INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Unexplained cash deposit - Assessee explained source of credit

AO observed that there was cash deposit made into assessee's bank account. He called for explanation from the assessee with regard to the source of cash deposit. Accordingly, assessee filed confirmation letter from his creditor, in which the creditor explained that the alleged amount was advanced to assessee from his savings, out of agricultural income and salary. However, assessee failed to produce any evidence to substantiate the sources received by him, therefore, AO added the alleged amount under section 68 as unexplained deposit. Held: Since assessee prima facie furnished the evidence for agricultural land holdings and also explained in the confirmation letter that creditor was having salary income and agricultural income, the AO was required to examine the source in detail in the hands of the donor before making the addition under section 68 and hence, the issue was remitted back to the file of AO to examine the creditworthiness and genuineness of the said source.

REFERRED :

FAVOUR : In assessee's favour (by way of remand).

A.Y. :

INCOME TAX ACT, 1961

Section 68

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