Case Law Details
Arabinda Konar Vs ITO (ITAT Kolkata)
ITAT held that additions framed on account of undisclosed income being sustained in part is justified, where assessee was required to file complete details of such friends and relatives and also the details of sales but the same has not been done at any stage.
The assessee is claiming that the source of the said deposits i.e. cash and cheque is partly from loans taken from various friends and relatives, partly from sale proceeds of business carried on by him which have been diverted to his bank account and part of the credits is on account of the money taken from relatives and friends to be invested in stock market. Though the assessee was required to file complete details of such friends and relatives and also the details of sales but the same has not been done at any stage.
Under this situation to end the controversy coupled with being fair to both the parties, the only way out left is to sustain the addition only to the extent of peak credit in such bank account. There is no specific detail of the calculation of peak credit from either of the sides and neither it is a case of cash deposits and cash withdrawals for which peak credits theory is perfectly applicable. But keeping in view that the alleged credits in the bank account in the form of cash and cheque have only been utilized for making payment to Techno Shares & Stocks Pvt. Ltd. and the assessee having incurred loss on such trading of shares is evidenced by the financial ledger appearing under the PAN number of the assessee on Form No. 10BB and also accepting the fact that the said cash deposit possibly contains the element of short term loans taken from friends and relatives, past savings, sale proceeds of the trading business and also looking to the fact that the peak credit in the bank account is Rs. 6,36,479/- as on 13.09.2014, we in the interest of justice and being fair to both the parties, sustain an addition of Rs. 8 lakhs to cover up the peak credit balance and other unexplained deposits and delete the remaining additions of Rs. 14,62,538/- and partly allow the grounds raised by the assessee.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
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