2001 (3) TMI 9 - HC - Income Tax

Unexplained cash credits - discrepancies in the explanations provided by the creditors regarding the sources of their deposits - as decided by ITAT 2000 (9) TMI 204 - ITAT AHMEDABAD-B phraseology of s. 68 is clear. The legislature has laid down that in the absence of a satisfactory explanation the unexplained cash credit may be charged to income-tax as the income of the assessee of that previous year . In this case the legislative mandate is not in terms of the words shall be charged to income-tax as the income of the assessee of that previous year . unsatisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as the income of the assessee as held in the case of CIT vs. Smt. P.K. Noorjehan 1997 (1) TMI 6 - SUPREME COURT AO has not disallowed the interest claimed/paid in relation to these credits in the assessment year under consideration or even in the subsequent years and TDS has been deducted out of the interest paid/credited to the creditors we are of the opinion that the Departmental authorities were not justified in making the addition of which is directed to be deleted. Assessee appeal allowed. HELD THAT - Considering the facts and circumstances of the case narrated by the Tribunal in para 7 of the judgement and the law explained in paras 8 and 8.1 we find no substance in the appeal. The appeal is therefore dismissed as no substantial question of law arises.

Summary

The Gujarat High Court, through Justices B.C. Patel and D.A. Mehta, dismissed the appeal, finding "no substance in the appeal" and holding that "no substantial question of law arises," as per the Tribunal's findings in paras 7, 8, and 8.1 of its judgment.