2023 (12) TMI 1041 - HC - Income Tax

Addition u/s 68 - onus to prove - ITAT sustained addition - HELD THAT - Tribunal correctly concluded that once unexplained credit was found in the books of accounts, the initial onus under Section 68 of the Act lay on the assessee. Tribunal held that there was no material except the assertion of the appellant/assessee that he was merely an entry provider and, therefore, only the amount received as commission ought to have been added to his income. Appellant made a valiant attempt to defend the position of the appellant/assessee by submitting that the appellant/assessee could not assist the AO in unravelling the truth, since Mr Dinesh Prasad had expired immediately after the assessment order was passed in the first round. Having regard to the record and the approach adopted by the Tribunal, we are unable to persuade ourselves that this is a fit case for interfering with the impugned order. No substantial question of law arises for our consideration.

Summary

Issues:
The judgment concerns an appeal regarding Assessment Year (AY) 2005-06 where the appellant challenges the order passed by the Income Tax Appellate Tribunal sustaining an addition made by the Assessing Officer under Section 68 of the Income Tax Act, 1961.

Assessment of Addition under Section 68:
The Tribunal upheld the addition made by the Assessing Officer, which was contested by the appellant. The Commissioner of Income Tax (Appeals) had also upheld the AO's order, leading to the dismissal of the appellant's appeal. The Tribunal's decision was based on the lack of evidence establishing the appellant had earned a certain amount in the relevant AYs. The AO considered the appellant an entry provider and required proof of the source of cash receipts in the bank account.

Contentions and Arguments:
The appellant's representative argued that only the commission received by the appellant should have been added to the income, emphasizing that the appellant acted as a conduit for funds received from a relative. The appellant had provided a list of 280 investors, with some denying any transactions with the appellant. The Tribunal found that the information provided during the remand proceedings was not significantly different from the first round.

Judicial Analysis and Conclusion:
The Tribunal concluded that the unexplained credit in the accounts placed the initial burden on the assessee under Section 68 of the Act. Despite arguments about the inability to provide further assistance due to the demise of a key individual, the Tribunal found no grounds to interfere with the order. The court concurred with the Tribunal's decision, stating that no substantial legal question arose for consideration, leading to the closure of the appeal and related applications.