TaxTMI 
TaxTMI 
2015 (4) TMI 785
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....appellant has discharged primary onus and give sufficient details. 02. Appellant pray you Honour to delete the addition u/s.68. Relief claimed in appeal Addition made u/s.68 of Rs. 15 lacs may be deleted or appropriate relief as per facts and circumstance of the case. 3. Briefly stated facts are that this is a second round of litigation. In earlier round, the Tribunal (ITAT 'C' Bench Ahmedabad) had restored the issue of addition of Rs. 15 lacs made u/s.68 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") to the file of ld.CIT(A) in ITA No.2939/Ahd/2006 for AY 2003-04 vide order dated 14/12/2007. However, the ld.CIT(A), after obtaining Remand Report from the Assessing Officer ((AO in short), again confirmed the addition on the basis that the assessee could not establish the identity of the creditors, genuineness of the transaction and creditworthiness of the creditors. Against this, the assessee has filed the present appeal. 4. Ground Nos.1 & 2 are inter-related and, therefore, the same are decided together. The ld.counsel for the assessee submitted that the authorities below were not justified in making the addition and confirming the same. He submitted th....
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.... of the creditor to advance the money and genuineness of the transaction. If the assessee establishes the aforesaid three pre-conditions, then it would be for the Department to disprove the same [CIT vs. Baishnav Charan Mohanty (1955) 212 ITR 199, 201 (Orissa)]. Mere filing of confirmatory letters does not discharge the onus that lies on the assessee [Bharti Pvt.Ltd. vs. CIT (1978) 111 ITR 951 (Cal); CIT Vs. W.J. Walker & Co. (1979) 117 ITR 690, 694 (Cal); CIT vs. United Commercial & Industrial Co. (Pvt.) Ltd. (1991) 187 ITR 596, 599 (Cal)]. Mere furnishing of the particulars is not enough. Mere payment by account payee cheque is not sacrosanct nor can it make a non genuine transaction genuine [CIT vs. Precision Finance Pvt.Ltd. (1999) 208 ITR 465, 470, 471 (Cal)]. It is thus an established position in law that the onus was on the appellant to adduce sufficient evidence to prove identity of the creditors, their creditworthiness or capacity to advance the money and genuineness of the transactions. Appellant filed confirmations; however, the capacity of the creditors to advance the money could not proved. In all the cases, loans were claimed to have been given out of agricultural inc....
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....itors' addresses supplied by the appellant is therefore not established. It cannot therefore be said that appellant discharged onus of establishing identity of the creditors. Further, onus of prima facie establishing capacity of the creditors to advance the money cannot be said to have been discharged when land records in their names could not be filed to justify even prima facie their claimed source of agricultural income, equivalent amount of cash was deposited in creditors' bank accounts immediately before issuing cheques in favour of the appellant and there were no other transactions in their bank accounts during the entire year. Since appellant has not been able to discharge the initial onus u/s.68, there is no question of onus shifting to the Assessing Officer. It is held that the addition of Rs. 15,00,000/- u/s.68 is justified and the same is confirmed." 5.1. It is settled principle of law that the assessee is required to prove genuineness of transaction, identity of creditors and creditworthiness of such creditors. In the absence of such proof, the Assessing Authority would be justified in making addition by invoking provisions of section 68 of the Act. In the case in ha....
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....he case where the assessee has concealed the income, but it is the case where the assessee had accepted the deposits from various persons. He submitted that the assessee made all the efforts and co-operated in the proceedings below the authorities to furnish the evidences. He submitted that the assessee had disclosed all material particulars related to these credits. He submitted that under the identical facts, a view has been taken by the Jurisdictional High Court that the penalty cannot be sustained. He placed reliance on the judgement(s) of Hon'ble Gujarat High Court rendered in the case of CIT vs. Jalaram Oil Mills reported at (2002) 253 ITR 192 (Guj.) and of National Textiles vs. CIT reported at (2001) 249 ITR 125 (Guj.) to buttress its contention that there must be some material or circumstances leading to the reasonable conclusion that the amount does represent the assessee's income. He further placed reliance on the decision(s) of Coordinate Benches (ITAT Ahmedabad) rendered in the case of Shri Natubhai Naranbhai Virani vs. ITO in ITA No.1433/Ahd/09 for AY 2003-04, dated 07/08/2009 and of ACIT vs. Manish Organics India Ltd. reported at (2012) 17 taxmann.com 25 (Ahd.):: ITA ....
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....nd circumstances are equally consistent with the hypothesis that the amount does not represent concealed income as with the hypothesis that it does. If a assessee gives an explanation which is unproved but not disproved i.e., it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false, the Explanation cannot help the Department because there will be no material to show that the amount in question was the income of the assessee." 8.1. Further, the Hon'ble Gujarat High Court rendered in the case of CIT vs. Jalaram Oil Mills(supra), has held that applying the ratio laid down by the Hon'ble Apex Court in the case of CIT vs. Anwar Ali (1970) 76 ITR 696(SC) and of CIT vs. Khoday Eswarsa and Sons (1972) 83 ITR 369(SC), it can be stated on the basis of the assessee agreeing to have the credit entries in its books of account treated as its income, by virtue of the provisions of section 68 of the Act, the said sums shall be deemed to be income of the year under consideration. However, de hors the said provision, it is not possible to state with certainty that the said sums would be "concealed income" of the assessee for the y....