Loading judgment…
Facts
Cross appeals were filed by the assessee and the Revenue against an order concerning assessment year 2019-20. The Revenue's appeal was filed with a delay of 34 days, which was condoned. The core issue involved the determination of peak cash credit related to immovable property transactions and unaccounted income.
Held
The Tribunal noted that the assessee had voluntarily admitted additional income. The CIT(A) had directed the Assessing Officer to determine the correct peak cash credit for assessment years 2009-10 to 2019-20 and to add the remaining amount of admitted income. The Tribunal found no infirmity in this direction.
Key Issues
Whether the CIT(A) was justified in directing the Assessing Officer to adopt the correct peak credit in the facts and circumstances of the case for the assessment year 2019-20.
Sections Cited
132, 143(3)
AI-generated summary — verify with the full judgment below
Before: Shri Inturi Rama Rao & Shri S.S. Viswanethra Ravi
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
Both the cross appeals filed by the assessee as well as the Revenue are directed against the order dated 20.12.2024 passed by the ld. Commissioner of Income Tax (Appeals) 20, Chennai for the assessment year 2019-20.
Since, the facts are identical and issues are common, for the sake of convenience both the appeals were heard together and are being disposed off, by this consolidated order.
We find that this appeal is filed with a delay of 34 days. The DCIT, CC 3(3), Chennai filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on an examination of the said affidavit, in the interest of justice, we condone the delay and admit the appeal for adjudication.
We find the Appellant-Revenue raised 3 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in direct the Assessing Officer to adopt the correct peak credit in the facts and circumstances of the case.
6. At the outset, we note that the assessee is a firm filed return of income on 29-7-2020 declaring a total income of ₹.3,65,380/-. Thereafter, a search under section 132 of the Income Tax Act, 1961 [“Act” in short] was conducted on 01.11.2018 and in response to the notice issued by the Assessing Officer, the assessee filed return of income declaring the same income as declared on 29.07.2020. According to the Assessing Officer, the assessee has not disclosed an amount of ₹.2,44,00,000/- and added the same on account of unaccounted income to the total income of the assessee vide his order dated 31.07.2021 passed under section 143(3) of the Act. As aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the ld. CIT(A). We find that the ld. CIT(A) reproduced the issue raised by the assessee and submissions made thereon in Page number 3 to 7 of impugned order. The ld. CIT(A), considering the same, discussed the issue in detail and by following his order for assessment year 2019-20, directed the Assessing Officer to adopt peak credit, the relevant version of which is reproduced herein below for ready reference: In the present case, the appellant had admitted an additional income on the basis of certain documents and loose sheets seized in the statement recorded u/s 132(4) of the Act during the course of search on 02.11.2018. Subsequently, the appellant had also made voluntary admission after two months vide his sworn statement dated 29.12.2018 for the same amount by furnishing the person/entity-wise unaccounted income. Thus, the above cited decision in the case of PCIT v. Avinash Kumar Setia (supra) is squarely applicable in the case of the appellant. 6.2.9. On the basis of above discussion, I am of the opinion that the appellant had voluntarily admitted an additional income on account of findings in the course of search that he and his family members had invested in number of properties over a period of time and received and also paid on- money on account of transaction in immovable property. This is further evidenced by the statement recorded from the employees such as Shri C P Jaishankar on the dated of search. Further, it is also noted that the appellant had used the bank accounts opened in the name of employees and their relatives to deposit and withdraw the excess cash arising on account of the transactions in the immovable properties. This is evident from the nature of cash deposits and withdrawals in the said bank accounts of employees and their relatives maintained by the appellant. On the basis of the findings as above, it can be concluded that the appellant is involved in receipt and payment of on-money which was utilized in the transactions related to immovable properties over a period of years and the excess unutilized cash is deposited in the bank accounts maintained by the appellant in the name of employees and their relatives. On these facts and circumstances, it is fair to consider the peak cash credit arising from the bank accounts for the AY 2009-10 to 2019-20 as part of the unaccounted income received from the immovable property transactions and the same to be considered as included in the disclosure made by the appellant of Rs.6.92 crores (Rs. 10 crores minus Rs.3 crores disclosed on account of forfeiture of advances in the statement dated 29.12.2018) on account of unaccounted investment in the properties. However, it is also observed that the peak cash credit worked out by the appellant was less than the admitted income of Rs.6.92 crores. In this regard, first the AO is directed to verify and arrive at the correct peak cash credit to be taxed from AY 2009-10 to 2019-20 as directed in Paragraph No. 6.1 of this order. Thereafter, after arriving at the correct amount of total peak cash credit arising from the bank accounts for the AY 2009-10 to 2019- 20, only the remaining amount from Rs.6.92 crores of admitted income alone can be added separately as unaccounted income for the year under consideration. It is also observed that, the appellant had offered the entire peak cash credit for the AY 2009-10 to 2019-20 as his income, which will be more than the additional income admitted in his hands of Rs.2.1 crores for the year under consideration which needs no further addition in his hands. While quantifying the addition for the AY 2019-20 in the case of Shri Anand Singhvi, M/s Singhvi Developers and Shri Ashok Chand, the AO is directed to allow the remaining balance of total peak cash credit arrived by the AO minus Rs.2.1 crores on proportionate basis to the additional income offered by Shri Anand Singhvi, M/s Singhvi Developers and Shri Ashok Chand as additional income in their hands on the basis of sworn statement recorded from the appellant which was agreed upon by the respective appellants. Accordingly, this ground raised by the appellant is partly allowed."
7. On careful reading of the above findings of the ld. CIT(A), we note that the ld. CIT(A), considering the facts of the case as well as his order in the case of Shri Lickmi Chand Singhvi for assessment year 2019-20, rightly directed the Assessing Officer to determine the correct peak cash credit to be taxed from AY 2009-10 to 2019-20, and it is justified. Thus, ground Nos. 2 & 3 raised by the Appellant-Revenue are dismissed.
8. In this appeal we find that the assessee raised 8 grounds of appeal amongst which only issue emanates for our consideration as to whether the ld. CIT(A) is justified in directing the Assessing Officer to adopt peak credit in the facts and circumstances of the case.
9. In this regard we find the ld. CIT(A) discussed the issue in detail taking into consideration the submissions of assessee, findings in his order in the case of Shri Lickmi Chand Singhvi for assessment year 2019-20 and directed the Assessing Officer to adopt peak Credit vide para 6.2.9 of impugned order. Further, we note that the Respondent- Revenue raised similar issue in wherein, by following ITAT order in connected batch cases for assessment years 15-16 to 19-20 held that there is no infirmity in the order of ld. CIT(A) in directing the Assessing Officer in adopting peak credit in the aforementioned paras, following the same, we hold that there is no infirmity in the order of the ld. CIT(A) in directing the Assessing Officer to adopt peak credit. Thus, grounds 1 to 8 raised by the assessee are dismissed.
In the result, both appeals of Revenue and the assessee are dismissed Order pronounced on 24th February, 2026 at Chennai.