Sec. 68 Mere Establishing Identity of Creditors is not sufficient

The issue raised in this appeal is confined to assessment of an amount of ₹ 1,66,01,834/- as the income of the assessee on the ground that he failed to prove the genuineness of the transaction and the capacity of the donor, his brother, to advance the money as required under Section 68 of the Income Tax Act.

ITAT Held that genuineness of the transaction and the creditworthiness of the creditor ought to have been proved by the assessee by producing necessary documents with respect to the monetary ability of the creditor to make such substantial gifts to the assessee. Although it is seen from the records that, assessee and his brother had at different points of time promised to make available documents to prove these requirements of Section 68, such documents were not made available at any stage of the proceedings. In fact, even in the affidavit dated 11.02.2015 filed by Sri.Sudeep Thomas, the assessee’s brother, before this Court, apart from furnishing his employment particulars and confirming the gift that he made and also furnishing the details of the utilisation of the amounts by the assessee, he has not made any endeavour to explain the genuineness of the transactions or his creditworthiness. In such circumstances, we are not in a position to find any illegality in the order of the Assessing Officer confirmed by the first appellate authority and the Tribunal assessing the sum of ₹ 1,66,01,834/- as the income of the assessee.

Full Text of the ITAT Order is as follows :-

This appeal is filed by the assessee challenging the order of the Income Tax Appellate Tribunal, Cochin Bench in ITA 19/2014 concerning the assessment year 2009-2010. The issue raised in this appeal is confined to assessment of an amount of ₹ 1,66,01,834/- as the income of the assessee on the ground that he failed to prove the genuineness of the transaction and the capacity of the donor, his brother, to advance the money as required under Section 68 of the Income Tax Act. The said order was confirmed by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal by dismissing the appeals filed by the assessee. It is in this background, the assessee has filed these appeals framing the following questions of law for consideration of this court: