Case Law Details
Brief Facts of the Case
During assessment the AO unearthed an undisclosed bank account maintained by the assessee. The assessee was asked to explain the source of credit in the Bank account but no explanation was furnished. The A.O. issued show cause notice on 19-11-2009 requiring the assessee to show cause why the credit of Rs.17,45,468/- in the said Bank account be not treated as unexplained money u/s. 69A of the Act. It was submitted that the assessee was doing business of sale and purchase of food-grains in the market yard and was under the impression that this was agricultural income and exempt from tax. It was accepted that the transactions in the bank account pertained to trading and it was offered that 3% of such turnover be considered as income. This explanation of the assessee did not found favour with the A.O and he therefore, made addition of peak credit in the bank account appearing on 22-3-2007 which was Rs.9,62,184/- as unexplained money u/s. 69A. A.O. also made addition of Rs.87,273/- on account of profits calculated at 5% of total deposits in the bank during the year amounting to Rs.17,45,468/- treating the deposits as turnover.
Question of Law
Whether an addition can be made for peak credits from an undisclosed bank accounts after rejecting the books of accounts or examining the records?
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