The Income Tax Appellate Tribunal (ITAT) Delhi bench held that assessee was failed to discharge the onus to prove genuineness of cash credited by cheques in various bank accounts.
Assessee Ashok Kumar Gupta’s original assessment was completed under Section 144/147 of the Income Tax Act, 1961. Thereafter on the basis of information received from the investigation wing that the bank account of the assessee maintained with Ratnakar Bank Karol Bagh, was credited by cheques with an amount of Rs. 6,71,84,200/-.
Thereafter the AO observed that the assessee had given its unaccounted cash to the entry providers and the same had been received by cheques.
After considering the facts of the case, the A.O. made addition of Rs. 6,71,84,200/- as income from undisclosed sources. Moreover the AO found that certain amounts were also credited to the account of assessee through instrument/cheques issued by different parties.
Thus AO issued notice but without compliance of notice by assessee AO had completed the assessment and passed order under section 263/143(3) of the Income Tax Act by adding an amount of Rs. 11,00,58,100/- to the income of the assessee as the assessee failed to discharge the onus to prove the genuineness of the transaction.
Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeal){ CIT(A)}, who partly allowed the appeal and directed the A.O. to restrict the addition to Rs. 3,16,801/- and deleted the balance addition
Thereafter the revenue filed a second appeal before the tribunal.
No one appeared for assessee during the appellate proceedings before the bench.
Sanjay Tripathi, Counsel for the revenue submitted that assessee could not prove the identity and creditworthiness of creditors as well as the genuineness of the transaction in respect of deposits in its various bank accounts.
It was observed by the tribunal that the assessee was not completely filled with details regarding the cheque given by the parties. Also no response to the summons issued under Section 131 of the Income Tax Act was made by the assessee.
Therefore, the assessee was unable to prove the genuineness of the transaction with the persons/firm/companies and opined that the assessee had introduced its own moneys through the said entities using the bank channel in the shape of cheques.
Thus the conclusion made by the CIT(A)) was no basis regarding the transactions through the banking channel.
After considering the facts submitted by both parties, the two member bench of Shamim Yahya, (Accountant Member) and Anubhav Sharma, (Judicial Member) restored the matter to the file of AO for verifying the details of the persons regarding credits and the payments made by the assessee
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