2016 (6) TMI 287 - AT - Income Tax

Unexplained cash credits u/s. 68 on account on account of deposits in banks - identity of the parties he claimed to have received the amounts from - Held that - As seen that the fact of the assessee s cash deposits, etc. in his bank account with Abhudya Co-op Bank and SBI was noticed by the AO. It is seen that on being required by the AO to explain these deposits in the bank account, the assessee was unable to substantiate the explanations he put forth and in the process failed to establish the identity and creditworthiness of the creditors who purportedly advanced these amounts to him and the genuineness of the transactions, resulting in the AO holding that cash credits to the extent of ₹ 14,31,647/- to be unexplained in terms of the provisions of section 68 of the Act and bringing them to tax in his hands. On appeal, in remand proceedings also, it is seen that the assessee was once again unable to prove the basic requirements under section 68 of the Act, i.e. the identity of the parties he claimed to have received the amounts from, their creditworthiness and the genuineness of the transactions, resulting in the learned CIT(A) upholding the addition of ₹ 14,31,647/- made by the AO under section 68 of the Act. Before us also, we find that the assessee, except for raising the grounds of appeal has failed to bring on record any material evidence to establish the genuineness of the aforesaid cash credits in the bank account. In this factual matrix of the case, we are of the considered view that no interference is called for from us in the impugned order of the learned CIT(A) and therefore uphold the same - Decided against assessee.

Issues Involved:
1. Addition of ?14,31,647/- under section 68 of the Income Tax Act, 1961 for unexplained cash credits in the assessee's bank accounts.
2. Non-consideration of re-deposit of withdrawals amounting to ?7,55,269/-.
3. Non-consideration of confirmations and documentary evidence for pay orders amounting to ?6,10,000/-.
4. Treatment of ?3,12,000/- as unexplained cash credit.

Detailed Analysis:

1. Addition of ?14,31,647/- Under Section 68 for Unexplained Cash Credits:
The assessee filed a return of income for A.Y. 2007-08 declaring ?1,47,858/-. The assessment was completed under section 143(3) determining the income at ?16,62,810/- due to additions of unexplained cash credits. The CIT(A) upheld the addition of ?14,31,647/- as unexplained cash credits under section 68 of the Act. The Tribunal noted that the assessee failed to substantiate the identity, creditworthiness, and genuineness of the transactions. Despite multiple opportunities, the assessee did not produce material evidence to support the claims. The Tribunal upheld the CIT(A)'s order, finding no interference necessary.

2. Non-Consideration of Re-Deposit of Withdrawals Amounting to ?7,55,269/-:
The assessee contended that the re-deposit of withdrawals from the bank account amounting to ?7,55,269/- was not considered by the CIT(A). The Tribunal observed that the AO had verified and acknowledged these transactions during the remand proceedings. However, the assessee failed to provide sufficient evidence to distinguish these re-deposits from unexplained cash credits. Consequently, the Tribunal upheld the CIT(A)'s decision, dismissing the assessee's argument.

3. Non-Consideration of Confirmations and Documentary Evidence for Pay Orders Amounting to ?6,10,000/-:
The assessee argued that the CIT(A) did not consider confirmations and documentary evidence for pay orders issued against the receipt of payments totaling ?6,10,000/- (?2,00,000/- from Gafar Khan, ?1,40,000/- from Sheru Khan, and ?2,70,000/- from Sagar Patel). The Tribunal noted that the AO issued notices under section 133(6) to verify these transactions, but the creditors either refused to accept the notices or failed to respond. The assessee did not produce these parties for examination or provide sufficient evidence to prove the genuineness of the transactions. The Tribunal, therefore, upheld the CIT(A)'s order, confirming the addition under section 68.

4. Treatment of ?3,12,000/- as Unexplained Cash Credit:
The assessee claimed that ?3,12,000/- was received from the sale of a room by his father and should not be treated as unexplained cash credit. The Tribunal observed that the assessee failed to provide documentary evidence to substantiate this claim. Notices issued to the alleged creditor, Shri Niharo Pal, were not responded to, and the assessee did not produce him for examination. As a result, the Tribunal upheld the CIT(A)'s decision, treating the amount as unexplained cash credit under section 68.

Conclusion:
The Tribunal dismissed the assessee's appeal for A.Y. 2007-08, upholding the CIT(A)'s order that confirmed the addition of ?14,31,647/- as unexplained cash credits under section 68 of the Income Tax Act, 1961. The assessee failed to provide sufficient evidence to substantiate the identity, creditworthiness, and genuineness of the transactions, leading to the dismissal of all grounds of appeal.

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