Case Law Details
M/s. Janatha Trading Corporation Vs DCIT (ITAT Cochin)
The contention of the AR is that the assessee has produced the confirmations from the partners and that being found insufficient by the AO, the AO ought to have called for more details. In other words, it was the contention of the Ld. AR that on production of confirmation letters, the assessee’s burden stands discharged and it was for the AO to prove otherwise. We are unable to agree with the same. It is the primary duty of the assessee to establish the identity of the parties, capacity of the lenders and the genuineness of the transactions. If the assessee files only confirmation letters and offers no explanation regarding the nature and source thereof, the explanation offered by the assessee cannot be considered as satisfactorily explained before the AO. Then the sum so credited is to be treated as unexplained credits. In the present case, though the amount was contributed by the partners as their capital introduction, only confirmation letters from the partners cannot prove all the ingredients of section 68 of the Act and it will only prove the identity of the lenders. In our opinion, the assessee has to place necessary evidence regarding the nature and source of credit by filing corresponding financial statements along with the income tax returns of the concerned partners before the AO. Hence, in the interest of justice, we are inclined to remit the issue to the file of the AO for fresh consideration in accordance with law after giving reasonable opportunity of hearing to the assessee.
FULL TEXT OF THE ITAT JUDGMENT
These two appeals filed by the assessee are directed against the order of the CIT(A)-II, Kochi dated 03/12/2013. The relevant assessment years are 2008-09 and 2010-11.
2 There was a delay of 145 days in filing the appeal before the Tribunal. The assessee has filed a petition accompanied with affidavit dated 13/08/2014 stating that the delay was due to inadvertent mistake and also on account of assessee’s sickness and prayed to condone the delay for which the Ld. DR has not opposed it. In our opinion, there is good and sufficient reason for condoning the short delay of 145 days. Accordingly, we condone the delay and the appeal is taken up for adjudication.
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