INCOME TAX ACT, 1961

Section 69

Income from undisclosed source - Addition under section 68 - Cash deposit explained by assessee as gift received from his father-in-law and mother-in-law - Validity of

During the year, assessee had declared net profit at the rate of 6.51%. AO observed that assessee had deposited cash in Co-operative Bank on various dates. It was asked to explain the source of the cash deposits. Assessee submitted that the said deposits were out of gift received from her father-in-law and mother-in-law which they received from sale proceed of agricultural land. AO was of the view that burden placed upon assessee under section 69 was not discharged. However, credit was given to part amount and the balance was added in the hands of assessee Held: Assessee had failed to link the sale proceeds of agricultural land received by her father-in-law with the amounts given as hand loans to various persons. The whole exercise is an after-thought by the assessee and the amount if received after the death of father-in-law should be available with assessee in lump sum and there was no requirement to deposit the amount in bank in bits and pieces on different dates. There was no merit in the stand of assessee in this regard. Hence, assessee had failed to explain the source of deposits and in the absence of any evidence linking its claim to the evidences available, addition under section 69 was rightly made

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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