VANDANA PUNIA,HISAR vs. INCOME TAX OFFICER, WARD -7(3), JAIPUR, JAIPUR

During the course of hearing, the ld. AR taken us through the order of ld. CIT(A) and it was submitted that as against addition of Rs.13,45,600/- made by the AO, the ld. CIT(A) reduced the addition to Rs. 5,16,696/- applying the peak credit theory. It was submitted that while applying peak credit theory, the ld. CIT(A) has not allowed benefit of source of such peak credit theory which has been explained by the 2 Vandana Punia, Jaipur Vs. ITO, Ward 7(3), Jaipur assessee by way of cash withdrawal of Rs. 5,00,000/- on 13.01.2011 from the same bank account which was not used anywhere else and was available at the beginning of the financial year as cash in hand. It was further submitted that the assessee has filed her ITR declaring total income of Rs. 1,88,370/- for A.Y 2012-13 in respect of which telescoping benefit has also not been allowed by the ld CIT(A).

It was further submitted that assessee had regular source of income and has filed her return of income for A.Y. 2009-10 declaring income of Rs. 2,93,180/-. Besides that, the assessee has saved money from regular household expenditure which was kept to be used in case of any family requirement and she belongs to a reputed family and had thus kept certain cash in hand which was deposited and not used anywhere else nor the ld AO or ld CIT(A) brought any adverse material on record. In support, reliance was placed on the Jaipur Benches decision in case of Shri Rajendra Singh vs ITO, Ward-3, Bharatpur (ITA No. 416/JP/2017) where cash withdrawal made in the month of March 2013 was taken as source of opening cash in hand as on 1st April of 2013 and the assessee’s explanation regarding source of cash deposit from opening cash in hand was accepted.

Per contra, the ld. DR submitted that the ld. CIT(A) has already allowed the benefit of peak credit to the assessee and has given sufficient relief amounting to Rs. 8,28,904/- out of total addition of Rs 13,45,600/-. It was further submitted that the assessee has failed to explain the corresponding deposit made prior to withdrawal of Rs 5,00,000/- on 13.01.20111 and in light of the same, the ld CIT(A) has rightly not allowed the benefit while applying the peak credit theory. The ld. DR has thus

We have heard the rival contentions and perused the material available on record. It is a settled legal proposition that onus of proving the source of a sum of money is on the assessee and the latter has to come forward with a satisfactory explanation and in absence thereof, it is open to the Revenue authorities to hold the same as income in the hands of the assessee. In the instant case, the ld CIT(A) has accepted the explanation of the assessee and returned a finding that earlier cash withdrawn can be treated as explained source of cash deposit in the same bank account and at the same time, cash withdrawal of Rs 5,00,000/- on 13.01.2011, which is also an admitted fact, has not been accepted and benefit thereof has not been given while working out the peak credit. The reason for such non-acceptance has been stated to be non-submission of explanation on part of the assessee in respect of corresponding deposit made prior to such withdrawal. In this regard, on perusal of the assessee’s bank statement, we find that there is a cash deposit of Rs 5,00,000/- on 12.11.2010 which was available with the assessee as per her bank statement and which was then withdrawn on 13.01.2011. It is noted that the claim of the assessee regarding frequent cash withdrawal and deposit for the purposes of availing OD limit has been accepted by the AO in his remand report for the year under consideration and duly considered and accepted by the ld CIT(A) while working out the peak credit. Therefore, where similar transactions of deposits and withdrawals exist in the previous financial year, the explanation of the assessee duly supported by her bank statements cannot be disputed