| Question And Answer | |
|---|---|
| Subject: | Cash deposited in bank account and funds transferred to another account. Whether cash deposit can be treated as unexplained credit? |
| Category: | Income-Tax |
| Querist: | Karan shah |
| Answered by: | Research Team |
| Tags: | cash credits, Cash deposits, Unexplained cash credit |
| Date: | June 2, 2021 |
Assessee fell in a trap in one arrangement where one person gave him cash which the assessee deposited in his bank account. And on the same day of cash deposit the funds were transferred back through NEFT to that person’s bank account.
Now the ITO wants to treat cash deposit as unexplained credit. That person is now co-operating and not giving his confirmation that he had instructed assessee to do so. Assessee has given affidavit that the cash which was deposited belongs to that one and also the assessee has transferred the funds back to his account.
No other document is available with assessee to prove that he is genuine and cash does not belong to him.
What grounds is available to assessee to prove his stand and delete the addition ?
Mere filing an affidavit may not be sufficient to prove that the genuineness of transaction, affidavit is self declaration may not prove the genuineness of Transaction . The assessee may have to take legal action against the person by filing a civil suit in an appropriate Court . One may have verify how the other person has shown in his books of account is also important . If the assessee is able to establish that it was genuine business transaction then only the neither provision of section 68 nor section 260SS of the Act may not be applicable . The tax consultant may be able to guide after verifying various documents such as narration in paying slip and entries in books of account etc.