The Income Tax Appellate Tribunal, Allahabad bench has held that the addition under section 68 of the Income Tax Act,1961 will sustain when the assessee failed to prove the genuineness of cash credit.
The assessee, Ghaus Memorial Sahkari Awas Samiti Ltd a co-operative society was aggrieved by the assessment order dated 26.03.2014 passed u/s 143(3) of the 1961 Act which made additions to the tune of Rs. 1,67,51,761/- to the income of the assessee towards unexplained deposits/cash credits u/s 68 of the 1961 Act. The CIT(A) in the first round of litigation confirmed the additions made by the AO.
The assessee filed second appeal with tribunal and the tribunal ordered to restore the matter back to the file of AO for verification and restrict the addition to the amount of unexplained fresh deposits raised during the impugned assessment year by the assessee and delete the additions w.r.t. to deposits raised in earlier year.
It was contended that despite several opportunities being granted to the assessee, no evidences/explanations are filed by the assessee to satisfy the mandate of Section 68 of the 1961 Act.
It was observed that the assessee has raised advance for land received from its members, which stood at Rs. 5,32,53,535/- as per audited Balance Sheet of the assessee, out of which fresh amount of deposits/ cash credits raised by assessee during the year under consideration were to the tune of Rs. 64,62,054 which stood added by ld. CIT(A) u/s 68 of the 1961 Act, and which requires our adjudication.
The deposits being advance for land from members to the tune of Rs. 64,62,054/- are recorded in the form of cash credits which are recorded in assessee’s books of accounts, and the onus was on the assessee to explain identity and creditworthiness of the creditor and genuineness of the transaction.
The Tribunal observed that the assessee has not submitted any evidences/explanation to discharge its onus u/s 68 of the 1961 Act.
While dismissing the appeal filed by the assessee, Shri Vijay Pal Rao, judicial member and Shri Ramit Kochar, accountant member observed that the onus u/s 68 was on the assessee which was failed to discharge, thus no need to interfere with previous order. Shri A.K. Singh appeared on behalf of the respondent and none appeared for the appellant.
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