ITAT directs to verify Peak Credits in Undisclosed Bank Account of ICICI Bank [Read Order]

The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) directed to verify the peak credits in an undisclosed bank account of ICICI Bank.

The Assessee Gulshan Grover is engaged in the business of repair of electronic goods, such as FM radio, FM player, DVD player, DTH and miscellaneous Chinese goods which gets damaged during transit from China to India with some of the traders of Chinese goods in Lajpat Rai Market.

The assessee was maintaining a savings bank account with ICICI Bank during the period under consideration. While filing the return, the trading transactions reflected in the said ICICI bank was not considered by the assessee. Hence, the assessee disclosed the net effect of the trading transactions of ICICI Bank in Income Declaration Scheme,2016 on 30.09.2016 and paid due taxes thereon.

Based on the information received by the AO regarding savings bank account maintained by the assessee in ICICI Bank, the assessment of the assessee were sought to be reopened for AY 2010- 11 by issuance of notice under Section 148 of the Income Tax Act on the ground that there was cash deposit made in the bank account by the assessee.

This information was admittedly received by the ld AO as part of intimation for non-filing of Income Tax Return for AY 2010-11 through NMS cycle for PAN AEFPG5786G. The assessee did not cooperate with the AO by furnishing the details by explaining the source for cash deposits.

Accordingly the AO made the addition of ₹84,84,075/- as unexplained cash deposit while completing the reassessment proceedings .

Aggrieved by the order the assessee filed appeal before the CIT(A), who dismissed the appeal.Hence the assessee filed another appeal before the tribunal.

Manpreet Singh, Counsel for the assessee submitted that assessee filed the workings of peak credit in the said undisclosed bank account on the premise that there was huge cash withdrawals made from the very same undisclosed bank account and cash deposit made thereon and in that scenario, only peak credit thereon should be brought to tax.

R. S. Rathore, Counsel for Revenue supported the order of lower authorities.

After reviewing the facts the ITAT bench of Amit Shukla, (Judicial Member) and M. Balaganesh, (Accountant Member) observed that “the peak credit working requires factual verification by the  AO. Hence, it is appropriate to restore this issue to the file of the AO for verification of the peak credit workings and bring to tax only the peak credit as undisclosed income of the assessee”.

To Read the full text of the Order CLICK HERE

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