1. Search Case laws by Section / Act / Rule — now available beyond Income Tax. GST and Other Laws Available
2. New: “In Favour Of” filter added in Case Laws.
Try both these filters in Case Laws →
TaxTMI Login
🚀 New: Section-Wise Filter ✕
Just a moment...
1. Search Case laws by Section / Act / Rule — now available beyond Income Tax. GST and Other Laws Available
2. New: “In Favour Of” filter added in Case Laws.
Try both these filters in Case Laws →
Press 'Enter' to add multiple search terms. Rules for Better Search
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
<h1>High Court upholds Tribunal decision, emphasizing burden of proof on tax authorities in assessing unexplained income transactions.</h1> The High Court upheld the Tribunal's decision, dismissing the Tax Appeal as the Assessing Officer failed to conduct necessary inquiries into the lenders' ... Unexplained cash credit u/s. 68 - explanation to prove the source of the source - Held that:- The assessee had produced all details of advances made by the said lenders. The transfers were made through banking channels. Thus, the assessee had established the identity of the lenders, the genunuiness of the transaction and creditworthiness of the lenders. - Decided in favour of assessee Issues:1. Addition of Rs. 1.20 crores under section 68 of the Income Tax Act2. Disallowance of interest expenditure of Rs. 7.06 lacsAnalysis:Issue 1: Addition of Rs. 1.20 crores under section 68 of the Income Tax ActThe Assessing Officer made an addition of Rs. 1.20 crores under section 68 of the Income Tax Act during the assessment proceedings for the assessment year 2009-10. This addition was based on advances made by various individuals to the assessee. Despite the assessee providing details of the lenders, their PAN card numbers, and evidence of transactions through banking channels, the Assessing Officer treated the deposits as unexplained due to doubts regarding the creditworthiness of the lenders.Issue 2: Disallowance of interest expenditure of Rs. 7.06 lacsConsequently, the Assessing Officer also disallowed interest expenditure of Rs. 7.06 lacs. However, upon reaching the Tribunal, it was observed that the Assessing Officer had not conducted necessary inquiries into the lenders' creditworthiness. The Tribunal highlighted that the Assessing Officer was essentially asking the assessee to prove the source of the source, which was not justified in this case.Upon reviewing the records, it was evident that the assessee had provided all relevant details regarding the advances from the lenders, with transactions conducted through banking channels. This established the identity of the lenders, the genuineness of the transactions, and the creditworthiness of the lenders. Consequently, the Tribunal found no merit in the additions made by the Assessing Officer and dismissed the Tax Appeal, as no question of law was deemed to arise in this matter.In conclusion, the High Court upheld the Tribunal's decision, emphasizing that the assessee had sufficiently proven the legitimacy of the transactions and the creditworthiness of the lenders. The judgment reaffirmed the importance of proper assessment procedures and the burden of proof lying with the tax authorities to conduct thorough inquiries before making additions based on unexplained income.
TaxTMI 
TaxTMI 
