Facts of the Case

The assessee, Mohd. Murtuza Siddiqui, was subjected to scrutiny assessment by the Assessing Officer. During the assessment proceedings, certain financial transactions and credits appearing in the assessee’s accounts were questioned.

The Assessing Officer treated the impugned amounts as unexplained and made additions to the income of the assessee on the ground that satisfactory evidence regarding the source and genuineness of the transactions was not furnished.

The Commissioner of Income Tax (Appeals) upheld the additions made by the Assessing Officer. Aggrieved by the appellate order, the assessee preferred an appeal before the Income Tax Appellate Tribunal, Agra Bench.

Issues Involved

  1. Whether the additions made by the Assessing Officer were justified in law.
  2. Whether the assessee discharged the burden of proof regarding the nature and source of the impugned amounts.
  3. Whether the appellate authority properly considered the evidence produced by the assessee.

Petitioner’s Arguments (Assessee)

  • The additions were made without properly appreciating the documentary evidence submitted.
  • The transactions in question were genuine and duly supported by records.
  • The Assessing Officer adopted an arbitrary approach and ignored relevant explanations.
  • The burden placed on the assessee was excessive and not in accordance with law.

Respondent’s Arguments (Department)

  • The assessee failed to satisfactorily establish the identity, creditworthiness, and genuineness of the transactions.
  • Supporting evidence was either insufficient or not reliable.
  • The Assessing Officer and CIT(A) had rightly concluded that the amounts were unexplained and taxable.

Court Order / FINDINGS (ITAT)

  • The burden of proving the nature and source of disputed credits lies on the assessee.
  • Mere assertions without credible documentary support are insufficient.
  • Where the assessee fails to substantiate the explanation, additions under the relevant provisions of the Act are justified.
  • The lower authorities acted within their jurisdiction in evaluating the evidence.

Important Clarification

  • Cash deposits in bank accounts are subject to strict scrutiny under the Act.
  • The assessee must establish the source through credible documentation.
  • Mere verbal explanations or general statements are insufficient to discharge the burden of proof.
  • Each case is decided on its own facts and evidentiary support.

Link to download the order –

https://itat.gov.in/public/files/upload/1616736456-ITA%20%20155%20of%202019%20%20%20Mohd.%20Murtuza%20siddiqui.pdf

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