2010 (3) TMI 1078 - AT - Income Tax

Summary

Issues involved: Addition of cash credits u/s 68 of the IT Act and non-genuine loan addition.

Addition of Cash Credits u/s 68 of the IT Act:
The appeal was against the order of the CIT(A)-V, Surat for the assessment year 2004-05. The assessee sought adjournment multiple times but did not appear during the appeal hearing. The AO made additions of cash credits u/s 68 of the IT Act and non-genuine loans based on findings during a survey at the assessee's premises. The AO found non-compliance and inadequacy of evidence from the assessee's side. The CIT(A) remanded the matter back to the AO to record statements of parties related to the cash credits. Despite opportunities, the assessee did not provide complete details of the creditors. Some credits were found genuine, but for others, the assessee failed to furnish necessary information. The AO treated undisclosed amounts as income u/s 68 due to lack of cooperation from the assessee. The Tribunal noted the burden on the assessee to prove the genuineness of the undisclosed credits, which the assessee failed to do at both the assessment and appellate stages. The appeal was dismissed due to lack of merit.

Non-Genuine Loan Addition:
Apart from the cash credit issue, the AO also made an addition for a non-genuine loan. The CIT(A) directed the deletion of a specific amount related to a creditor named Shri Mulchand Khandelwal. The AO's supplementary remand report verified loans from five parties and directed the deletion of those amounts. The remaining additions were confirmed. The assessee's lack of compliance and failure to provide complete details led to the confirmation of most additions. The Tribunal upheld the decision based on the non-cooperative attitude of the assessee and the failure to substantiate the genuineness of the credits.

Separate Judgement by Judge:
No separate judgment was delivered by the judges in this case.