The Delhi Bench of Income Tax Appellate Tribunal (ITAT) while upholding the addition of Rs.12.81 Crores on account of Unexplained Cash Credit held that the Onus of providing source of money lies on Assessee.
The assessee, Arun Duggal had opened, operated and owned two bank accounts in which Rs 12.81 crores were duly deposited. The assessee before the revenue authorities on various occasions denied the knowledge of having any such account. During the statement recorded on 29.12.2015, the assessee said that he was in no way associated with Alfa India and he was hearing the name for the first time during the assessment proceedings.
The Income Tax Department found that two bank accounts maintained by the assessee have not been disclosed to the Income Tax Department. Based on the said information, the Assessing Officer initiated the reopening proceedings under Section 148 of the Income Tax Act, 1961 and issued notice. Owing to credits in the bank account, the addition of Rs 12.81 Crores was made by the Assessing Officer under Section 68 of the Act. Since the CIT(A) confirmed the order of the Assessing Authorities, the present appeal was filed before the ITAT.
The coram of Judicial Member, Amit Shukla and Accountant Member, Dr. B. R. R. Kumar held that the assessee had failed every time and feigned ignorance about the account which was opened with his full knowledge and conscience. Since the assessee failed to prove the source of the sum of money found in his bank account, they have been rightly taxed by the revenue under Section 68 of the Income Tax Act.
“Onus of providing the source of a sum of money found to have been received by an assessee is on him,” the ITAT said.
The ITAT held that the action of the revenue authorities on the issue of notice under Section 148, approval under Section 151 was in accordance with the law. Addition under Section 68 was rightly made, as the assessee failed to offer any explanation with regard to nature and source of credit in his bank account and the primary burden cast upon the assessee for proving the credits has not been discharged either before AO or CIT(A) or before the ITAT.
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