Sreepathy Trust Vs DCIT (ITAT Cochin)
Assessee is a trust registered under Section 12AA & the original assessment was completed u/s 143(3). It was reopened u/s 147 based on information received regarding certain cash credits that remained unexplained. Assessee filed return in response to 148 notice. During the reassessment proceedings, AO specifically asked the assessee to furnish complete details of persons from whom loans or advances had been received. This included names, addresses, dates, amounts, modes of receipt/payment & bank statements. Assessee submitted a list of such persons. However, according to the AO, many of these submissions lacked corroborative evidence such as bank account statements or balance sheets of the creditors. AO made an addition of ₹1,37,19,323 to the returned income u/s 68, treating the same as unexplained cash credit. The reassessed total income was computed at ₹3,40,53,543.
CIT(A) observed that while the assessee had provided certain lists of depositors or creditors, it failed to reconcile the same with the earlier submissions made by the assessee. Moreover, the assessee could not furnish reliable documentary evidence such as bank statements & financials to establish the identity, creditworthiness, & genuineness of the transactions. CIT(A) concluded that the three essential limbs for accepting a cash credit u/s 68 namely, identity of the creditor, creditworthiness, & genuineness of the transaction had not been satisfied in most cases. Consequently, the appeal was dismissed.
