SRI SWAPAN ADHIKARY,BURDWAN vs. ITO,WARD 1(1),KOL., BURDWAN

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ITA 335/KOL/2017Status: DisposedITAT Kolkata08 November 20174 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the addition should be restricted to the combined peak credit balance of the two undisclosed bank accounts, not the sum of individual peak balances. The contention that the accounts were joint and should be considered proportionately was rejected due to lack of evidence.

What were the facts?

The Assessing Officer (AO) added Rs. 16,51,539/- to the assessee's income based on peak credit balances in two undisclosed bank accounts. The assessee contended that these deposits were sale proceeds from his potato trading business, but failed to provide supporting evidence.

What were the issues?

Whether undisclosed bank deposits can be treated as income, and if so, whether the addition should be based on individual or combined peak credit balances of multiple accounts.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH (SMC

Before: Hon’ble Shri P.M. Jagtap]

order : November 08, 2017 ORDER This appeal filed by the assessee is directed against the order of Ld. CIT (Appeals) Burdwan dated 29.11.2016 and the solitary issue involved therein relates to the addition of Rs. 16,51,539/- made by the A.O. and confirmed by the Ld. CIT (A) on account of peak credits of the two undisclosed bank accounts of the assessee by treating the same as undisclosed income of the assessee.

2.

The assessee in the present case is an individual who is engaged in the business of trading of potato. The return of income for the year under consideration was filed by him on 28.10.2010 declaring a total income of Rs. 1,82,200/-. During the course of assessment proceedings, it was noticed by the A.O. that the assessee has 2 A.Y. 2006-07 Swapan Adhikary maintained two bank accounts with AXIS Bank and the same were not disclosed by the assessee in his books of account. The A.O. also noticed that there were substantial cash deposits made by the assessee in the said account. Since the assessee could not offer any satisfactory explanation as regards the source of the said deposits made in his two undisclosed bank accounts, the addition of Rs. 16,51,539/- was made by the A.O. to the total income of the assessee on the basis of peak credit balances of Rs. 14,83,125/- and Rs. 1,68,414/- appearing in the said two bank accounts during the year under consideration.

3.

The addition of Rs. 16,51,539/- made by the A.O. on the basis of peak credit balances appearing in his two undisclosed bank accounts was challenged by the assessee in the appeal filed before the Ld. CIT (A). During the course of appellate proceedings before the Ld. CIT (A), it was contended on behalf of the assessee that the deposits found to be made in his two bank accounts represented sale proceeds of his regular business of trading of potato and therefore addition, if any, could be made on this issue only to the extent of gross profit of the said turnover. The Ld. CIT (A) did not find merit in this contention of the assessee in the absence of any documentary evidence to support and substantiate the same and in proceeded to confirm the addition made by the A.O. on the basis of peak credit balances. Aggrieved by the order of the Ld. CIT (A), the assessee has preferred this appeal before the Tribunal.

4.

I have heard the arguments of both the sides on this issue and also perused the relevant material available on record. Although the

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