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| The Tax Publishers2020 TaxPub(DT) 4871 (Mum-Trib) INCOME TAX ACT, 1961
Section 68
Since there was evidence that assessee had encashed FDR along with interest, it was an established source for assessee leading to increase in cash balance and, therefore, no addition was called for under section 68 on account of capital introduction by assessee in his proprietary concern.
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Income from undisclosed sources - Addition under section 68 - Introduction of capital in proprietary concern - Assessee explained source to be encashment of FDR along with interest
AO doubted source of capital introduction by assessee in his proprietary concern. Assessee explained that he was holding FDR with Tata Finance of Rs. 1,10,000 and interest accrued on above FDR of Rs. 26,830. During the year, assessee liquidated said deposit and interest. AO rejected this alleging that such source of income would not increase cash flow to assessee.Held: Since there was evidence that assessee had encashed FDR along with interest, it was an established source for assessee leading to increase in cash balance and, therefore, no addition was called for under section 68 on account of capital introduction by assessee in his proprietary concern.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2004-05
INCOME TAX ACT, 1961
Section 68
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