Case Law Details
Ms Shree Krishana Kripa Feeds Vs CIT (Punjab & Haryana High Court)
Hon’ble High Court held that addition on account of undisclosed income is sustainable where creditworthiness of parties and genuineness of transaction was not established by assessee.
The genuineness and credit worthiness of these unsecured loans have not been established by the assessee and the initial onus had therefore not been discharged by the assessee. On the other hand the assessee has only emphasized that Income Tax Return, PAN and other details have been filed by the assessee before the AO and therefore the credit worthiness of the parties has been established. However, the AR has not provided the details of returned income of the parties and the explanation for deposit of cash by one person immediately before cheques were issued to the appellant. Establishing the credit worthiness and genuine would imply that the parties would be having sufficient surplus savings and funds backed by capital assets to provide loan to the assessee. Merely by providing the Income Tax Return and PAN number is not enough to establish the creditworthiness and genuineness of the unsecured loans.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
This is an application under Order 41 Rule 27 of the Code of Civil Procedure for placing on record additional evidence.
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