PCIT Vs Rakesh Kumar (Allahabad High Court)
Summary: The Allahabad High Court dismissed the revenue’s appeal filed under Section 260-A of the Income Tax Act, 1961 against the order dated 26.11.2025 passed by the Income Tax Appellate Tribunal, Agra Bench, Agra in ITA No. 437/Agr/2024 for A.Y. 2022-23.
The appeal arose from the ITAT’s decision confirming the order of the Commissioner of Income Tax (Appeals) dated 04.09.2024, whereby additions of Rs. 2,84,42,280/- and Rs. 2,92,02,900/- made under Sections 69A and 69C of the Income Tax Act were deleted.
The revenue challenged the ITAT order by raising a question of law regarding whether the Tribunal was justified in upholding deletion of additions made under Sections 69A and 69C despite alleged incriminating material found during search proceedings and failure of the assessee to explain the nature and source of unexplained money and expenditure.
The revenue also questioned whether the ITAT could apply the principle of peak credit while dealing with additions under Sections 69A and 69C of the Act.
The High Court observed that the CIT(A) had followed the recognised method of peak credit for estimating undisclosed income and found no error in such computation. The Court noted that the additions were not based on any seizure of cash but were founded upon book entries discovered outside the regular books of accounts of the assessee.
