SHREE MAHAMALXMI GRAMIN BIGEARSHETI SAHAKARI PATSANSTHA,AURANGABAD vs. ITO, WARD 1 (5), AURANGABAD

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ITA 1605/PUN/2024Status: DisposedITAT Pune20 June 2025AY 2018-194 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 1,00,000/- on account of unexplained cash credits under Section 68 of the Income Tax Act, 1961, was not justified. The Tribunal noted that the assessee had provided the PAN of the creditor, Shri. Ram Kumar Gupta, along with a confirmation letter and the creditor's bank statement. The Tribunal found that the assessee had discharged the initial onus of proving the identity and genuineness of the transaction. While the AO had raised doubts about the creditworthiness of the creditor, the Tribunal observed that the assessee had furnished sufficient evidence to establish the transaction. The Tribunal referred to the decision in _CIT vs. Lovely Exports (P) Ltd._ (supra) and _CIT vs. Oasis Hospitalities (P) Ltd._ (supra), which emphasize that once the identity and genuineness are established, the burden shifts to the revenue to prove otherwise. Since the revenue had not brought any material on record to controvert the evidence provided by the assessee, the Tribunal deleted the addition. The operative direction was the deletion of the addition of Rs. 1,00,000/-.

What were the facts?

The assessee, Mr. Suresh Kumar Gupta, is in appeal against the order of the Commissioner of Income Tax (Appeals)-2, Pune, dated 27.02.2024, for the Assessment Year 2018-19. The appeal arises from the assessment order passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961. The AO had made an addition of Rs. 1,00,000/- to the assessee's income on account of unexplained cash credits. The assessee contested this addition before the CIT(A), but the appeal was dismissed, upholding the AO's order. The present appeal is filed before the Income Tax Appellate Tribunal (ITAT) challenging the CIT(A)'s decision.

What were the issues?

1. Whether the addition of Rs. 1,00,000/- on account of unexplained cash credits under Section 68 of the Income Tax Act, 1961, is justified, considering the evidence produced by the assessee? Assessee's Contention: The assessee argued that the cash credit of Rs. 1,00,000/- was received from Shri. Ram Kumar Gupta, who is a known person. The assessee submitted that the identity, creditworthiness, and genuineness of the transaction were established by providing the PAN of the creditor, his bank statement, and a confirmation letter. The assessee relied on the principles laid down in the Supreme Court judgment in the case of _CIT vs. Lovely Exports (P) Ltd._ (2008) 297 ITR 311 (SC) and the Delhi High Court judgment in _CIT vs. Oasis Hospitalities (P) Ltd._ (2010) 324 ITR 329 (Del). The assessee contended that the AO erred in making the addition without properly appreciating the documentary evidence. Revenue's Contention: The revenue, through the AO and upheld by the CIT(A), contended that the assessee failed to discharge the primary onus to prove the genuineness of the cash credit. The revenue argued that merely providing the PAN and confirmation from the creditor was not sufficient to establish the creditworthiness and genuineness of the transaction, especially when the source of funds of the creditor was not adequately explained. The revenue relied on the AO's findings that the creditor's financial capacity was not established.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1605/PUN/2024

Assessment Year : 2018-19

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