Law:

Section:

Section 68 of the Income-tax Act, 1961 - Cash credit - Assessability of - Whether it can be said that mere filing of voluntary disclosure automatically absolve assessee from discharging obligation that is otherwise cast on him to point out by some evidence a nexus between voluntary disclosure and matter under enquiry before assessing authorities - Held no Facts The assessee-company filed its return for the relevant assessment year. On scrutiny of the accounts it was found by authorities that the assessee had an account in its books for one S which contained a number of transactions and at the end of the accounting year, the account showed a credit balance of Rs. 1,51,235.94. However, in the account books of S the corresponding debit balance was only Rs. 49,552.44. The explanation offered by the assessee was that the assessee had sold certain stocks on suspense account and from out of the sale proceeds of such stocks made payments to the aforesaid S without recording the same in the books of account. The assessee, however, accepted that there was no information regarding the persons to whom the goods were sold on suspense account, the amounts realised on such sales and the utilisation of such sale proceeds for the purpose of discharging the debts due. It was further found that there was a suspense account to which credits were made from time to time, as and when the assessee fell short of cash. The sum total of the credits appearing in the suspense account was Rs. 1,02,000. The assessee tried to connect the credits in the suspense account with the sale proceeds of the goods. At the same time, there was no information forthcoming as to the persons who paid the cash found credited in the suspense account while the accounts were under scrutiny and the assessment proceedings were pending, the Voluntary Disclosure of Income and Wealth Ordinance, 1975, was promulgated. The assessee had apparently taken advantage of the aforesaid Ordinance and filed a declaration before the Commissioner for the relevant assessment year. In the voluntary disclosure the assessee declared unaccounted income of Rs. 7,000 being the difference between Rs. 1,02,000 representing the sale…

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