PIYUSH PODDAR Vs. THE COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The subject matter of challenge in this appeal is a judgment and order dated 7th Aug., 2014 by which the learned Tribunal allowed an appeal preferred by the revenue against an order of the CIT(A). By the order, the CIT (A) had reduced the tax liability of the assessee to a sum of Rs. 16,36,060.00 from the original sum of Rs. 6,30,89,413/-. Thus, the relief granted to the assessee was for a sum of Rs. 6,14,53,353/-. Aggrieved by the order of the Tribunal, the assessee has come up in appeal.

(2.) Mr. Poddar, learned Senior Advocate appearing on behalf of the assessee, submitted that the Tribunal erred in not applying the peak credit theory to the case of the assessee. He submitted that in this case the opening balance as per the bank statement was a sum of Rs. 12 lakhs. If the aforesaid sum of Rs. 12 lakhs is to be treated as an unexplained entry, then the sum of Rs. 12 lakhs may be taxed but that becomes the real income of the assessee on the basis whereof the further transactions can be explained and that is how all further transactions can be taken care of by applying the peak credit theory to the extent of Rs. 12 lakhs and in case it is found that the peak credit is exceeding a sum of Rs. 12 lakhs, then further addition to the sum of Rs. 12 lakhs can be made. He, in support of his submission, relied on a judgment of the Madras High Court in the case of S. Kuppuswami Mudaliar Vs. Commissioner of Income-Tax, Madras, reported in (1964) 51 ITR 757, wherein the following view was expressed:

(3.) The aforesaid view of the Madras High Court was affirmed by the Apex Court in the case of Anantharam Veerasinsghaiah and Co. Vs. Commissioner of Income Tax, A.P., reported in (1980) 1213 ITR 457 (SC), wherein the following views were expressed: