INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Cash deposits - Assessee proved identity and credit worthiness of creditors and genuineness of transactions---Treatment as unexplained cash credit

AO noticed that assessee deposited some cash in her bank account. Assessee explained that the said cash deposits were made out of amounts received from her brother and mother. She furnished confirmation letter obtained from her brother, statement of his total income and income tax return copies of her mother to substantiate her claim. AO, however, held that the assessee had not substantiated her explanations with corroborative evidences and accordingly, added the said amount as unexplained cash credit under section 68. Held: It was the claim of the assessee that alleged cash deposits were made out of amount received from her brother and mother. Further, both assessee's mother and brother were assessed to income tax and copies of statement of total income/income tax returns were furnished to show that both the said persons were having credit worthiness to make such payments. Further, though the assessee furnished copies of income tax returns of her mother but a specific confirmation letter was not filed. Nevertheless, the documents furnished by the assessee proved the identity and credit worthiness of both the creditors and since the transactions were between blood relatives, the genuineness of the same could not be doubted. Hence, the addition made under section 68 would not be sustainable.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 68

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