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of <h1>ITAT dismisses Revenue appeal on sections 68/69A additions for unexplained cash credits lacking evidence</h1> <h3>Income Tax Officer, New Delhi. Versus Anil Kumar Bhakkar</h3> Income Tax Officer, New Delhi. Versus Anil Kumar Bhakkar - TMI ISSUES: Whether unexplained cash credit additions under section 68 of the Income Tax Act, 1961 can be sustained solely on the basis of an abnormal increase in cash deposits during the demonetization period without rejection of books of account or evidence of fabricated sales.Whether the Assessing Officer can make additions under section 68 without disproving the genuineness of sales or rejecting the books of account under section 145(3) of the Act.What is the burden of proof on the assessee and the Assessing Officer regarding unexplained cash credits under section 68. RULINGS / HOLDINGS: The addition of Rs. 1,14,30,000/- as unexplained cash credit under section 68 was deleted because the Assessing Officer did not reject the books of account nor pointed out any defect or inconsistency in the cash account, stock, purchases, or sales, and failed to bring any credible evidence that the cash sales were fabricated or non-genuine.The Assessing Officer cannot sustain additions under section 68 merely on the basis of a 'huge increase in cash sales' compared to the previous year without any concrete evidence or fact-finding to prove non-genuineness of the sales transactions.The primary onus under section 68 lies on the assessee to explain the nature and source of the sum credited in the books of account by furnishing proof of identity, creditworthiness, and genuineness of the transaction; once discharged, the burden shifts to the Assessing Officer to bring credible material to disprove the same.Without additional material or rejection of books of account, additions under section 68 cannot be made where the books and related documents have been accepted and no discrepancies have been found. RATIONALE: The Court applied the legal framework under section 68 of the Income Tax Act, 1961, which imposes a primary onus on the assessee to explain unexplained cash credits, and section 145(3) regarding rejection of books of account.Precedents from coordinate benches and High Courts were relied upon, including rulings that additions under section 68 cannot be made without rejection of books or credible evidence of fabrication, specifically in cases involving cash deposits during the demonetization period.The Court emphasized settled legal principles that mere abnormal increase in cash sales compared to the previous year, without any contradictory evidence or rejection of books, is insufficient to invoke section 68/69A additions.The decision aligns with a doctrinal position that protects the assessee's books and transactions once primary evidence of genuineness is furnished, and requires the Revenue to produce additional material to justify additions.
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