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2017 (5) TMI 906 - AT - Income TaxAddition u/s. 68 - proof of creditworthiness or genuineness - Held that:- CIT(A) utterly failed to consider the crucial fact that once the assessee could obtain such documentary evidences from the payee companies, why he failed to assign any reason for his inability to produce any of the parties or their principal officers for examination before the AO. The summons issued to them stood returned unserved with the remark that no such person was found existing at the address given. No other address was pointed out by assessee otherwise than that on which the summons were issued. As far as the documentary evidence filed by the assessee before the authorities below, we find that in the present scenario, such documentary evidence cannot be relied upon which did not render any help to cross verify the impugned transactions and are against the result of ground level enquiry. In our opinion the peripheral documents in the shape of PAN, so called acknowledgement of returns do not go to prove the identity and creditworthiness of the investors companies, particularly when the entities in question were not found to be existing on the given addresses and that none of the parties were produced nor was there any material on record to rebut the objections of the AO regarding capacity of the alleged investors to make the investment. Mere payment by account payee cheque is not sacrosanct nor can it make a non-genuine transaction genuine. The bank accounts of various entities show uniform pattern of transactions and that invariably, the issue of cheques is immediately preceded by the deposits of equivalent amounts in the account either in cash or through cheque/transfer entries. Unless the transactions represented by the entries in the bank accounts are correlated with the business activities and the books of account of the said entities, no justification to disregard the finding of the AO that the above pattern and the frequency of deposits and withdrawals at short intervals would render the accounts, having been used only for the purpose of providing accommodation entries and therefore, it cannot be said that the assessee has explained the source of credits or the transactions to be genuine. - Decided against assessee.
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