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Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 1986-87 - Assessing Officer found certain cash credit entries in account of assessee - Assessee explained that depositors were income-tax assessees, assessed to tax under amnesty scheme, depositing their money with assessee-firm by way of cheque in order to earn more interest - Assessing Officer rejected assessee's explanation on ground that immunity of declaration under amnesty scheme was only available to declarant and not to assessee and, accordingly made addition - Whether since explanation of assessee had been rejected without appreciating that assessee had not claimed any immunity under amnesty scheme and further Tribunal had also not considered that interest paid to depositors had not been disallowed which proved genuineness of transaction, matter regarding addition towards cash credit required reconsideration - Held, yes FACTS During the assessment proceedings for the assessment year 1986-87, the Assessing Officer found cash credit entries in the account of the assessee-firm and asked the assessee to explain the new cash credit in terms of section 68. The depositors were the wife and minor/major children of the partners of the firm. The assessee filed an explanation that all the depositors were old assessees and all of them got themselves assessed in the amnesty scheme and deposited their respective money in different banks and in order to earn more interest money was advanced by the depositors, to the assessee-firm by way of cheques. The Assessing Officer rejected the assessee's explanation and made the addition of the entire deposits. He held that as immunity had been granted to the creditors under Amnesty scheme and they were not bound to disclose their sources of income, assessee could not take any benefit in its own case and the explanation offered by the assessee regarding the total sum credited in its books of account in the names of wives, 5 minor children and one major child of the partners was not satisfactory as he could not prove their capacity to make the deposits with the assessee-firm towards unexplained income under section 68. On appeal, the Commissioner (Appeals)…

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