The Income Tax Appellate Tribunal (ITAT), Delhi bench consisting of Saktijit Dey, Judicial Member, and Pradip Kumar Kedia, Accountant Member held that the onus of establishing creditworthiness and genuineness of transactions is on the assessee under Section 68 of Income Tax Act.
The assessee, Zodiac Transport Co.Pvt. Ltd submitted that the action for upholding the order u/s. 143 with regard to 153A(b) is being challenged on facts and Law, and that according to Provisions of Section 153A/153C the sine-qua-non u/s.132 is material information in the possession, whereas from the ‘Material Facts’ containing ‘Material Particulars’ the findings of facts emerge for no adverse material found for invoking and application of consequential search assessment proceedings. The assessee further submitted that the findings of the Commissioner of Income Tax (CIT) are being challenged on facts and Law, since ‘None Material’ found attributable to the search and already accounted, recorded, disclosed and declared transactions are being ‘charged to tax’ whereby action is contradictory to the settled proposition of Law for ‘chargeability of Income found as a consequence of Search’.
The assessee further submits that the order of CIT is challenged for invoking the provision of Section 40A(3) in respect of the purchase of shares and other relevant transactions without any material on record and also for initiation of proceedings u/s. 2711A read with section 278B without any cogent material found during search and or any material on record during assessment proceedings. The Assessee also submits that the order of CIT is challenged for directing competent authority under the Money Laundering Act as well as the serious Fraud Investigation office which is outside the scope of the Income Tax Act without any material on record.
The Tribunal observed that the primary burden is cast on the assessee to establish the creditworthiness and genuineness of transactions under Section 68 of the Income Tax Act.
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