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| The Tax Publishers2020 TaxPub(DT) 4144 (Bom-HC) : (2021) 432 ITR 0152 : (2021) 276 TAXMAN 0218 INCOME TAX ACT, 1961
Section 68
Where the explanations in the context of section 68 were offered by assessee such explanations have to be considered in the light of human probabilities and same cannot be unreasonably rejected, therefore, addition made by AO focusing almost entirely on this sole circumstance could not be held as justified.
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Income from undisclosed sources - Addition under section 68 - Explanation offered by assessee rejected on sole circumstances -
AO made addition under section 68 rejecting the explanation offered by assessee on the ground that assessee failed to produce proprietors of such entities to whom huge amounts were alleged to have been paid. Held: AO, no doubt, recorded that he was not satisfied with the explanation furnished by the assessee. However, he could not have arrived at such a satisfaction focusing almost entirely on this sole circumstance, but rather, several other circumstances emanating from the record, were also required to be taken into consideration for deciding whether the explanation offered by the assessee deserved acceptance. Thus, following the decision held in case of Sumati Dayal v. CIT ((1995) 80 Taxman 89 (SC) : 1995 TaxPub(DT) 1173 (SC) that the explanations in the context of section 68 have to be considered in the light of human probabilities and the explanations cannot be unreasonably rejected, addition made by AO was deleted.
Followed:Sumati Dayal v. CIT ((1995) 80 Taxman 89 (SC) : 1995 TaxPub(DT) 1173 (SC).
REFERRED :
FAVOUR : In favour of assessee.
A.Y. : 2006-07
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