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Facts
The assessee filed an appeal against the order for Assessment Year 2011-12. The appeal was filed with a delay of 122 days, which was condoned. The Assessing Officer made an addition of ₹.8,39,938/- on account of peak credit as the assessee had not filed a return and did not respond to notices.
Held
The Tribunal found that while the CIT(A) rightly held the addition based on peak credit, considering the facts and circumstances of the case and the age of the assessment year, only 50% of the peak credit addition determined by the CIT(A) (₹.3,89,125/-) is to be charged to tax.
Key Issues
Whether 50% of the peak credit amount determined by the CIT(A) is sustainable for the assessment year 2011-12, considering the delay in filing and lack of response from the assessee.
Sections Cited
142(1), 129
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Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
Year: 2011-12 Jayavel Manikandan, Vs. The Income Tax Officer, 475/127-C, Angammal Colony, Ward 1(2),Salem. Anna Street, Salem 636 009. [PAN:AUIPM2974K] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri Srikrishna, C.A. (Virtual) ��थ� की ओर से/Respondent by : Dr. M.D. Vijay Kumar, JCIT सुनवाई की तारीख/ Date of hearing : 03.03.2025 घोषणा की तारीख /Date of Pronouncement : 05.03.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 31.05.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2011-12.
2. We find that this appeal is filed with a delay of 122 days. The assessee filed an affidavit for condonation of delay explaining reasons for the said delay and prayed for condonation of that delay. On perusal of the condonation petition and upon hearing both the parties, we find that the reasons explained by the assessee are bonafide and therefore, the delay is condoned and admitted the appeal for adjudication.
At the outset, we note that the assessee is an individual and no return of income filed for the assessment year under consideration. The Assessing Officer received information pertaining to cash deposits made by the assessee in ICICI Bank and also in trading through Multi Commodity Exchange. The Assessing Officer issued notice under section 142(1) of the Income Tax Act, 1961 [“Act” in short], for which, there was no response from the assessee. Thereafter, the Assessing Officer issued notice under section 142(1) r.w.s.129 of the Act, show-cause notice, pre- assessment notice, etc., for which, we find no representation from the assessee before the Assessing Officer, which is reflecting at page 2 of the assessment order. The Assessing Officer, thereby, completed the assessment in the absence of any plausible explanation from the assessee by making addition of ₹.8,39,938/- on account of peak credit taking into consideration the deposits followed by regular withdrawals. The ld. CIT(A) modified the said addition to ₹.7,78,250/- instead of ₹.8,39,938/-.
The ld. AR Shri Srikrishna, CA argued that the addition as sustained by the ld. CIT(A) is not correct and drew our attention to page 1 of the paper book and prayed to adopt net profit rate basing on the past history considering the AY 2008-09 and 2009-10. The ld. AR further drew our attention to page 15 of the paper book in support of his contention to adopt the profit rate.
The ld. DR Dr. M.D. Vijay Kumar, JCIT opposed vehemently and prayed not to consider the submissions of the ld. AR in adopting the profit rate basing on AY 2008-09 and 2009-10. The ld. DR drew our attention to the impugned order and argued that the method adopted by the Assessing Officer and the ld. CIT(A) are reasonable and no interference is required from this Tribunal in modifying the impugned order.
Having heard the ld. AR & the ld. DR and taking into 5. consideration the assessment year 2011-12, which is 14 years old, we do not find force in the argument of the ld. AR for remanding to the file of the Assessing Officer in considering to adopt profit rate taking into account the past history relating to AY 2008-09 & 2009-10. Further, we find the Assessing Officer and the ld. CIT(A) as rightly held, as pointed out by the ld. DR in considering the case of the assessee on account of peak credit, in our opinion, the reasons recorded by the ld. CIT(A), are reasonable, but, however, taking into consideration the facts and circumstances of the case, we are of the opinion that 50% of peak credit figure of ₹.7,78,250/-, as determined by the ld. CIT(A), as reasonable in assessing the total income of the assessee. Therefore, 50% of the peak credit figure i.e., ₹.3,89,125/- is chargeable to tax. Thus, the ground raised by the assessee is partly allowed.
In the result, the appeal filed by the assessee is partly allowed. Order pronounced on 05th March, 2025 at Chennai.