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TMI Blog2024 (7) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... e revealed that on close scrutiny the investment which was made by the said two companies their proof of identity of creditors and the capacity of creditors to advance money and genuineness of transaction fell apart when the company was found to be non-existent. It is the first barrier, therefore, the onus of Section 68 of the Act, 1961 is to be discharged by the assessee and having failed to do so. Accordingly, no question of law appears to be arises for consideration. - HON'BLE SHRI JUSTICE GOUTAM BHADURI HON'BLE SMT. JUSTICE RAJANI DUBEY For the Appellant : Shri Sidhdharth Dubey, Advocate For the Respondent : Ms. Naushina Afrin Ali, Advocate along with Shri Ajay Kumrani, Advocate on behalf of Shri Amit Chaudhari, Advocate JUDGMENT PER GOUTAM BHADURI, J Heard. 1. The instant appeal has been filed against the order dated 29/11/2023 passed by the Income Tax Appellate Tribunal (hereinafter referred to as the ITAT ), whereby the order passed by the Commissioner of Income Tax (Appeals) adding Rs. 1,87,00,000/- was upheld. 2. The brief facts of the case are that in respect of the F.Y. 2013-14 and A.Y. 2014-15, the original return was filed by the appellant-company on 30/09/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g been subjected to assessment, there cannot be double taxation towards the M/s Sumit Global Pvt Ltd i.e. the appellant herein. He placed his reliance on the ratio laid down by the Delhi High Court in the matter of PRO Commissioner of Income Tax Vs. Vijay Conductors India Pvt Ltd, and other connected matters {2015 (9) TMI 1519-Delhi High Court} to submit that the assessee and Eagle Commotrade Pvt. Ltd. and M/s Krishnakali Distributors Pvt Ltd, if were found to be conduit entities/non-existing and if ultimate beneficiary was Rashi Steels, the appellant cannot be subjected to assessment and it cannot be added to the income of the appellant. He would further submit that Section 68 of the Act, 1961 uses the word may and if it has been found that Rashi Steels is the ultimate beneficiary and the present appellant along with Eagle Commotrade Pvt. Ltd. and M/s Krishnakali Distributors Pvt Ltd are continued companies then there is no mandate to impose the tax liability as the Rashi Steels is already under assessment to tax. 6. Per contra, learned counsel for the respondent opposes the submission advanced by learned counsel for the appellant. She would submit that since the appellant was par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, the requirement of Section 68 of the Act, 1961 was to be satisfied. 9. For the sake of brevity Sections 133 (6) Section 68 of the Act, 1961 are reproduced hereinbelow:- 133. Power to call for information.- xxx xxx xxx xxx xxx xxx xxx xxx xxx (6) require any person, including a banking company or any officer thereof, to furnish information in relation to such points or matters, or to furnish statements of accounts and affairs verified in the manner specified by the Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or the Commissioner (Appeals)], giving information in relation to such points or matters as, in the opinion of the Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or the Commissioner (Appeals)], will be useful for, or relevant to, any [inquiry or] proceeding under this Act: Provided that the powers referred to in clause (6), may also be exercised by the [Principal Director General or Director General], the [Principal Chief Commissioner or Chief Commissioner], the [Principal Director or Director] [or the Principal Commissioner or Commissioner or the Joint Director or Deputy Director or Assistant Director]: [ Provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 68 of the Act, 1961. It primarily laid down that the initial onus is on the assessee to establish proof of identity of the creditors; capacity of creditors to advance money; and genuineness of transaction. The Court at para 9.3 9.5 has reiterated the principle laid down by the Court, which are reproduced hereinbelow:- 9.3. As per settled law, the initial onus is on the assessee to establish by cogent evidence the genuineness of the transaction, and creditworthiness of the investors under Section 68 of the Act. The assessee is expected to establish to the satisfaction of the assessing officer [ CIT v. Precision Finance (P) Ltd., 1993 SCC OnLine Cal 384 : (1994) 208 ITR 465] : Proof of identity of the creditors; Capacity of creditors to advance money; and Genuineness of transaction This Court in the landmark case of Kale Khan Mohd. Hanif v. CIT [Kale Khan Mohd. Hanif v. CIT, (1963) 50 ITR 1] and, Roshan Di Hatti v. CIT [Roshan Di Hatti v. CIT, (1977) 2 SCC 378 : 1977 SCC (Tax) 292 : (1977) 107 ITR 938] laid down that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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