2012 (8) TMI 1150 - AT - Income Tax

Summary

Issues involved: Reopening of assessment u/s. 148, treatment of unexplained cash credit, appeal before CIT (A), appeal before ITAT, challenge to penalty u/s. 271(1)(c).

Reopening of assessment u/s. 148:
The appellant, a partner in two firms, filed a return of income for AY 2005-06. The case was reopened by issuing notice u/s. 148 as the assessee had deposited cash in his bank account and received a loan. The AO treated the amount received as unexplained cash credit and added it to the income.

Treatment of unexplained cash credit:
The CIT (A) dismissed the appeal, stating that the appellant failed to establish the identity, creditworthiness, and genuineness of the transaction. The appellant's submissions regarding the cash deposits and loans were found inconsistent. The AO's decision to add the amounts to income was upheld.

Appeal before ITAT:
The appellant appealed before ITAT, providing details of agreements and transactions with parties involved. The appellant claimed that the initial burden of proof was discharged by submitting relevant documents. The ITAT noted that the appellant had furnished necessary documents to establish the genuineness of transactions, citing a decision of the Gujarat High Court.

Challenge to penalty u/s. 271(1)(c):
The penalty levied on the addition made u/s. 68 was challenged in a separate appeal. Since the addition u/s. 68 was deleted, the penalty did not stand. The ITAT directed the deletion of the penalty u/s. 271(1)(c) in line with the decision on the main appeal.