Anish Rajnikant Shah Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that genuineness of transaction, creditworthiness and identity of creditors not proved, hence addition u/s. 68 of the Income Tax Act towards unexplained credit duly sustained.
Facts- AO, from the ITS statement, noticed that the assessee has made cash deposit in his Saving Bank Account maintained with IDBI Bank, amounting to Rs.21,51,200/-. The assessee has not filed its return of income u/s 139, for the impugned assessment year, and the source of cash deposit remained unexplained. The assessment in the case of the assessee was reopened by the AO u/s.147 of the 1961 Act and notice u/s.148 of the Act was issued by the AO to the assessee.
Rejecting the contentions of the assessee, AO made addition of Rs. 21,51,200/- as unexplained cash credit u/s. 68. CIT(A) dismissed the appeal of the assessee. Being aggrieved, the present appeal is filed.
Conclusion- Held that the assessee has not discharged even its primary burden of explaining the nature of its business, his eligibility to avail the beneficial scheme of taxation u/s 44AD and also the admitted transactions in his bank account wrt cash deposits to the tune of Rs. 21,51,200/-, the sources of such cash deposits remained unexplained. The initial and primary burden is on the assesssee to explain sources of all the credits in his bank account and to substantiate genuineness of the transactions, creditworthiness and identity of the creditors. The Provisions of Sub-section 5 of Section 44AD as it was prevailing at the relevant time(now there is an amendment) that no books of accounts were required to be maintained by the assessee could have been pleaded/contended by the assessee only once the assessee had discharged its primary onus/burden that the assessee is an eligibile assessee carrying out eligible business as is stipulated u/s 44AD, which in the instant case the assessee failed to do so.
