HC : Sets-aside ITAT order; Denies ‘Peak credit’ benefit as deposits remain unexplained

Delhi HC sets aside ITAT order, rejects application of ‘peak credit' principle in respect of unexplained source of deposit and corresponding outgo; While assessee-individual admitted to being an accommodation entry provider, ITAT had for relevant AY 1995-96, restricted the additions u/s. 68 to extent of peak credit worked out by assessee, by observing that the additions could not be made twice, once on the basis of cash deposits and again on the basis of cheque transactions; HC lays down the  legal position in respect of an accommodation entry provider seeking the benefit of 'peak credit', rules that “if the Assessee as a self-confessed accommodation entry provider wanted to avail the benefit of the 'peak credit', he had to make a clean breast of all the facts within his knowledge concerning the credit entries in the accounts. He has to explain with sufficient detail the source of all the deposits in his accounts as well as the corresponding destination of all payments from the accounts.”; As assessee was unable to explain the source of all deposits in his accounts or the ultimate destination of all outgoes therefrom, HC refuses to extend benefit of ‘peak credit’ while relying on Allahabad HC ruling in Bhaiyalal Shyam Bihari; Restoring the assessment order, HC remarks that “ITAT went merely on the basis of accountancy, overlooking the settled legal position that peak credit is not applicable where deposits remain unexplained u/s. 68”:HC