| COURT: | Bombay High Court (Goa Bench) |
| CORAM: | Dama Seshadri Naidu J, M. S. Sonak J |
| SECTION(S): | 68 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | cash credit, unexplained cash credit |
| COUNSEL: | Nikhil Pai, S. S. Kantak, Susan Linhares |
| DATE: | October 14, 2020 (Date of pronouncement) |
| DATE: | October 31, 2020 (Date of publication) |
| AY: | 2006-07 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 68 Bogus Cash Credits: The Revenue can examine the source of the source. Merely pointing out to a source and the source admitting that it has made the payments is not sufficient to discharge the burden placed on the assessees by s. 68. Otherwise, it would be sufficient for assessees to simply persuade some credit-less person to own up having made such huge payments and thereby evade payment of tax on the specious plea that the Revenue can always recover the tax from such credit-less source. The explanation has to be plausible and backed by reliable evidence. 'Fantastic or unacceptable' explanations are not acceptable (All imp verdicts on s. 68 referred) | |
If the ITAT were to have considered the aforesaid circumstances, which, according to us, the ITAT was duty-bound to, we are quite sure that the ITAT would not have, nevertheless, found the so-called explanation of the assessees acceptable or in compliance with the provisions of Section 68 of the said Act. Rather we are inclined to believe, that the ITAT too, would have found the so-called explanation of the assessees too fantastic to deserve any acceptance. In Mussadilal Ram Bharose 1987(2) SCC 39, the Hon’ble Supreme Court has cautioned against acceptance of any ‘fantastic’ or ‘unacceptable’ explanations in tax matters
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