| COURT: | Bombay High Court |
| CORAM: | Milind D. Jadhav J, Ujjal Bhuyan J |
| SECTION(S): | 68 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | onus, Section 68 cash credit, source of income |
| COUNSEL: | Dharan Gandhi |
| DATE: | January 22, 2020 (Date of pronouncement) |
| DATE: | February 5, 2020 (Date of publication) |
| AY: | 2010-11 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 68 Cash Credits: The assessee is only required to explain the source of the credit. There is no requirement under the law to explain the source of the source. The fact that the source of the source is suspect and that the creditor had no regular source of income to justify the advancement of the credit to the assessee does not mean that an addition can be made in the hands of the assessee (Veedhata Tower 403 ITR 415 (Bom) followed) | |
Section 68 of the Act has received considerable attention of the courts. It has been held that it is necessary for an assessee to prove prima facie the transaction which results in a cash credit in his books of account. Such proof would include proof of identity of the creditor, capacity of such creditor to advance the money and lastly, genuineness of the transaction. Thus, in order to establish receipt of credit in cash, as per requirement of section 68, the assessee has to explain or satisfy three conditions, namely : (i) identity of the creditor; (ii) genuineness of the transaction; and (iii) credit-worthiness of the creditor
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