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2020 (9) TMI 150 - AT - Income TaxAddition u/s 68 - assessee could not discharge the onus cast upon him to prove the genuineness of the transactions identity of the creditors and also creditworthiness of the loan creditors - HELD THAT - In the original assessment proceedings also the assessee could not substantiate the identity creditworthiness and genuineness of the transactions. As observed from the loan confirmations that the assessee has not provided complete address so that the revenue officers can make correspondence with the loan creditors. The address provided is incomplete like house no. street area etc. has not been given creditworthiness of the loan creditors and genuineness of the transactions was also not proved and the entire loan was received in cash below Rs. 20, 000/- by the assessee. Even the PAN number is also not provided in many cases. Merely submission of confirmations from loan creditors is not sufficient it is also noticed that it is incomplete also as observed above. - Decided against assessee.
Issues Involved:
1. Legality of the assessment order and the appellate order. 2. Addition of Rs. 29,00,000 as income from undisclosed sources under Section 68 of the Income Tax Act. 3. Genuineness and creditworthiness of the loan transactions. 4. Submission of loan confirmations and repayment details. 5. Adequacy of opportunities provided to the assessee for proving the transactions. Issue-wise Detailed Analysis: 1. Legality of the Assessment Order and the Appellate Order: The assessee argued that the assessment and appellate orders were against the law, weight of evidence, and probabilities of the case. However, the Tribunal found that the CIT(A) had sustained the addition made by the AO after considering the documents and circumstances presented. 2. Addition of Rs. 29,00,000 as Income from Undisclosed Sources under Section 68: The AO added Rs. 29,00,000 to the total income of the assessee, treating it as income from undisclosed sources under Section 68 of the Income Tax Act. The AO noted that the identity, creditworthiness of the loan creditors, and the genuineness of the transactions were unestablished. The CIT(A) upheld this addition, observing that the assessee failed to provide sufficient evidence to prove the identity and creditworthiness of the loan creditors and the genuineness of the transactions. 3. Genuineness and Creditworthiness of the Loan Transactions: The assessee claimed that the loans were received from friends, relatives, and staff due to financial constraints. However, the CIT(A) found it improbable that the assessee could gather 98 individuals to provide cash loans almost daily. The CIT(A) also noted the absence of PAN numbers and income tax assessment details in the loan confirmations, making it difficult to verify the identity and creditworthiness of the loan creditors. 4. Submission of Loan Confirmations and Repayment Details: The assessee submitted loan confirmations from 98 persons and details of repayments made in subsequent years. However, the CIT(A) and the Tribunal found these submissions insufficient to prove the genuineness of the transactions and the creditworthiness of the loan creditors. The Tribunal noted that the addresses provided were incomplete, and many confirmations lacked PAN numbers. 5. Adequacy of Opportunities Provided to the Assessee: The Tribunal observed that the assessee did not appear before the AO during the second round of proceedings and failed to provide complete details required under Section 68. The Tribunal held that it was the duty of the assessee to prove the loan transactions. The Tribunal found no merit in the argument that the revenue authorities should have called the loan creditors for verification, as the initial burden of proof lay with the assessee. Conclusion: The Tribunal upheld the findings of the CIT(A) and dismissed the appeal filed by the assessee. The Tribunal concluded that the assessee failed to discharge the onus of proving the genuineness, creditworthiness, and identity of the loan creditors, and therefore, the addition of Rs. 29,00,000 as income from undisclosed sources under Section 68 was justified. Order: The appeal of the assessee is dismissed. Order pronounced in the open court on 31/08/2020.
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