assessing Officer has not investigated the fact thoroughly to disbelieve the explanation of assessee was not justified in making addition of entire credit though entire amount was immediately debited. In alternative submission, ld. AR for the assessee submits that assessee was earning commission income @ 1.00 % of transaction, therefore, only 1.00% of total transactions of Rs.45,69,722/- i.e., Rs.45,672/- may be made. In another alternative, Ld. AR for the assessee submits that peak balance in both accounts on various occasions were not more than Rs.1.95 lakhs, therefore, at the worst only peak balance could be added. To support her various submission, Ld. AR for the assessee relied upon following decisions:  Ganga Saran & Sons (P.) Ltd. vs. ITO [1981] 6 Taxman 14 (SC)  ITO vs. Lakhmani Mewal Das [1976] 103 ITR 437 (SC)  Balkrishna Hiralal Wani vs. ITO & Ors.(2010) 36 DTR 0161 (Bom)  United Electrical Company (P) Ltd. vs. CIT & Ors. (2002) 178 CTR 0192 (Del)  PCIT vs. Meenakshi Overseas (P.) Ltd. [2017] 82 taxmann.com 300 (Del)  Nu Power Reneweables (P.) Ltd. vs. DCIT [2018] 94 taxmann.com 29 (Bom)  PCIT vs. G.& G Pharma India Ltd. [2017] 81 taxmann.com 109 (Del)  Signature Hotels (P.) Ltd. vs. ITO [2012] 20 taxmann.com 797 (Del)  CIT vs. Sfil Stock Broking Ltd. [2010] 325 ITR 285 (Del)  Bir Bahadur Singh Sijwali vs. ITO [2015] 53 taxmann.com 366 (Delhi-Trib.)  Ashish Natvarlal Vashi vs. ITO ITANo.3522/Ajd/2016 dated 19.04.2021  Shri Hasmukhbhai B Patel vs. ITO ITA No.193/Srt/2019 dated 24.07.2019  CIT vs. Samir Synthetics Mill [2010] 326 ITR 410 (Guj)  CIT vs. President Industries [2002] 124 Taxman 654 (Guj)  Sanjay R Shah vs. ITO [2017] 88 taxmann.com 809 (Ahmedabad-Trib.)  ITO vs. Deepak Vithaldas Suchank ITA No.361/Srt/2018 dated 30.07.2021  Nanak Motumal Pherwani vs. ITO ITA No.527/Srt/2024 dated 14.10.2024 ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 10  CIT vs. Tirupati Construction Co. [2015] 55 taxmann.com 308 (Guj)  PVIT vs. Shri Indrajeet Zandusing Tomar TA No.908 of 2015 dated 22.12.2015  Smt. Manjuilaben Champaklal vs. ITO ITA No.1155/Ahd/2011 dated 02.05.2014  Shri Babubhai Ganpatram Painter vs. ITO ITA No.1363/Ahd/2015 dated 28.02.2019  ITO vs. Maheshkumar Jayantilal Vora (2004) 23 CCH 0083 Rajkot Trib 12. On the other hand, Ld. Sr-DR for the Revenue submits that before Assessing Officer assessee has not made any compliance despite giving numerous opportunities. Thus, Assessing Officer has no option but to complete assessment under section 144 of the Act. On the plea raised in additional ground of appeal, the ld. Sr. DR for the revenue submits that appeal before ld CIT(A) was filed beyond the prescribed period of limitation, no application for condonation of delay was filed by the assessee. Still, the Bench may take decision in accordance with its discretion. Against the ground No. 1, the ld. Sr. DR of the revenue submits that the case of assessee was reopened on the basis of information about the huge cash credit in the bank account. The assessee has not filed return of income under Section 139 of the Act despite the fact that the assessee was engaged in the business of alleged cash discounting in the form of parallel economy. At the time of reopening, a prima facie view that income of assessee has escaped assessment is sufficient and not fool proof satisfaction of the Assessing Officer is required The Assessing Officer was having sufficient tangible material to form an opinion about escapement of income. No return of income in response to notice under Section 148 was filed. So far as addition on merit is concerned, the ld. Sr. DR for the revenue submits that no details were furnished before the Assessing ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 11 Officer despite giving more than sufficient opportunity. Even before Ld. CIT(A) assessee has not given the details of beneficiary. The Ld. CIT(A) after considering the submission of assessee passed a detailed order. So far as reliance of various case laws are concerned, for making addition on reasonable profit or percentage of disclosed nature of business, in such cases, there was no dispute that assessee was engaged in business of cheque discounting. However, the assessee has neither disclosed his nature of business before Assessing Officer and on taking the plea of cheque discounting, the details of beneficiaries were not provided. The assessee has not discharged primary onus thus there was no occasion for Assessing Officer to investigate the fact on the additional ground of appeal. The Ld. Sr-DR for the Revenue submits that assessee has not disclosed as to why there was delay in filing appeal before Ld.CIT(A). 