2014 (9) TMI 704 - DELHI HIGH COURT

Unexplained cash credits u/s 68 - Whether the Tribunal was right in deleting the addition u/s 68 by applying correct principles – Held that:- There is a big divergence on the aspect of PAN details, income tax returns, etc. as recorded and as per the findings recorded by CIT(A) and the Tribunal – relying upon Govindarajulu Mudaliar (A.) versus CIT [1958 (9) TMI 3 - SUPREME Court] - there were ample authorities for the proposition that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during an accounting year, the AO is entitled to draw inference that the receipts are of an assessable nature - Proof or evidence to show the circulation in money was clearly rejected in view of the statutory provision of Section 68 of the Act and on the question of doctrine of “source of source” or “origin of origin” - The onus to prove the three factum is on the assessee as the facts are within the assessee’s knowledge - Mere production of incorporation details, PAN Nos. or the fact that third persons or company had filed income tax details in case of a private limited company may not be sufficient when surrounding and attending facts predicate a cover up - These facts indicate and reflect proper paper work or documentation but genuineness, creditworthiness, identity are deeper and obtrusive - Companies are artificial or juristic persons but they are soulless and are dependent upon the individuals behind them who run and manage the companies - It is the persons behind the company who take the decisions, controls and manage them - The apparent, patent, and conspicuous facts were ignored by the first appellate authority and the Tribunal - section 68 of the Act was rightly invoked and is applicable – Decided in favour of revenue.