2010 (11) TMI 771

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....tantial question of law for determination by this court :   "Whether, under the facts and circumstances of the case and on the true and correct interpretation of the provisions of section 68, the Tribunal is justified in upholding the addition on the ground of lack of explanation for the source of, whereas when the genuineness of the transaction and the identity of the creditors along with the explanation of the credit stands established thereby complying with the requirements of the provisions of the Act ?"   Briefly stated the facts necessary for adjudication, as narrated in the appeal are that the appellant-assessee is engaged in the business of purchase and sale of tractors and its parts. During the assessment year under....

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....n of Rs. 30,000. In other words, the Tribunal, while observing that the Assessing Officer had rightly rejected the genuineness of cash transactions in respect of which it had made additions, and put its seal of approval on the addition of Rs. 65,000 except the addition of Rs. 30,000 advanced by Yogesh Kumar.   We have heard learned counsel for the parties and have perused the record.   Whether disallowance under section 68 of the Income -tax Act, 1961, on account of cash credits being ingenuine is the point for consideration in this appeal. The Tribunal had concluded that the addition of Rs. 65,000 on account of cash credits being not genuine, on appreciation of evidence available on record, was justified. The finding record....

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....the parties were having bank account. The assessee has no doubt filed affidavits confirming advance of money received from these parties but the onus cannot be said to be discharged when the parties are closely related to the managing partner by merely filing affidavits when the Assessing Officer asked for production of the parties. The hon'ble Calcutta High Court has held so in the case of CIT v. United Commercial and Industrial Co. (P.) Ltd. [1991] 187 ITR 596 (Cal). Capacity, creditworthiness to lend money are not proved. The law is clear, if direct evidence is not available, then circumstantial evidence has to be looked into. No evidence has been produced which may prove that the parties have ever made investments in earlier year/s to t....