HEMANT TULSIDAS PATEL,,AURANGABAD vs. INCOME TAX OFFICER,, AURANGABAD

The assessee has raised the following grounds of appeal:- 1. The assessee had filed his IT return by showing the taxable income of Rs.103,428/- as Salary & Other income as on 02.08.2010. 2. The case is selected for the scrutiny assessment u/s 143(1) under CASS and notice properly served to the assessee. The scrutiny assessment completed after making addition which was null and void.

The appeal was fixed for hearing and notice was served through registered post with Ack. Due on various dates and even the acknowledgement of service is available on record, but none has appeared on any of the dates fixed for hearing. Hence the appeal is heard ex-parte.

The only issue raised in the present appeal is against addition made of ₹ 2,80,000/-. The assessee was salaried employee and the case of assessee was selected for scrutiny. During the course of assessment proceedings, the Assessing Officer noted that the assessee had invested ₹ 16,79,249/- in share transactions out of cash deposits of ₹ 15,97,500/-. The Assessing Officer sought explanation of source of said deposits. The assessee expressed his inability to explain the same. However, he requested to consider peak credit of above deposits. The Assessing Officer noted that peak credits could not be considered, as there were no cash withdrawals from the bank account of the assessee, which were deposited in bank account in cash; amount was utilized for purchase of shares, hence addition of ₹ 15,97,500/-.

The CIT(A) notes that the assessee has failed to furnish any cash flow or proof of any loan allegedly taken from his father and his brother and their identity & creditworthiness of the person, was not proved and as there was no cash withdrawals from the bank, theory of peak credit was not accepted and addition of ₹ 15,97,500/- was confirmed in the hands of assessee.

Despite several notices given to the assessee, none appeared on behalf of assessee nor any application was moved for adjournment. The service of notice is also done upon the assessee as the acknowledgement cards are available on record.

In such circumstances, the order is passed ex-parte the assessee. The assessee has failed to prove the theory of peak credit and in the absence of the same, where against cash deposits there are no cash withdrawals, such peak credit theory cannot be accepted and hence, the addition of ₹ 15,97,500/- is upheld. The grounds of appeal raised by assessee are thus, dismissed.

In the result, appeal of assessee is dismissed.