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As per the provisions of Section 68 of the Income Tax Act, 1961, where any sum is found credited in the assessee’s books and assessee offers no explanation about the nature and source thereof or the explanation furnished is found to be unsatisfactory, the sum so credited may be charged to Income-Tax as the income of the assessee of that previous year.To avoid the rigors of Section 68, the assessee must prove the identity, creditworthiness of the lenders / investors to advance such monies and genuineness of the transactions. In the first appellate proceedings, it was held that assessee had produced sufficient evidence in support of proof of identity of the creditors and confirmation of transactions by many documents, such as, share application form etc. First appellate authority also noted that there was no requirement under Section 68 of the Act to explain source of source. Assessing Officer was not justified in making the additions. Therefore, the additions were deleted. Tribunal noted that before the Assessing Officer, assessee had submitted the documents of the creditors.
Tribunal held that The assessee, in support of transactions, has placed on record similar set of documentary evidences. Facts being pari-materia the same, our adjudication as for AY 2011-12 shallmutatis mutandisapply to this year also. Resultantly, the appeal stands partly allowed. Both the appeals stand partly allowed.

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Sec. 68 of Income Tax Act, 1961—Cash Credit— It is settled position of law that to avoid the rigors of Section 68, the assessee must prove the identity, creditworthiness of the lenders / investors to advance such monies and genuineness of the transactions - On a thorough consideration of the matter, the first appellate authority had returned a clear finding of fact that assessee had discharged its onus of proving identity of the creditors, genuineness of the transactions and creditworthiness of the creditors which finding of fact stood affirmed by the Tribunal, thus, no question of law arises - BINI BUILDERS PVT. LTD. V/s DEPUTY CIT - [2020] 185 ITD 236 (ITAT-MUMBAI)