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DCIT, New Delhi vs. Sh. Madhur Mittal, New Delhi - (Income Tax Appellate Tribunal) (10 Aug 2022)

Burden is on the assessee to establish identity, creditworthiness and genuineness of the transaction for sum credited in the books of accounts to the satisfaction of the Assessing Officer


Direct Taxation

The assessee is an individual, who has not filed return under Section 139 of the Income Tax Act, 1961 (IT Act). Search and seizure operation under Section 132 of the IT Act was carried out in Triveni Group. The assessee belongs to that group. Notice under Section 153A of the IT Act and notice under Section 142(1) of IT Act were issued. Assessment order came to be passed by disallowing the deduction claimed under Section 80C of Rs.1,00,000 and also made addition on account of unexplained cash credit to the tune of Rs.2,43,07,000. Accordingly, assessment order came to be passed by assessing the income of the assessee at Rs.2,44,13,240 as against the returned income of Rs.6,240. As against the assessment order, the assessee has preferred appeal before the learned CIT (Appeals). The CIT (Appeals) vide order partly allowed the appeal by deleting the addition of Rs.2,43,07,000 which was added by the Assessing Officer on account of un-explained cash credit. Aggrieved by the order, the Revenue-Department has preferred the present appeal.

As per Section 68 of the IT Act, it is the burden on the assessee to establish identity, creditworthiness and genuineness of the transaction for sum credited in the books of accounts to the satisfaction of the Assessing Officer. Present Tribunal do not understand proposition of the assessee that cash of Rs.2.50 crores had changed the hands from the company to its promoter-Director without any reason and there is no reason forthcoming as to why the cash of Rs.3.25 crores was paid in cash by the three parties. There is no document produced before either the Assessing Officer or before the CIT (Appeals) or before present Tribunal to prove the genuineness of the transaction.

While deleting the addition, the CIT (Appeals) has not discussed about the proving of genuineness of the transaction by the assessee. The CIT (Appeals) merely relied on the submission made by the assessee and come to the conclusion in favour of the assessee. Therefore, the entire approach of the CIT (Appeals) is erroneous and the matter deserves to be re-looked by the Assessing Officer. Hence, in the interest of justice, present Tribunal deem it fit to set aside the issue of addition of Rs.2,43,07,000 under Section 68 of the IT Act to the file of the Assessing Officer with a direction to the assessee to prove the creditworthiness and genuineness of the transaction with creditable evidence and reasons for travelling such amount of cash from the company to the promoter and parties with whom share purchase agreement has been entered. Appeal allowed.


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