Khushi Doshi
Published on: March 9, 2022 at 12:38 IST
The Delhi Bench of India’s Income Tax Appellate Tribunal (ITAT) , Comprised of Members G.S. Pannu (President) and K. Narsimha Chary (Judicial Member), has ruled that an Assessing Officer has the authority to verify transactions in addition to the paperwork submitted by the Assessee under Section 68 of the Income Tax Act, 1961.
Under Section 68 of the Income Tax Act of 1961, the Assessing Officer disallowed expenses and added to the Assessee’s Income on the grounds that the transaction of loans and advances by an Advisory Company for investment in the Assessee Company was not genuine.
The Assessee filed an Appeal with the Commissioner of Income Tax (Appeals) against the Income additions.
The CIT (A) dismissed the Appeal after concluding that the Assessee had failed to discharge the onus under Section 68 of the Act to explain the source of funds for the amount added to the Income. The Assessee filed an Appeal against this order with the India’s Income Tax Appellate Tribunal.
Section 68 of the Income Tax Act of 1961 states that if a sum is discovered credited in an assessee’s books for any previous year and the Assessee provides no explanation about the nature and source of the sum, or his explanation is not satisfactory in the opinion of the Assessing Officer, the sum may be charged to income tax as the Assessee’s Income in the Relevant Year.
The ITAT therefore dismissed the Appeal and upheld the Order of the CIT (A).
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What is Income Tax Appellate Tribunal?