The Income Tax Appellate Tribunal (ITAT), Pune Bench consisting of Inturi Rama Rao, Accountant Member and SS Viswanethra Ravi, Judicial Member dismissed appeal holding fraud as there was evidence of withholding information to establish genuineness of transactions.
On perusal of the assessment order, it would reveal that the appellant, M/s. Minakshi Builders despite the fact that the appellant was afforded several opportunities had failed to discharge the onus of proving by cogent and reliable evidence of identity of the creditors, creditworthiness of the creditors/investors and genuineness of the transactions to the satisfaction of the Assessing Officer.
The onus lies upon theassessee to establish these factors and mere furnishing of list of persons, who claimed to have advanced money to the appellant would not constitute sufficient compliance with the onus placed on the assessee.
It is also clear that the appellant had failed to discharge the onus casts upon him to prove the genuineness of the transactions, identity of the creditors and creditworthiness of the creditors/investors who should have financial capacity to make the advance in question to the satisfaction of the Assessing Officer.
The Delhi High Court in the case of PCIT vs. NDR Promoters (P.) Ltd held that when the Assessing Officer was made addition under Section 68 in respect of the amount received as share capital of several companies which was in-fact maintained/operated by one person who is indulged in providing the accommodation entries are held to be justified.
The Bench noted that “We are inclined to confirm the addition made by Assessing Officer, in view of the well settled principle of law that fraud vitiate everything and even principles of natural justice have no application and such transaction is void ab initio.” Concluding the Tribunal observed that “In the present case also, the appellant deliberately withheld the information from the Assessing Officer as well as the CIT(A) which is within exclusive knowledge of appellant to establish the genuineness of transactions of purchase of shares of that company. It is nothing but a fraud played by the appellant.”
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