INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Cash credit -

During assessment proceeding, AO found that assessee had taken unsecured loan from amongst others. Assessee was asked to submit loan confirmation as well as copy of the returns of income and bank statements. Though assessee submitted the details, AO was not satisfied and took the view that genuineness of the loan was not established by assessee. Consequently, the amount was added back to the total income of assessee under section 68 as unexplained cash credit. CIT(A) and Tribunal sustained the addition. Held: In view of discharge of burden by assessee, burden shifted to revenue but revenue could not prove or bring any material to impeach the source of the credit. Though Revenue pointed out that creditor had no regular source of income to justify the advancement of the credit to assessee, assessee had discharged the onus which was on him to explain the requirements. It was not required for assessee to explain the sources of the source. Therefore, Tribunal was not justified in sustaining the addition on account of undisclosed cash credit under section 68.

REFERRED : Pr. CIT v. Veedhata Tower Pvt. Ltd. (2018) 403 ITR 415 (Bom) : 2018 TaxPub(DT) 2030 (Bom-HC) Gaurav Triyugi Singh v. ITO [ITA NO.6160/Mum/2016, dt. 11-5-2017]

FAVOUR : In assessee's favour

A.Y. :

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