· The assessee, a partnership firm, was engaged in construction of a market place. The case of the assessee was selected for scrutiny and it was found that the assessee had received some booking deposits. The AO held that the said entries were not genuine and made the addition under Section 68 of the Act.
· The Tribunal, however, observed that all the persons from whom deposits were received were income tax assessee and were having PAN numbers. It was further observed that the amounts were received through proper banking channels and the copy of accounts of each of the depositors was also filed by the assessee. Therefore, the Tribunal deleted the addition made by the AO.
· On appeal filed by the Department, the Hon’ble High Court held that the Tribunal has rightly observed that the assessee has duly discharged the onus cast upon it. The Hon’ble Court further relied upon the judgment of Dy. CIT vs. Rohini Builders [2002] 256 ITR 360.
· It has been held by the Hon’ble Court that the assessee need not prove the source of the credits and the fact that the explanation was not satisfactory would not automatically result in deeming the amounts as income of the assessee.
For further reading, refer the attachment.
Further Reading