2022 (8) TMI 1027 - AT - Income Tax

Addition u/s 68 - share application money/un-secured loans received by the assessee from various entities observing that the assessee did not prove identity, creditworthiness and genuineness of the loan creditors and identity and source of share application money was not established - HELD THAT - Before the ld. CIT (Appeals) the assessee could not establish the genuineness of the share application money and the un-secured loans by filing the necessary evidences and the ld. CIT (Appeals) sustained additions The notice issued by the Registry fixing the date of hearing 20.06.2022 returned un-served with the endorsement Left without address . The assessee even before us could not produce any evidence to substantiate its claim. None of the averments made in the assessment order were rebutted with evidences before us. In the circumstances, we uphold the order of the Assessing Officer as well as the ld. CIT (Appeals) and reject the grounds raised by the assessee.

Summary

Issues:
Appeal against addition under Section 68 of the Income Tax Act, 1961 for assessment year 2016-17.

Analysis:
1. The appeal was filed against the order of the Commissioner of Income Tax (Appeals) sustaining the addition made under Section 68 of the Income Tax Act, 1961 by the Assessing Officer. Despite notices, the assessee did not appear, and the appeal was heard based on the submissions of the Department's Representative (DR).

2. The Department argued that the assessee failed to prove the identity, creditworthiness, and genuineness of share application money and unsecured loans received. The Assessing Officer treated the share application money as unexplained cash credit under Section 68, emphasizing the lack of evidence regarding the source of funds and the relationship between the parties involved.

3. The Assessing Officer also held that the assessee did not establish the identity, creditworthiness, and genuineness of the loan creditors for unsecured loans. Discrepancies in confirmations provided by the assessee raised doubts about the legitimacy of the transactions, leading to the addition of the borrowed amounts to the assessee's income under Section 68.

4. The ld. CIT (Appeals) upheld the additions, noting the failure of the appellant to substantiate the genuineness of the transactions during appellate proceedings. Despite opportunities to provide evidence, the appellant did not attend or file further details, resulting in the confirmation of the assessed income by the Assessing Officer.

5. The Tribunal upheld the orders of the Assessing Officer and the ld. CIT (Appeals) as the appellant failed to produce any evidence to support its claims. The grounds raised by the assessee were rejected, leading to the dismissal of the appeal and affirming the addition under Section 68 of the Income Tax Act, 1961.

6. The judgment was pronounced on 23/08/2022, with the appeal of the assessee being dismissed, and the additions made by the Assessing Officer were upheld.