13. I have considered the submissions of both the parties and have gone through the orders of lower authorities carefully. I have also deliberated on various case law relied upon first time considering the plea of condonation delay. The Ld. AR for the assessee while making her submission on additional ground of appeal submitted that in Form-35, the assesse has explained cause of delay, I find that before dismissing the appeal on the issue of limitation, no specific show cause notice was issued. Moreover, ld CIT(A) has not exercised his jurisdiction under section 249(3) for condoning the delay. Considering the fact that delay in filing appeal before Ld. CIT(A) was only of 50 days. I further find the delay was not very long or inordinate. The assessee was not going to be benefitted by filing appeal belatedly. Thus, considering overall facts and ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 12 circumstances of the case, the order of Ld. CIT(A) on the issue of delay is set aside. In the result, additional ground of appeal is allowed. Now adverting to merit of the case. 14. Ground No 1. relates to validity of reopening and issuing notice under section 148 of the Act. I find that Assessing Officer made reopening on the basis of AIR information about huge cash deposits in assessee’s bank accounts and notice under section 148 was served on 23.03.2019. Service of notice under section 148 is nowhere disputed by Ld. AR for the assessee, in her submission or in the submission filed before Ld. CIT(A). Admittedly, neither return of income was filed in response to notice under section 148 of the Act nor any objection is raised before Assessing Officer. Though, ground of appeal on the validity or reopening was raised before ld CIT(A), however, main contention of the assessee was that reasons recorded and details of the AIR information was not supplied. The ld CIT(A) while considering such ground of appeal held that neither return of income was filed by the assessee is response to the notice under section 148 nor made compliance to various notices during assessment. Even during first appellate stage the assessee has filed various case law. The ld CIT(A) ultimately held that assessee has not adhered to statutory notices served upon him and after receipt of assessment order, he tried to put efforts in his defence that reasons recorded and sanction under Section 151 was not received. Such demand is made for the first time on 27/01/2020 and on 29/06/2021. The assessee has not revealed as to why he did not respond to various notices during assessment, specifically against notice under Section 148 of the Act. All such objection should have been ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 13 made before Assessing Officer. Even during remand proceeding, the assessee was provided all such details. Even after receipt of reasons recorded, the assessee has not produced any material to support his contention against the reopening. I am in full agreement with the finding of ld. CIT(A). Still, I have independently examined the validity of reopening and issuance of notice under Section 148 of the Act. On plain reading of language of Section 147 and 148, the conditions that needs to be fulfilled before taking action under this Section are; the Assessing Officer must have reason to believe that income has escaped assessment, such income has escaped assessment on account of failure on the part of assessee to disclose fully and truly, in case, reopening is within four years from assessment completed under Section 143(3) or 147. The Assessing Officer must comply the condition laid down in Section 148 to 153 which consists that he must record reasons for reopening, issue notice to assessee, calling him to file return of income. The Assessing Officer must adhere to time limit for notice under Section 149 and 150 and obtained prior sanction of his superior if required under Section 151 and complete the assessment within time limit prescribed in Section 153. All these conditions are not challenged by the assessee. The ld. AR of the assessee made more emphasis that there should be live link or Assessing Officer must investigate to bring the material on record that income of assessee has escaped assessment. The Hon'ble Apex Court in Raymond Woolen Mills Ltd. Vs. ITO (1999) 236 ITR 34 (SC) held that sufficiency or correctness of the material was not a thing to be considered at the stage of reopening. I find that Assessing Officer has sufficient tangible material in the form of ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 14 information about cash credit in the bank account of assessee and that assessee has not filed return of income for relevant assessment year. Thus, at the time of reopening, prima facie, there was a sufficient tangible material for reopening of the case. Thus, I do not find any merit in the ground of appeal corresponding raised by assessee. Ground No.1 of assessee is dismissed. 