Transaction tax

Addition u/s 68 will stand when assessee failed to prove authenticity of cash credit: ITAT

cash credit - ITAT - taxscan

The Income Tax Appeal Tribunal, Allahabad Bench, has ruled that the addition under Section 68 of the Income Tax Act 1961 will stand when the assessed n failed to prove the authenticity of cash credit.

The assessee, Ghaus Memorial Sahkari Awas Samiti Ltd, a co-operative society, was aggrieved by the assessment order dated 26.03.2014 passed by u/s 143(3) of the 1961 Act which added to amount of Rs. 1,67,51,761/- to assessee’s income for unexplained cash deposits/credits u/s 68 of the 1961 Act. CIT(A) in the first round of litigation upheld the additions made by the AO.

The assessee filed a second appeal with the court and the court ordered that the matter be reinstated in AO’s file for verification and to limit the addition to the amount of new unexplained deposits raised during the year of review. evaluation disputed by the person evaluated and to delete the additions to the deposits. high the previous year.

It was argued that despite several opportunities given to the assessee, no evidence/explanation was filed by the assessee to satisfy the mandate of Section 68 of the 1961 Act.

It was observed that the assessee raised an advance for land received from its members, which amounted to Rs. 5,32,53,535/- according to the audited balance sheet of the assessee, including the new amount of deposits cash credits collected by the assessee during the reporting year amounted to Rs. 64,62,054 which stood added by ld. CIT(A) u/s 68 of the 1961 Act, and which requires our decision.

The deposits being an advance for members’ land to the tune of Rs. 64,62,054/- are recorded in the form of cash credits which are recorded in the account books of the assessee, and it was the responsibility of the assessee to explain the identity and creditworthiness of the creditor and the authenticity of the transaction.

The Tribunal observed that the assessee did not present any evidence/explanation to discharge his charge under Section 68 of the 1961 Act.

While dismissing the appeal filed by the assessee, Shri Vijay Pal Rao, Judicial Member and Shri Ramit Kochar, Accountant Member, observed that the charge u/s 68 was on the assessee who had failed to s’ acquit, so there was no need to interfere with the previous order. Shri AK Singh appeared on behalf of the Respondent and none appeared for the Appellant.

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Ghaus Memorial Sahkari Awas Samiti Ltd vs ACIT

CITATION: 2022 TAXSCAN (ITAT) 1232