The burden of proof under Section 68 of the Income Tax Act requires an assessee to independently establish the identity, genuineness, and creditworthiness of parties in financial transactions, and failure to provide critical details like PAN or addresses justifies an adverse inference.

ORDER

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2011-12 dated 09.10.2025.

2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:

“1. For that the orders passed by the lower authorities are arbitrary, unjust and bad in law and on facts.

2. For that the reopening of assessment u/s 147 based on alleged issuance of notice u/s 148 dated 26.03.2018 is invalid and void ab initio, as no such notice was served upon the appellant within the prescribed time.

3. For that the Ld. CIT(A) is erred in sustaining the addition of 281,50,000/- u/s 68, despite the appellant having fully explained that the said sum represented sale proceeds of shares reinvested in other companies through proper banking channels.

4. For that the identity, genuineness, and creditworthiness of the parties were adequately established through documentary evidence whatever available with the appellant, and the addition was made merely on presumptions and surmises.

5. For that all the transactions were duly recorded in the audited books of accounts, routed through banks, and supported by documentary evidence; therefore, the addition made is unjustified and liable to be deleted.

6. For that the appellant prays that the impugned order be quashed or, alternatively, the matter be restored to the file of the Assessing Officer for fresh adjudication after granting due opportunity to the appellant.

7. For the appellant craves leave to add, alter, modify, or delete any of the above grounds at the time of hearing.”

3. Brief facts of the case are that the assessee company, M/s Narayan Barter Pvt. Ltd. filed its return of income for the AY 2011-12 on 27.09.2011 showing total income of ₹375/-. Subsequently, information was received by the Assessing Officer (hereinafter referred to as Ld. 'AO') from the Dy. Director of Income Tax (Investigation), Units 3(1) and 4(3), Kolkata indicating that the assessee had received ₹81,50,000/- during the FY 2010-11. Based on this information, the Ld. AO noted that income of the assessee had escaped assessment and he reopened the assessment u/s 147 of the Act. Notices u/s 143(2) and 142(1) of the Act were issued and a show cause notice dated 07.12.2018 was also issued seeking explanation for the alleged unexplained cash credit. Since the assessee failed to provide satisfactory explanation regarding the identity, creditworthiness, and genuineness of the creditors and the transactions, the Ld. AO treated the amount as unexplained cash credit u/s 68 of the Act taxable at the rate of 30% u/s 115BBE of the Act. Penalty proceedings under section 271(1)(c) were also initiated for concealment of income of ₹81,50,000/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who considered the observation of the Ld. AO, the submissions of the assessee during the appellate proceedings and noted in respect of the reopening of the case as under:

“During the appellate proceedings, the assessee submitted that the receipts represented bona fide sale transactions of investments and provided details of the cost and sale consideration, along with bank statements showing receipts through banking channels. The assessee argued that it had discharged the initial onus under section 68 by proving the identity of the creditors, the genuineness of the transactions, and the creditworthiness of the parties. Copies of