2016 (5) TMI 398 - HC - Income Tax

Addition u/s 68 - Held that - The assessee could not produce any evidence regarding source of deposit of Rs. 25 lacs by Shri Ashok Bansal with him. Under Section 68 of the Act, onus was upon the assessee to prove the identity of the creditor, his credit worthiness and genuineness of the transaction in the matter. Since the assessee failed to produce any documentary evidence regarding the source of the deposit of the amount, the addition was held to be justified

Summary

Issues:
1. Legality of orders under the Income Tax Act
2. Addition of Rs. 25,00,000 under section 68 of the Income Tax Act
3. Appellant's request to alter substantial questions of law

Analysis:
1. The appeal was filed by the revenue under section 260A of the Income Tax Act against the order dated 27.8.2015 passed by the Income Tax Appellate Tribunal. The appellant, engaged in the trading business, had filed his return of income declaring net taxable income. The Assessing Officer made various additions and disallowances during the assessment, including the addition of Rs. 25,00,000 under section 68 of the Act. The Commissioner of Income tax (Appeals) upheld this addition, and the Tribunal partly allowed the appeal but upheld the addition of Rs. 25,00,000. The Tribunal found that the appellant failed to provide evidence regarding the source of the deposit, leading to the addition being justified.

2. The Tribunal held that under Section 68 of the Act, the burden was on the assessee to prove the identity of the creditor, credit worthiness, and genuineness of the transaction. Since the appellant could not produce any evidence regarding the source of the deposit of Rs. 25,00,000 by Shri Ashok Bansal, the addition was deemed justified. The Tribunal dismissed the appellant's challenge to the addition, stating that no submissions or evidence were provided to explain the source of the deposit or the credit worthiness of the creditor. The Tribunal found no error in the orders of the authorities below and dismissed the appellant's appeal on this ground.

3. The appellant had raised substantial questions of law regarding the legality of the orders and the addition under section 68 of the Act. The Tribunal's findings, based on the lack of evidence provided by the appellant, led to the dismissal of the appeal. The concurrent findings of the authorities below were deemed legal and not shown to be perverse. As a result, the appeal was dismissed, and no substantial question of law was found to arise from the issues raised by the appellant.