NIRAJAN LAL SAINI,JAIPUR vs. ITO, ALWAR

PER SHRI KUL BHARAT, J.M.

This appeal by the assessee is directed against the order of Ld. CIT(A), Alwar dated 04.11.2016 pertaining to A.Y. 2010-11. The assessee has raised the following grounds of appeal :-

“ 1. The ld. CIT (A) has erred on facts and in law in confirming the addition of Rs. 75,99,501/- by holding that the deposit to the extent of Rs. 75,99,501/- in the bank account of the assessee remains unverified. He has further erred in confirming the addition even when the AO in the remand report has accepted the source of deposit in the bank account out of the sale proceeds of vegetables fruits, etc.

2 ITA No. 92/JP/2017 Shri Niranjan Lal Saini.

75,99,501/- by holding that the deposit to the extent of Rs. 75,99,501/- in the

bank account of the assessee remained unverified.

was reopened and the assessment under section 148 read with section 144 of

the Income Tax Act, 1961 (hereinafter referred to as the Act) was framed vide order dated 8th March, 2016. While framing the assessment, the AO made

addition of Rs. 1,07,64,551/- on account of cash deposited in the bank

account of the assessee. Aggrieved by this, the assessee preferred an appeal

before ld. CIT (A), who after considering the submissions, confirmed the

addition to the extent of Rs. 75,99,501/-.

the written brief. He contended that in the remand report so called, the AO

had verified all the transactions and the ld. CIT (A) was not justified in not

accepting the remand report. He submitted alternatively that the ld. CIT (A)

ought to have applied peak credit theory. In support, he has relied on the

judgments of Hon’ble Rajasthan High Court rendered in the cases of Sind

3 ITA No. 92/JP/2017 Shri Niranjan Lal Saini.

Medical Stores vs. CIT (2015) 117 DTR 78 (Raj.), CIT vs. Ishwardass Mutha,

270 ITR 597 (Raj.), judgment of Hon’ble Andhra Pradesh High Court rendered

in the case of CIT vs. Purushottam Jhawar (2014) 220 Taxman 74 (AP). The

ld. Counsel also placed reliance on the decision of Coordinate Bench of the

Tribunal in the case of ITO vs. Mahesh Kumar Jayantilal Vora, 3 SOT 96

(Rajkot) in support of the contention that in the case of unexplained deposit,

only peak credits should be taken as by aggregating the deposits, they tends

to get taxed twice.

5.1. On the contrary, the ld. D/R opposed the submissions and placed

reliance on the judgment of the Hon’ble Punjab & Haryana High Court

rendered in the case of Dayal Singh & Sons vs. CIT,335 ITR 90 (P&H).

5.2. We have heard rival contentions, perused the material available on

record and gone through the orders of the authorities below. We find that in

remand report, the AO has stated that the assessee has deposited cash out of

sales of vegetables, fruits etc. during the assessment year 2009-10 in bank

account. There is no evidence stating party-wise purchases. In the absence

of the same, we are unable to accept the contention of the ld. Counsel for the

assessee that all the deposits are explained. However, we find that there are

both deposits and withdrawals from the bank account. Under these facts,

respectfully following the judgment of the Hon’ble Rajasthan High Court in the

case of Sind Medical Stores vs. CIT (supra), we direct the AO to work out the

4 ITA No. 92/JP/2017 Shri Niranjan Lal Saini.

peak credit and make addition on the peak credit. The ground raised is allowed for statistical purposes. 6. In the result, appeal of the assessee is allowed for statistical purposes in terms of the direction herein above.

Order pronounced in the open court on 10 /03/2017.

Sd/- Sd/-p ¼foØe flag ;kno½ ¼dqy Hkkjr ½ (Vikram Singh Yadav) (Kul Bharat) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 10 /03/2017. d/ आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Niranjan Lal Saini, Alwar. 2. izR;FkhZ@ The Respondent- The ITO Ward 1(1), Alwar. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File {ITA No. 92/JP/2017}

vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत