The Tax Publishers2020 TaxPub(DT) 1164 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 68

When assessee had primarily discharged the initial onus laid on him in terms of section 68 by providing details to establish genuineness of transaction, identity and creditworthiness of depositors then assessee was not expected to prove genuineness of cash deposited in bank account of those creditors because under the law assessee could be asked to prove the source of credits in his books of accounts but not the source of source and where lenders of assessee were income-tax assessees whose PAN have been disclosed, AO could not ask assessee to further prove genuineness of transactions without first verifying such fact from income-tax returns of lenders.

Income from undisclosed sources - Addition under section 68 - Alleged unexplained creditors - Assessee discharged onus lay on it

AO found that assessee had taken unsecured loans from three persons. AO held the assessee could not prove the Identity, the genuineness of the transaction and therefore, made the addition under section 68. Held: Decision in the case of DCIT v. Rohini Builders (2002) 256 ITR 360 (Guj.) : 2002 TaxPub(DT) 0305 (Guj-HC) wherein High Court had laid down that when assessee had primarily discharged the initial onus laid on him in terms of section 68 by providing details to establish genuineness of transaction, identity and creditworthiness of depositors then assessee was not expected to prove genuineness of cash deposited in bank account of those creditors because under the law assessee could be asked to prove the source of credits in his books of accounts but not the source of source. Further, confirmation was filed but other details could not be filed as he was residing abroad. Therefore, identity, credit-worthiness and genuineness of transaction was duly proved. Where lenders of assessee were income-tax assessees whose PAN have been disclosed, AO could not ask assessee to further prove genuineness of transactions without first verifying such fact from income-tax returns of lenders.

Relied:CIT v. Ayachi Chandrashekhar Narsangji (2014) 42 taxmann.com 251 (Guj) CIT v. Ranchhod Jivabhai Nakhava (2012) 81 CCH 193 (Guj-HC) : 2012 TaxPub(DT) 2351 (Guj-HC) Dy. CIT v. Rohini Builders (2002) 256 ITR 360 (Guj.) : 2002 TaxPub(DT) 0305 (Guj-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 69

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