INCOME TAX ACT, 1961

Section 69

Income from undisclosed sources - Addition under section 69 - Addition on account of cash deposits - Application of peak theory

AO noticed that assessee had deposited cash in his savings bank account. It was explained by assessee that he had not deposited the said amount in his savings bank account. He had also furnished the bank account opening for savings bank account. In reply to notice under section 133(6), bank had stated that this said controversial bank account was opened and also furnished bank account of opening form, which clearly depicts the photograph of the assessee and his signature. Further, the copy of PAN card of the assessee was furnished by bank which was submitted by assessee as the supporting document to open the bank account in ICICI Bank. In view of this fact, AO added the cash deposit in the bank account in the hand of assessee under section 69. Held: Income was being considered as cash deposits in the hands of the assessee. AO had made addition of total cash deposits, however in such cases of cash deposits, only peak balance was being considered. Accordingly, addition to this peak balance was confirmed. There was opening cash deposit of Rs. 2,13,747 on 04-04-2007, hence the initial cash deposit was also not unexplained. This addition is being confirmed on technical ground as there is a dispute between assessee and Mr. K that bank account was opened by Mr. K and not by assessee. Thus, appeal filed by assessee was partly allowed.

REFERRED :

FAVOUR : Partly in assessee's favour

A.Y. : 2008-09

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