15. Ground No.2 and 3 relate to addition on account of unexplained money under section 69A and unexplained investment under section 69 of the Act on account of bank accounts as recorded above, that case of assessee was reopened on the basis of AIR information that assessee deposited huge cash in his bank accounts, since no return of income was filed by assessee either under section 139 or in response to 148 of the Act. The Assessing Officer obtained information from banker of assessee about various credit in the bank accounts maintained by assessee. The banker of the assessee informed to Assessing Officer about cash deposit of Rs.43.99 lakh and other credit of Rs.1,70,507/-. Thus total aggregating of Rs.45.96 lakh as no explanation or submission was made by assessee about source of such credit / cash deposit, during assessment, the Assessing Officer added the entire amount. Before Ld. CIT(A) assessee took plea that assessee is engaged in business of discounting cheque and earning only commission income. The Ld. CIT(A) confirmed the action of Assessing Officer in making addition by taking view th9at assessee has not provided the list of beneficiary for further investigation. On perusal of bank statements, copy of such statement filed before the Bench would reveal as and when there was cash deposited immediately, therefore a debit noted by way of clearance. Thus, it seems that ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 15 the assessee was engaged in systematic activities. Yet the assessee has not disclosed the name of beneficiary if the assessee was providing facility of cheque discounting and not fully discharged the onus lies upon him either during assessment proceedings or during remand proceedings or in hearing before Ld. CIT(A). Yet it is settled position under law that entire transaction / credit entry in bank can never be the income of assessee particularly when the bank account demonstrate that amount deposited in the bank was immediately debited by way of clearance, only a reasonable estimation of income would be sufficient to avoid possibility of revenue leakage. I find that assessee has claimed that he is engaged in business of cheque discounting and such fact is not accepted by lower authorities. Considering the ratio of decision of Hon’ble jurisdictional High Court in case of CIT vs. Samir Synthetics Mill (2010) 326 ITR 410 (Guj) when assessee could not even reconcile production, sales and closing stock although specific opportunity was provided by Assessing Officer, addition was justified on account of suppression of sale consideration but only to the extent of profit. Thus, adopting the same principle, a reasonable percentage of income can be treated as income of the assessee and not all entire transactions. Thus, keeping in view all the fact and circumstances, I find that total transactions in assessee’s bank accounts of Rs.45,69,722/- a reasonable estimation of 10% would be sufficient to avoid possibility of revenue leakage. 16. The Ld. AR for the assessee, in her various submissions, by giving example of peak balance submitted that brush aside Rs.1,95,606/- could be treated as peak balance. I find that stock theory of peak balance is not fully applicable ITA No.623/SRT/2024 (A.Y 12-13) Kailashnath A Dube 16 on the facts of the present case. Therefore, considering overall facts and circumstances, I have estimated the income of assessee at 10% of cash credit of Rs. 43,99,215/- as well as of other credit of Rs. 1.70 lac which would be reasonable and sufficient. Hence, ground No. 2 and 3 raised by assessee is partly allowed. 17. In the result, the appeal of the assessee is partly allowed. Order pronounced in open court on 29th November, 2024. Sd/- (PAWAN SINGH) [Ɋाियक सद˟ JUDICIAL MEMBER] सूरत /Surat, Dated: 29/11/2024 *Ranjan आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to :  अपीलाथȸ/ The Appellant  Ĥ×यथȸ/ The Respondent  आयकर आयुÈत/ CIT  ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, सूरत/ DR, ITAT, SURAT  गाड[ फाईल/ Guard File By order/आदेश से, सहायक पंजीकार आयकर अपीलȣय अͬधकरण, सूरत "