INCOME TAX ACT, 1961

--Income from undisclosed sources--Addition under section 68 Amount received towards share capital/loans not satisfactorily explained--In assessment proceedings assessing officer observed that inspite of sufficient opportunities given amount received towards share capital/loans were not satisfactorily explained by assessee-company and made addition to income. On appeal, Commissioner (Appeals) and Tribunal held that amounts were received by assessee before commencement of commercial operations and the same was capital in nature, not exigible to tax. Held: Was not justified, as whether amount was introduced prior to commencement of business or afterwards was not significant. As per section 68 there was statutory requirement for treating any amount as income of assessee, where it fails to justify and establish its genuineness or unable to furnish any explanation in respect of sum credited in books of account or furnish explanation which was unsubstantial.

Income Tax Act, 1961, Section 68

In the Punjab & Haryana High Court

Ajay Kumar Mittal & Gurmeet Singh Sandhawalia, JJ.

CIT v. Sri Baba Rupadas Spinning Mills (P) Ltd. now M/s BRD Textiles (P) Ltd.

ITA No. 146 of 2005

A.Y. 1994-95

3 October, 2012

Income Tax Act, 1961, S. 68

Decision: Against the assessee.

Appellant by : Rajesh Sethi, Advocate

Respondent by : Sanjay Bansal, Sr. Advocate with Mr. Rajiv Sharma, Advocate