Law:

Section:

Section 68 read with section 69 of the Income-tax Act, 1961 - Cash credits - Assessment year 1962-63 - Whether for purposes of unexplained income which is contained in books of account it is assessee's previous year which shall be relevant for including such an unexplained credit - Held, yes - Cash credit entry was found recorded on 1-7-1961 - Addition was made in assessment year 1961-62 but was deleted by AAC directing ITO to consider addition in assessment year 1962-63 - In assessment year in question addition was made rejecting explanation as to source of cash credit - Relevant previous year was 16-4-1960 to 15-4-1961 - Whether addition of cash credit in assessment year 1962-63 was not justified - Held, yes FACTS In the course of assessment proceedings for the assessment year 1961-62 (the previous year being 16-4-1960, to 15-4-1961) the ITO found a cash credit entry in the sum of Rs. 20,000 dated 7-4-1961, in the name of SD the wife of the assessee. The assessee could not explain the entry satisfactorily and the amount of Rs. 20,000 was added to the assessee's total income as income from other sources for the assessment year 1961-62 and subjected to tax. It was contended before the AAC that the amount had been included in the computation of total income under the head "Other sources" and the previous year should have been the financial year and as the amount of Rs. 20,000 appeared in his books of account on 7-4-1961, if at all taxable, it should fall for consideration in the assessment year 1962-63 and not in the assessment year 1961-1962. The AAC accepted the assessee's contention and deleted the said amount of Rs. 20,000 from the computation of the income-tax for the assessment year 1961-62 directing the ITO to consider that amount in the assessment year 1962-63 after considering all the evidence. In the assessment proceedings for the year 1962-1963, the ITO disbelieved the explanation of the assessee and treated the amount of Rs. 20,000 as income from undisclosed source of the assessee added the same as the assessee's income from "Other sources". The assessee's case was that as the cash credit entry did not relate to the previous year beginning on…

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