INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Unexplained credits - Assessee duly discharged burden of proof by explaining credit entries

AO made addition on account of credits in bank account of assessee holding that the assessee failed to discharge the burden of proof by not establishing the genuineness of such credits. However, CIT(A) deleted the part addition considering the past savings of the assessee. Assessee submitted that she was working in Government Health Department as an Assistant Surgeon; therefore, some credits were from rotational fund. Further, she explained that the remaining credits were towards cancellation of DD purchased for share trading, towards clearing of a cheque and towards bonds purchased in earlier years. Held: Although CIT(A) considered past savings of assessee but he did not appreciate the explanation of the assessee that he was working in Government Health Department and the credits were from the rotational fund. Further, credit entries regarding cancellation of DD purchased for share trading, clearing of a cheque and purchase of bonds by the assessee in earlier years had not been considered by the CIT (A), which was not justified because the assessee explained the nature of credit entries. Therefore, assessee duly discharged the burden of proof by explaining the credit entries and hence, the AO was directed to delete the addition on account of cash credits in bank account.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2005-06

INCOME TAX ACT, 1961

Section 143

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