Income Tax Appellate Tribunal “D” Bench, Chennai
ITA No.1232/Mds/2014
Assessment Year : 2010-11
B. Jenson Thanaraj (Appellant) vs ACIT (Respondent)
Date of Order: 15-05-2015

Question to be decided:
The issue for consideration was with regard to addition sustained by the CIT(Appeals) to the extent of Rs. 20,27,531/- as unexplained cash credit.

Facts of the Case:
During the course of the assessment proceedings, the Assessing Officer found that a deposit of Rs. 32,39,731/- was made on various dates in the Savings Bank Account of the assessee held in Axis Bank. The assessee explained before the Assessing Officer that his savings for the last 12 years and gift received from his mother and father-in-law on various occasions were deposited on various dates in Axis Bank account and the amount deposited in Axis Bank was withdrawn at Tuticorin. The amount withdrawn was also re-deposited at Tuticorin and again withdrawn at Chennai. Therefore the very same amount was withdrawn and used for deposit on various dates. However, the Assessing Officer disallowed the amount as unexplained cash credit.

Held by CIT(Appeals):
On appeal by the assessee, the CIT(Appeals), however, directed the Assessing Officer to take only peak credit to the extent of Rs. 20,27,531/-.

Held:
Though the ITAT did not believe the statement of the assessee that he was withdrawing money from Chennai and re-depositing at Tuticorin, it upheld the CIT(A) order directing the Assessing Officer to take only peak credit instead of total cash deposits in the bank account.

ITAT observed as under,

“ ..... it is not known why this amount was withdrawn from Chennai and taken to Tuticorin for re-deposit. Similarly, the money from the very same S.B. Account was withdrawn from Tuticorin and was used to deposit in Chennai. Though this kind of statement is unbelievable,

the CIT(Appeals) found that the money withdrawn would be available for subsequent deposit, therefore, directed the Assessing Officer to take only peak credit. Therefore, the assessee cannot have any grievance on the direction given by the CIT(Appeals) to take peak credit.”

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