TaxTMI 
TaxTMI 
2012 (9) TMI 1064
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....emely small. We have, therefore, focused our inquiry only on the question No.3, which reads as under : "Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal has erred in law in confirming the action of lower authorities of making addition of Rs. 2,60,000/- on account of alleged unexplained cash credit under section 68 of the Income Tax Act, 1961?" 2. The issue arises in following factual background. The appellant - assessee had shown several unsecured loans in his books for the assessment year 2005-06. The Assessing Officer during scrutiny called upon the assessee to establish the genuineness of the transactions, identity of the creditors/introducer and the capacity to advance such loans. With respect to t....
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....eard both the parties and gone through the facts of the case. Indisputably, the assessee did nothing except filing confirmations of the aforesaid two creditors before the AO. The ld. CIT(A) concluded that mere filing of a confirmation letter could not be treated as sufficient evidence of the genuineness of the cash credits, since any one could sign a confirmation letter and provide a PAN. Thus, the assessee failed to discharge the initial burden which lay on him. The enquiries made by the AO also drew a blank. Even before the ld. CIT(A), the AR himself expressed his inability to have the confirmations authenticated nor produced any evidence, establishing creditworthiness of the aforesaid creditors or genuineness of the transactions. The Rev....
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....000] 241 ITR 497. A Division Bench of the Hon'ble Delhi High Court in Prem Nath Goel and Co. v. CIT [2004] 271 ITR 390; [2004] 25 Indian Taxation Reports 124, has taken a view that for cash credit under section 68 of the Act, the onus is on the assessee to establish the genuineness of the credit entries by providing (i) the identity of the creditor; (ii) capacity of the creditor to advance the money, and (iii) genuineness of the transaction, i.e. the circumstances and the reasons for such deposits. In CIT v. Precision Finance (P.) Ltd. [1994] 208 ITR 465 (Cal), it was concluded that mere payment by account payee cheque is not sacrosanct nor can it make a non-genuine transaction genuine. In the instant case, the assessee has miserably fa....
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....s and genuineness of the transactions nor any such material has been placed before the lower authorities and even before us, we are not inclined to interfere with the findings of the ld. CIT(A). Consequently addition of Rs. 2,60,000/- in terms of the provisions of section 68 of the Act the interest of Rs. 12,825/- claimed on such cash credits is upheld. Thus, ground Nos.3&4 in the appeal are dismissed." 4. Learned counsel Shri Soparkar for the appellants vehemently contended that the assessee had established the genuineness of the transactions, the identity of the creditors and also their creditworthiness. The Assessing Officer failed to carry out requisite inquiry. If the source of the source was not established, no addition can be made i....