SH. YATI GARG,NEW DELHI vs. ITO, NEW DELHI

Brief facts of the case are that assessee had filed return declaring an income of Rs. 1,51,652/-. During the course of assessment proceedings the AO show caused the assessee on the basis of AIR information that he was maintaining a bank account no. 3072000101207209 with the Punjab National Bank, Rani Bagh, Delhi in which most of the credit entries were in cash. The assessee explained that regarding retail trade of assessee’s HUF, for which an account in Punjab National Bank, Rani Bagh, Delhi was maintained in the name of Yati Garg, being karta of HUF, often used to go out of Delhi to collect the consideration in lieu of retail sale made and deposited them in above said bank a/c there. It was further explained that whenever the assessee went to collect the consideration, he also carried some money from his house in order to meet out travelling, lodging & fooding expenses and surplus of above carried money was also deposited in above said bank account there. The AO did not accept the assessee’s contention. The AO pointed o0ut that in AY 2008-09 addition amounting to Rs. 23,12,875/- was also made on the same grounds. He made addition of Rs. 42,32,108/- in respect of cash deposit in his bank a/c.

Ld. CIT(A) dismissed the assessee’s appeal.

That without prejudice, even on presuming these credits as un - explained, the addition should not exceed by the figure of peak of such credit.

That no interest U/s. 234 A & 234 B should have been levied. Without prejudice, in any case, the calculations are excessive and erroneous.” 5. First we take up ground no. 4. At the time of hearing, ld. counsel for the assessee filed before us copy of Tribunal’s order in assessee’s own case for AY 2008-09, wherein the Tribunal has directed to make the addition of peak credit only.Ld. counsel submitted that facts being identical, similar directions may be given for current assessment year.

We have considered the rival submissions and have perused the record of the case. As noted earlier, the assessee has made the addition on the same line as was done in AY 2008-09. We find that in AY 2008-09 Tribunal in paras 5 & 6 has observed as under:

Since admittedly, there was a deposit of Rs.23,12,875/- during the Financial Year to the bank account of the assessee which was deposited in salary amounts of thousands on various dates, then it cannot be justified if entire amount of deposits during the year is considered as income in the hands of assessee. Respectfully following the above referred decisions, specially the decision of Hon'ble Jurisdictional High Court in the case of Commissioner of Income Tax vs Kulwant Rai (supra) and decision of Coordinate Bench of Delhi in the case of ITO vs Hari Shankar (supra), we hold that in this situation, only the peak credit can be taken as income out of these deposits made during the year to the bank account of the assessee. Accordingly, in view of above, ground no. 4 of the assessee is allowed with this direction to the Assessing Officer that the Assessing Officer shall take only peak credit as income of the assessee out of these deposits after affording due opportunity of hearing to the assessee. Finally, ground no 4 of the assessee is allowed with the direction to the Assessing Officer as indicated above.

Facts being identical and no new fact having been brought to our notice by the department to take a contrary view, respectfully following the decision of the Tribunal for AY 2008-09, we direct the AO to make the addition of only peak credit as income of the assessee out of these deposits after affording due opportunity of hearing to the assessee. We order accordingly.

As we have allowed ground no. 4 for statistical purposes, other grounds raised by the assessee have become infructuous.

In the result, assessee’s appeal stands allowed for statistical purposes only.