INITIAL ONUS UNDER SEC.68

[vsaiyar]

Courts and Tribunals have expressed themselves what is the initial proof required to be submitted to the assessing autority.  It is not sufficient to file a confirmation from the lender or crediltor or for that matter furnishing of PAN and bank account details.  What details the courts expect the assessees to maintain to discharge the initial onus?  I refer to the decision of the Kerala high Court in [2012] 20 taxmann.com 402 (Kerala) Whether where assessee only produced confirmation letters from creditors without any further material regarding identity, status or capacity of creditors or even dates on which impugned loans were given, addition made by Assessing Officer could not be faulted with. 

[nitinbhalla]

The extent of onus on assessee as decided by most of the courts are that:

I) Identity of the creditor

II) Creditworthiness of the creditor

III) Genuineness of the transaction occurred with the creditor.

To prove the identity the name; address & PAN Number of the creditors is sufficient. If the creditor is a director, partner them identity is definitely proved strongly.

To Prove the creditworthiness of the creditor bank statement & ITR's whether assessed to tax or not, are required.

To prove the genuineness of the transaction, it is a sufficient proof that it should have to occurred through an account payee cheque; for this file the bank statement of the assessee. If it is not occured through account payee cheque then prove genuineness otherwise.