Case Law Analysis
|Income Tax Appellate Tribunal
Peak Theory Applied to Digital Books | Only Peak Negative Cash Balance May Be Added Under Section 69A IT Act: ITAT Delhi
The ITAT Delhi has ruled that negative cash balances in digital accounting records cannot be aggregated as unexplained income under Section 69A. Only the highest single negative balance - if substantiated - may be considered, preventing automatic tax additions from system errors or duplicate entries. This protects businesses from punitive assessments based on flawed digital data and clarifies the limits of the Peak Theory in modern bookkeeping contexts.