Unexplained credit sustained if nature of credit not proved

Mahamaya Exports Pvt. Ltd. Vs ACIT (ITAT Delhi)

ITAT Delhi held that the onus is on the assessee to prove both source and nature of the credits in case of unexplained credit u/s 68. Unexplained credit will sustain in case the assessee fails to prove any of the same.

Facts-

AO noticed that the assessee has shown a balance of Rs.148,93,34,700/- on account of sundry creditors. Accordingly, the assessee was required to furnish the details of such sundry creditors along with a copy of accounts of the creditors and confirmations from the respective creditors with the nature of the transaction.

Assessee stated that out of Rs.148,93,34,700/- a sum of Rs.8.40 crores was received in advance against the sale of property and the balance of Rs.140,53,34,700/- has arisen as a liability due to cancellation of the agreement to sell the property.

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