Law:

Section:

Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 1993-94 - Whether where certain sum was found credited in bank account of assessee in respect of which assessee explained that said amount represented gifts which were remitted by close relatives of assessee from abroad on some family function and assessee also filed affidavit of said persons but neither relationship nor occasion of gifts was mentioned in affidavit, in said circumstances, it could be said that assessee had failed to prove genuineness of said transaction and, accordingly, said amount was to be treated as unexplained income of assessee under section 68 - Held, yes FACTS The assessee filed his return of income for the relevant assessment year. A search and seizure operation was conducted at the business premises of certain concern with which the assessee was connected. During the examination of the cases, it was found that the assessee was having a joint account along with one ‘R‘ in which credit entries were found. The assessee was required to explain the source of credit entries. During the course of assessment, a show-cause notice was issued to the assessee to explain the source of the said credit entries but the assessee failed to explain the source of said credit. Accordingly, the cash credits found in the saving bank account were treated as unexplained income of the assessee, as per section 68. On appeal before the Commissioner (Appeals), the assessee explained that gifts in cash were received on the occasion of marriage of his daughter as ‘shaguns' from the relatives and close friends residing abroad and he further stated that he had also filed affidavits of the concerned persons for supporting his plea before the Assessing Officer. The Commissioner (Appeals), however, held that the assessee could not establish that there was any marriage or any function in the family during the period when the gifts were stated to have been received by him to justify the deposit. Accordingly, the plea of the assessee, regarding gifts received from the alleged friends and relatives, was found to be false and the additions were, accordingly, sustained. On further appeal, the Tribunal…

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