ORDER
BY THE COURT:
This is a reference under s. 256(2) of the IT Act, 1961 at the instance of assessee and on that basis, this Court called reference from Tribunal and the following question of law has been referred for answer by this Court:
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the benefit of peak credit could not be granted to the assessee ?'
2. Brief facts giving rise to this reference are that the assessee, a registered firm, carries on the business of sale and purchase of Kirana goods on whole sale basis. The ITO scrutinised the books of accounts of the assessee-firm and especially the cash book maintained by the assessee-firm. In the cash book, he found that there were entries in the account of 'Haste Khate'. The said credit and debit on account of Haste Khate was posted in the general ledger at p. 67. The ITO was of the view that whenever the assessee found himself hardpressed for money, it used this account as a novel method for introducing or bringing unaccounted money into its business. The total credits and debits in the account of Haste Khate was of Rs. 59,000. The dates on which the amounts have been shown as received and the dates on which the amounts have been shown as paid out are as under :
Credit amount
Date
Debit amount
Date
10,000
20-01-1977
10,000
21-1-1977
11,000
21-01-1977
11,000
27-1-1977
20,000
11-03-1977
20,000
16-3-1977
5,000
03-05-1977
5,000
4-5-1977
3,000
09-11-1977
3,000
2-11-1977
59,000
59,000
3. The ITO observed that the scrutiny of the cash book revealed that the cash was introduced by the assessee whenever he had to incur an expenditure and on the dates when the cash was sufficient enough in the books, the like amounts as were introduced earlier, were withdrawn later on. The assessee was asked to explain these transactions. Assessee submitted a reply that Munim or Gumasta of the assessee-firm had gone for collection outside Satna from various customers. Therefore, this amount was raised by Munim and the same was sent through carrier on various dates. The ITO did not believe this explanation and found that there is no evidence to substantiate this allegation. He observed that if something is deposited in cash book, it is the assessee who was responsible to explain as to who brought the money and when and also on whose behalf. In the absence of cogent explanation, the ITO totalled a sum of deposition in regard to Haste Khate to be the assessee's income from the year of account from the sources not disclosed to the IT Department. Therefore, this amount was added to income and the assessee was taxed. Against this order of the ITO dt. 18th March, 1981, the assessee-firm preferred an appeal before the AAC, who by his order dt. 18th March, 1982, upheld the additions made by the ITO. Hence, the matter was put up before the Tribunal which also affirmed the order of the AAC. The assessee, therefore, made a reference before this Court for calling the question of law and according to the order of this Court, the aforementioned question of law has been referred for answer by this Court.
4. We have heard learned counsel for parties. The fact remains that the assessee's explanation was found untrue by all the lower authorities, this shows only the extent of assessee's credibility and the weakness in the explanation furnished by it. Shri Nema, learned counsel for the assessee, has tried to persuade us with reference to the question that it was to be taken as a peak credit. We fail to understand the theory of peak credit being used in this set of affairs when it is more than apparent that why the assessee-firm deposited sum of Rs. 10,000 on 20th Jan., 1977, and withdrawn it on 21st Jan., 1977, deposited sum of Rs. 11,000 on 21st Jan., 1977, and withdrawn on 27th Jan., 1977; deposited sum of Rs. 20,000 on 1Ith March, 1977, and withdrawn on 16th March, 1977; deposited sum of Rs. 5,000 on 3rd May, 1977, and withdrawn it on 4th May, 1977; and, deposited a sum of Rs. 3,000 on 9th Nov., 1977, and withdrawn the same on 2nd Nov., 1977. This statement of crediting and debiting itself shows that there is no question of peak credit involved in the matter. It is only a matter of jugglery devised by the assessee to somehow evade the income-tax Therefore, the authorities below have rightly approached the matter and we do not find any ground to interfere. Hence, the reference is answered against the assessee and in favour of Revenue.