The Tribunal observed that the assessee is required to explain cumulatively about the identity and capacity/credit worthiness of the creditors along with genuineness of the transaction to the satisfaction of the Assessing Officer. In the given case, the assessee had merely submitted the confirmation letter of the creditor along with his PAN. The assessee had neither submitted copies of bank statement of the creditor nor the agreement of sale entered into with the creditor for sale of property. The Tribunal also observed that the said amount which is claimed to have been returned was actually returned after a gap of 3 years in three tranches and that too after the assessee was searched. Further, the assessee had not submitted cancellation deed for cancelling the deal for sale and reasons for such cancellation.

Thus, the Tribunal held that since the assessee failed to establish the identity, genuineness and creditworthiness of the creditor, the addition made by the Assessing Officer to the total income of the assessee to the tune of Rs.2.5 crore is upheld. (AY. 2011-12)