INCOME TAX ACT, 1961
--Income from undisclosed sources--Addition under section 68Cash credits--In assessee's books of account there were certain credits in the names of two persons. Assessee discharged its onus by submitting demand drafts and producing confirmation letters given by the said two persons. The said two persons had appeared before AO and had denied to have any such financial transaction, on the basis of which AO made addition to income of assessee in respect of such cash credits. Held: Was justified. When the persons in whose names credit was shown, themselves denied the transaction, mere production of DD would not assume any significance. Assessee failed to explain such cash credit, therefore, addition of the cash credit was justified.
Income Tax Act, 1961 Section 68
IN THE KARNATAKA HIGH COURT
V.G. SABHAHIT & RAVI MALIMATH, JJ.
CIT, v. S.L.N. Traders
IT Appeal No. 954 of 2006
13 July 2011
Appellant by : M.V. Seshachala
Respondent by :Nitya and K.R. Prasad
V.G. Sabhahit, J.
Appeal filed by the Revenue has been admitted for consideration of following substantial question of law :
'Whether the appellate authorities were right in holding and recording a finding that a sum of Rs. 16,00,000 and Rs. 10,75,000 treated as income of the assessee under section 68 of the Income Tax Act by the assessing officer on the basis of admission made by the assessee and the denial issued by Sri Thimmegowda and Sri D.S. Kumar, the persons who had advanced these amounts was not taken into account and consequently a perverse finding came to be recorded?'