Tax Management India. Com TMI - Tax Management India. Com
Case Laws Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Manuals Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Manoj Kumar Saraf Versus Income-tax Officer, OSD-II

2012 (9) TMI 1064 - GUJARAT HIGH COURT

Unexplained cash credit under section 68 - Held that:- Tribunal rightly held that the assessee had not discharged his burden. The identity of the creditors itself was in doubt. Their creditworthiness was not established. In view of such facts, in our opinion, no question of law arises. - Tax Appeal No. 1496 of 2011 - Dated:- 25-9-2012 - AKIL KURESHI AND MS. HARSHA DEVANI, JJ. Appellant: Bandish Soparkar and Mrs. Swati Soparkar ORDER Akil Kureshi, J. - The assessee has challenged the judgment of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 ₹ 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

herefore, treated the same as unaccounted cash credit under section 68 of the Income Tax Act, 1961. In the assessment order, the Assessing Officer recorded that the assessee was asked to submit details with respect to such credits. The assessee failed to provide the details with respect to these two unsecured loans. The assessee was thereupon asked again to submit account confirmation, copy of acknowledgment and the bank statements of the said creditors. Since the assessee failed to do so, the A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessee approached the Tribunal. The Tribunal by the impugned order, confirmed the additions making following observations : "13. We have heard 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 conf .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

omebody else on his behalf had signed the said confirmation. In Srimati Dayal v. CIT [1995] 214 ITR 801, the Hon'ble Supreme Court ruled that the burden is on the assessee to prove that amounts credited in accounts did not represent income in terms of section 68 of the Act. In Shankar Industries v. CIT [1978] 114 ITR 689, the Hon'ble Calcutta High Court came to the conclusion and has rightly held that for the burden of proof of genuineness, the assessee must prove not only the identity o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ittal's case [2000] 246 ITR 283 (AP), it was held that the assessee was expected to establish the proof of his creditors, the capacity of his creditors to advance money and the genuineness of the transactions in order to discharge the onus imposed on him under section 68 of the Act. A similar view was taken by the Hon'ble Kerala High Court in Oceanic Products Exporting Co. v. CIT [2000] 241 ITR 497. A Division Bench of the Hon'ble Delhi High Court in Prem Nath Goel and Co. v. CIT [20 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by account payee cheque is not sacrosanct nor can it make a non-genuine transaction genuine. In the instant case, the assessee has miserably failed to establish the creditworthiness of the aforesaid two creditors and even the genuineness of the transactions. Not an iota of evidence has been placed before the lower authorities and even before us in order to establish the creditworthiness of the said creditors and genuineness of the transactions. Even when it was argued that the said amount has be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

v. CIT [1992] 198 ITR 147 (Ker); Nemi Chand Kothari v. CIT [2003] 264 ITR 254 (Gauhati); and Hindustan Tea Trading Co. Ltd. v. CIT [2003] 263 ITR 289 (Cal) support the view that Revenue authorities are entitled to consider genuineness of the transactions and to penetrate the veil in order to ascertain the truth. It is well settled that mere identification of creditor or receipt of amount through banking channel is not sufficient to satisfy the requirement of a genuine credit. In the light of vi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 in the hands of the assessee. In this respect, reliance was placed upon the decision of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

shed. The authorities found that the assessee did not provide sufficient evidence in this respect. In case of Sumati Dayal v. CIT [1995] 214 ITR 801 (SC) the Apex Court held that regarding cash credit, burden is on the assessee to prove that the amounts credited did not represent his income. It was observed that in view of section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year, it may be charged to income tax as the income of the assessee of tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version