Addition of Unexplained Capital will sustain in absence Evidence to Prove Source of Capital: ITAT [Read Order]
![Addition of Unexplained Capital will sustain in absence Evidence to Prove Source of Capital: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2022/08/Evidence-Capital-ITAT-taxscan.jpeg "Addition of Unexplained Capital will sustain in absence Evidence to Prove Source of Capital: ITAT [Read Order]")
The Visakhapatnam bench of the Income Tax Appellate Tribunal (ITAT) held that the addition of unexplained capital will sustain in the absence of evidence to prove the source of capital. The appellant was represented by Shri Samuel Nagadesi and the respondent was represented by Shri S.P.G.Mudaliar. The Assessing Officer (AO) observed that the assessee has shown unsecured loans...
The Visakhapatnam bench of the Income Tax Appellate Tribunal (ITAT) held that the addition of unexplained capital will sustain in the absence of evidence to prove the source of capital.
The appellant was represented by Shri Samuel Nagadesi and the respondent was represented by Shri S.P.G.Mudaliar.
The Assessing Officer (AO) observed that the assessee has shown unsecured loans of Rs.25,00,000/-, but failed to furnish any documentary evidence in support of identity, creditworthiness and genuineness of the transaction and added the same to the income of the assessee, treating the same as income from other sources.
The AO categorically mentioned that the creditors are uneducated and have meagre agricultural land and some of them are having savings account with no balance. The CIT(A) creditors are having a meagre extent of land and the agricultural income of these land holdings would be sufficient only to manage their livelihood and domestic expenditure and held that persons with lower income, advancing such a huge amount in a single day as improbable.
It was observed that the AO noted that the assessee has made a total investment of Rs.20,33,333/- towards the first instalment of the license fee and the first purchase of liquor and the assessee was asked to explain the sources for fresh capital introduced during the financial year of Rs.7,97,500/- with supporting evidence, where he failed to prove the sources for capital contribution by any documentary evidence even though sufficient opportunities were afforded. The CIT(A) upheld the addition made by the AO.
Shri Duvvuru R L Reddy, judicial member & Shri S Balakrishnan, accountant member observed that in the absence of any evidence, the order passed by the lower authorities will sustain and the appeal of the assessee was dismissed.
To Read the full text of the Order CLICK HERE
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