Law:

Section:

SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDITS - ADDITIONS WERE MADE TO ASSESSEE'S INCOME ON ACCOUNT OF CASH CREDIT - AT SECOND APPEAL STAGE, ASSESSEE TOOK PLEA THAT AMOUNT WAS COVERED BY INTANGIBLE ADDITIONS MADE IN ASSESSMENT FOR PRECEDING YEAR - WHETHER TRIBUNAL WAS JUSTIFIED IN ACCEPTING PLEA WITHOUT ASSESSEE'S ESTABLISHING THAT CASH CREDIT CAME OUT OF LAST YEAR'S FUND OF CONCEALED INCOME - HELD, NO Facts While computing the income of the assessee, the ITO held an investment of Rs. 61,950 to be unexplained and a cash credit of Rs. 16,000 in the name of certain creditors to be a camouflage, and added these amounts to the assessee's income. The AAC reduced the unexplained investment to Rs. 19,950 and confirmed the ITO's order qua the cash credit. Before the Tribunal, the assessee's contention was that the unexplained investment and cash credit were fully covered by the intangible additions made in the assessment of the immediately preceding year. Though the Tribunal agreed with the findings of the AAC, yet it held the impugned amounts to be covered by the intangible additions and allowed the assessee's appeal. On reference under section 256(2): Held The intangible additions made in the preceding years would no doubt constitute a fund from which the assessee may draw subsequently to meet his financial needs. But the mere availability of such a fund would not help an assessee to presume that the said fund was always available to cover the unexplained income of the succeeding years. It is for the assessee to establish that he has not earned any secret profits during the relevant year and that the investments and also the credits found in the accounts in the name of certain persons flew from the intangible additions made in the preceding year. The assessee has to establish that as a matter of fact, he drew amounts from the fund for investment in a subsequent year. Also, there was the question whether the assessee could be permitted to raise an alternative contention which was inconsistent with or contradictory to his earlier contention. In the absence of any inquiry in these respects by the Tribunal, the case was remanded to the Tribunal for disposal in…

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