TMI Blog2014 (12) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... has been able to prove the identity of the creditor by furnishing the confirmation letter. The genuineness of the transaction is not proved - The receipt of money through banking channel is not sufficient to prove the genuineness of the credit - huge amount was deposited into the bank account of Shri Sudeep Thomas before transferring the same to the assessee’s bank account - assessee was not able to produce any bank account details of Shri Sudeep Thomas from where he has received such amount - as per sec. 68, the assessee is required to explain the capacity of the lender to advance money to the assessee to the satisfaction of the AO - the addition made u/s. 68 of the Act is warranted - The onus is on the part of the assessee to prove the creditworthiness of assessee’s brother, genuineness of the transaction, and identity of the creditor. Merely because confirmation letter from the creditor was furnished that funds were transferred to the assessee’s bank account, it will not prove the genuineness of the transactions as decided in CIT vs. P. Mohanakala 2007 (5) TMI 192 - SUPREME Court] - the order of the CIT(A) is upheld – Decided against assessee. - I.T.A. No. 19/Coch/2014 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the following accounts which is claimed by the assessee as payments to him: A B C D E F Date Account into which the fund is transferred Amount transferred to assessee as per assessee s claim (UAE Dirham) Date of corresponding deposits into the account Amounts credited (UAE Dirham) Source as per bank statement 5.4.2008 253029020001 50000 1.4.2005 B/F 2.4.2008 42750.48 17000 B/F Cash Deposit 25.5.2008 253029020001 47000 21.5.2008 24.4.2008 31000 16000 Cash Deposit Cash Deposit 19.6.2008 230928020001 171595 16.6.2008 172000 Funds transfer from 297043010001 28.6.2008 253029020001 30000 21.6.2008 30000 Cash Deposit 21.8.2008 253029020001 75885 16.8.2008 76596 Funds transfer from 29704702001 19.11.2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m whereas he has made a gift of 11,50,510 dirhams and in this salary he would also need some portion for his own upkeep and for maintaining his family. Thus, the CIT(A) concluded that the assessee s brother Shri Sudeep Thomas does not have the capacity and creditworthiness to advance gift of Dirham 11,50,510 to the assessee. 4.1 According to the CIT(A), section 68 enacts a golden rule of evidence which is not in dispute, i.e., if any sum is found credited in the books of account of an assessee, the onus is on him to explain the said entry and the principle embodied in sec. 68 is only a statutory recognition of what was always understood to be the law based upon the rule that the burden of proof is on the taxpayer to prove the genuineness of borrowings since the relevant facts are exclusively within his knowledge. According to the CIT(A), in this case, it is the gift that has been received by the assessee which also acquires the same nature as it is also a sum credited in the books of accounts. According to the CIT(A), different High Courts as well as Supreme Court in their decisions have consistently held that when there is a sum credited in the books of account of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .5 In this case, according to the CIT(A), the assessee has not been able to prove the capacity and creditworthiness of the assessee s brother to make such huge gift either before the Assessing officer or before the CIT(A) and explanation was also not supported by any documentary evidence and therefore, the Assessing officer has added the amount as unaccounted income of the assessee u/s. 68 of the Income Tax Act. Accordingly, the CIT(A) confirmed the disallowance of gift amounting to ₹ 1,66,01,834/- received by the assessee. Against this, the assessee is in appeal before us. 5. The Ld. AR submitted that the assessee received the above amount from his brother Shri Sudeep Thomas who is residing abroad through banking channel. The Ld. AR submitted that the amounts received from the bank account of Shri Sudeep Thomas with ADCB Bank, Dubai were credited in the bank account of the assessee with Axis Bank. Further, the amounts of ₹ 20,000/- and ₹ 18,000/- received from the account with ICICI bank of Shri Sudeep Thomas were credited to the assessee s bank account with ICICI Bank. The assessee has also filed the copy of the bank accounts before the Assessing officer. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roved the identity and source of source and therefore, addition cannot be made. 8. However, on examination of the bank account of the assessee s brother Shri Sudeep Thomas, various cash deposits have been made into his account and the assessee has not been able to explain the source of the credit in the account of Shri Sudeep Thomas. As per sec. 68 of the I.T. Act, the Assessing officer is duty bound to enquire with regard to the nature and source of any sum credited in the books of account, irrespective of the nomenclature or source indicated by the assessee. In other words, the real nature of the transaction should be ascertained by the Assessing officer and the assessee is required not only to prove the identity of the credit but is also required to prove the capacity of the creditor to lend the money and the genuineness of the transaction. In the present case, the assessee has been able to prove the identity of the creditor by furnishing the confirmation letter. However, the genuineness of the transaction is not proved. The receipt of money through banking channel is not sufficient to prove the genuineness of the credit. In the present case, huge amount was deposited into th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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