2015 (12) TMI 449 - AT - Income Tax

Unexplained cash credit under section 68 - Held that - As is evident, during the relevant previous year, as per assessee s books of account, there is a credit entry showing cash receipt of ₹ 1,03,000 from Shri Hemnani. However, concerned person when confronted by the Assessing Officer admitted of having paid amount of ₹ 48,000, and denied of having paid the balance amount of ₹ 55,000. In support of such claim, he also produced the account copy in the name of the assessee in his books of account as per which the amount paid to him was ₹ 48,000. Though the assessee has claimed that as per his books of account, the amount received in cash from Shri Hemnani, was ₹ 1,03,000, such entries in assessee s books of account without any other corroborative evidence, cannot be considered to be genuine or authentic. It is to be noted in the course of remand proceedings, the Assessing Officer has specifically called upon the assessee to furnish any documentary evidence in support of cash received of ₹ 1,03,000, however, the assessee admitted before the Assessing Officer that he will not be able to furnish any evidence. Thus, when Shri Hemnani, himself stated before the Assessing Officer that he has paid only ₹ 48,000 in cash to the assessee and which is also as per his books of account, the claim of the assessee that he has received ₹ 1,03,000 from the creditor cannot be accepted. In these circumstances, we agree with the learned Commissioner (Appeals) that the credit for the balance amount of ₹ 55,000, as appearing in the name of Shri Hemnani, has to be treated as unexplained cash credit under section 68 of the Act. - Decided against assessee Addition of an amount claimed to have been received from Shri Premji Maroo and Shri Jaideep Patel, respectively - Held that - Assessee failed to produce any substantive evidence to show that there is in fact any outstanding liability due to the assessee admitted by these two persons or show any correspondence by the assessee with the concerned persons demanding payment of outstanding liability. Thus, in absence of any corroborative evidence to prove the fact that the credits appearing in books of account in relation to the concerned persons are genuine, assessee s claim of having received cash payment cannot be believed on mere face value. Therefore, the assessee having failed to establish the genuineness of the credits, the amounts in question have been rightly treated as unexplained credit of the assessee. As far as the principle laid down in the decision cited by the learned Counsel for the assessee, though we respectfully agree with the principle laid down therein, but those principles cannot be applied to each and every case without examining the relevant facts. As far as the present assessee is concerned, the facts on record clearly demonstrate that the assessee has failed to establish the genuineness of the credits. That being the case, we do not find any reason to interfere with the order of the learned Commissioner (Appeals) on this issue. - Decided against assessee

Summary

Issues Involved:
1. Grounds no.4 and 7 - Relief granted under section 154 of the Income Tax Act, 1961.
2. Grounds no.12 and 10 - General in nature, no specific adjudication required.
3. Grounds no.3 and 6 - Addition of Rs. 55,000 as unexplained cash credit under section 68 of the Act.
4. Grounds no.8 and 9 - Addition of Rs. 2,60,000 and Rs. 2,50,000 claimed to have been received from Shri Premji Maroo and Shri Jaideep Patel, respectively.

Detailed Analysis:

Grounds no.4 and 7:

The learned Counsel for the assessee submitted that these grounds do not survive any more as the learned Commissioner (Appeals) has granted relief to the assessee in an order passed under section 154 of the Income Tax Act, 1961. Consequently, grounds no.4 and 7 were dismissed as "not pressed".

Grounds no.12 and 10:

These grounds were deemed general in nature and did not require specific adjudication.

Grounds no.3 and 6:

The assessee challenged the addition of Rs. 55,000 as unexplained cash credit under section 68 of the Act. The facts reveal that the assessee, a company engaged in sub-broker and share dealing activities, filed its return of income declaring total income at Rs. nil. The assessment was completed under section 143(3) with a total income determined at Rs. 18,53,170, including additions under section 68. The Tribunal previously directed the Assessing Officer to re-examine the additional evidence. The Assessing Officer, after further proceedings, added Rs. 18,31,997 under section 68 due to the assessee's failure to establish the genuineness of the cash credits.

The assessee appealed, and the learned Commissioner (Appeals) remanded the matter for fresh verification. The learned Commissioner (Appeals) accepted certain cash credits as genuine but confirmed additions for three parties, including Shri Hemnani, due to lack of confirmations and denial of transactions by two parties. The Tribunal found that the assessee failed to provide corroborative evidence for the Rs. 55,000 credit from Shri Hemnani, and thus, upheld the addition as unexplained cash credit under section 68. Grounds no.3 and 6 were dismissed.

Grounds no.8 and 9:

The assessee challenged the addition of Rs. 2,60,000 and Rs. 2,50,000 claimed to have been received from Shri Premji Maroo and Shri Jaideep Patel, respectively. During remand proceedings, both individuals denied paying these amounts to the assessee. The learned Commissioner (Appeals) confirmed the additions based on these denials.

The assessee argued that despite the denials, these individuals conducted share transactions through the assessee, and their identities and PAN details were established. However, the Tribunal noted that both individuals denied any transactions and the assessee failed to provide additional evidence. The Tribunal found that the assessee could not establish the genuineness of the transactions and upheld the additions as unexplained credits. Grounds no.8 and 9 were dismissed.

Conclusion:

The assessee's appeal was dismissed in its entirety, with the Tribunal upholding the additions made by the Assessing Officer and confirmed by the learned Commissioner (Appeals).

Order:

Order pronounced in the open Court on 9.10.2015.