2012 (1) TMI 284 - AT - Income Tax

Summary

Issues involved: Appeal against order dated 28-02-2007 for assessment year 2004-05: (1) Disallowance of Carting and Labour charges, (2) Addition of unexplained gifts u/s 68.

Disallowance of Carting and Labour charges:
The assessee claimed &8377; 9,91,080/- as expenses for Carting and Labour charges, supported by self-made vouchers totaling &8377; 7,42,300/-. The AO disallowed &8377; 1,17,620/- of unsupported expenses. The Ld CIT(A) deleted the addition based on the higher net profit declared by the assessee. However, the Tribunal disagreed, stating the burden of proof lies with the assessee. Considering the difficulty in verifying self-made vouchers, a disallowance of &8377; 25,000/- was made to address deficiencies, modifying the Ld CIT(A)'s order.

Addition of unexplained gifts u/s 68:
The assessee received gifts from various individuals, with explanations and documents submitted. The AO added the amounts to total income, which was partly upheld by the Ld CIT(A). The Tribunal emphasized the primary burden of proof on the assessee under sec. 68, requiring proof of creditor identity, transaction genuineness, and creditworthiness. While gifts from two individuals were supported by adequate documentation, the third lacked proof of creditworthiness. The Tribunal confirmed the addition related to the third gift and remanded the others for further evidence submission by the assessee. Ultimately, the appeal of the revenue was partly allowed, and the cross objection of the assessee was dismissed.