DCIT Vs Geneva Industries Ltd. (ITAT Bangalore)
The assessing officer found certain incriminating material suggesting payments outside books of account. The assessee was confronted with this information, the Managing Director of the assessee-company denied having made any undisclosed Investments but the assessing officer had drawn adverse inference from the conduct of the assessee and held that it is unexplained investment. On appeal before the learned Commissioner (Appeals) this came to be deleted by holding that the assessing officer was not justified in bringing to tax based on the loose scribbling found in the loose sheets. In the backdrop of these facts, we are required to adjudicate whether addition of Rs. 183 lakhs was justified under section 69 of the Act. It is trite law that the initial burden of proving is always on the assessee to show that the transactions in loose sheets are not in the nature of income and reliance in this regard can be placed on the decision of the Hon’ble Supreme Court in the case of CIT v. Mussadilal Ram Bharose (1987) 165 ITR 14 (SC). In the present case, the assessee merely denied it without tendering any credible explanation. In our considered opinion, this does not amount to due discharge of initial burden on the part of assessee and therefore the assessing officer was justified in drawing adverse inference and making addition of Rs. 183 lakhs.
