CIT v. Kinetic Capital Finance Ltd.

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The Tax Publishers2012 TaxPub(DT) 0409 (Del-HC) : (2012) 044 (I) ITCL 0511 : (2013) 354 ITR 0296 : (2011) 202 TAXMAN 0548 INCOME TAX ACT, 1961 --Income from undisclosed sources--Addition under section 68Genuineness--During the scrutiny proceeding, AO observed that assessee had received deposits from 86 persons. Out of these 86 persons, 16 persons acknowledged the receipt of summons and admitted to the fact that they had deposited money with assessee. AO, however, was not satisfied qua the remaining 70 depositors, that assessee, had been able to discharge its onus that the amounts in issue, did not belong to assessee. Even though AO had accepted that the deposits made by sixteen (16) persons were genuine, the same were included in the addition made by AO. After that AO had zeroed down ultimately on ten (10) entities/persons which, according to him, were not genuine. Out of these ten (10) entities only four (4) had made deposits with assessee during the relevant assessment year. *Held:* 4 persons who had made deposits in the relevant assessment year had furnished details with respect to the deposit and also acknowledged the fact that money had been returned to them. Since assessee had discharged initial onus, thereafter he was not required to prove the genuineness of the transaction as between its creditors and that of the creditors' source of income. Income Tax Act, 1961 Section 68 IN THE DELHI HIGH COURT SANJAY KISHAN KAUL AND RAJIV SHAKDHER, JJ. CIT, v. Kinetic Capital Finance Ltd. IT Appeal No. 87 of 2007 A.Y. 1998-99 2 September 2011 Appellant by : N.P. Sahni JUDGMENT *Rajiv Shakdher, J.* At the outset, we may note that, in the captioned appeal, the Division Bench of this Court vide order dated 5-10-2007 had directed the revenue to confirm as to whether the order passed by the Income Tax Appellate Tribunal (hereinafter referred to as the 'Tribunal') for the assessment year 1997-98 in respect of the same issue, had been accepted by it. This information was not supplied till, the hearing held today. We have been informed by Mr. Sahni, who appears for the revenue, that the order of the Tribunal for assessment year 1997-98 was challenged by way of an appeal bearing ITA No. 938/2005. A Division Bench of this court vide order dated 5-10-2005 dismissed the said appeal on the ground that no substantial question of law arises for consideration. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 0409 (Del-HC) : (2012) 044 (I) ITCL 0511 : (2013) 354 ITR 0296 : (2011) 202 TAXMAN 0548

INCOME TAX ACT, 1961

--Income from undisclosed sources--Addition under section 68Genuineness--During the scrutiny proceeding, AO observed that assessee had received deposits from 86 persons. Out of these 86 persons, 16 persons acknowledged the receipt of summons and admitted to the fact that they had deposited money with assessee. AO, however, was not satisfied qua the remaining 70 depositors, that assessee, had been able to discharge its onus that the amounts in issue, did not belong to assessee. Even though AO had accepted that the deposits made by sixteen (16) persons were genuine, the same were included in the addition made by AO. After that AO had zeroed down ultimately on ten (10) entities/persons which, according to him, were not genuine. Out of these ten (10) entities only four (4) had made deposits with assessee during the relevant assessment year. Held: 4 persons who had made deposits in the relevant assessment year had furnished details with respect to the deposit and also acknowledged the fact that money had been returned to them. Since assessee had discharged initial onus, thereafter he was not required to prove the genuineness of the transaction as between its creditors and that of the creditors' source of income.

Income Tax Act, 1961 Section 68

IN THE DELHI HIGH COURT

SANJAY KISHAN KAUL AND RAJIV SHAKDHER, JJ.

CIT, v. Kinetic Capital Finance Ltd.

IT Appeal No. 87 of 2007

A.Y. 1998-99

2 September 2011

Appellant by : N.P. Sahni

JUDGMENT

Rajiv Shakdher, J.

At the outset, we may note that, in the captioned appeal, the Division Bench of this Court vide order dated 5-10-2007 had directed the revenue to confirm as to whether the order passed by the Income Tax Appellate Tribunal (hereinafter referred to as the 'Tribunal') for the assessment year 1997-98 in respect of the same issue, had been accepted by it. This information was not supplied till, the hearing held today. We have been informed by Mr. Sahni, who appears for the revenue, that the order of the Tribunal for assessment year 1997-98 was challenged by way of an appeal bearing ITA No. 938/2005. A Division Bench of this court vide order dated 5-10-2005 dismissed the said appeal on the ground that no substantial question of law arises for consideration.