Merely disowning bank accounts does not exempt assessee from paying tax on unexplained credits: ITAT Delhi

Arun Duggal v. SCIT (ITA No. 3075/Del/2018)

Facts:

1. Assessee feigned ignorance about the bank accounts opened in his name with full authority and knowledge.

2. Owing to unexplained credits in the bank account, the addition of Rs 12.81 Crores was made by the Assessing Officer under Section 68 of the Act.

Note: 

ITAT held as below:

1. Addition under Section 68 was rightly made, as the assessee failed to offer any explanation with regard to nature and source of credit in his bank account and the primary burden cast upon the assessee for proving the credits has not been discharged either before AO or CIT(A) or before us.

2. So the action under Sections 147, 148 as well as the addition made under Section 68 was affirmed and the appeal of the assessee was dismissed.

It may be noted that where any sum is found credited in the books of the assessee for any previous year, it may be charged to Income Tax as the income of the assessee for that previous year if the explanation offered by assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. This has been uoheld in Vasantibai N. Shah v. CIT (Bom.) 213 ITR 805 as well as in Sreelekha Banerjee v.  CIT (SC) 49 ITR 112].

There are lots of taxpayers who auhorises the friends or employer in good faith. They may note the outcome of the above judgments.