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2006 (3) TMI 193 - AT - Income TaxAddition u/s 68 - Cash Credits - balance sheet under the head 'Sundry creditors' - whether provisions of section 68 are attracted to such credits or not? - HELD THAT:- A bare reading of section 68 of the Act shows that the expression used in the section is 'any sum' and it does not say that credit should be only in the nature of cash receipt. The expression 'any sum' is very wide and general in nature. It covers all credits including loan, receipts and any other amount of similar nature. The credits shall also include both loans and trade credits and also other receipts, be that of cash or kind. These maybe in the name of the assessee i.e., capital account or in the name a of third party. In the case of Smt. Shanta Devi v. CIT [1987 (10) TMI 26 - PUNJAB AND HARYANA HIGH COURT] held that section 68 of the Act, refers to credits in the books of the assessee. It was held that where a partner did not maintain any books of account and a cash credit entry appeared in the books of the firm in the name of the partner, section 68 would apply and the amount of the cash credit would be liable to be assessed in the hands of the firm because the entry appeared in the books of account of the firm which was a separate entity from its partner. In the present case also, these credits appeared in the books of account of the assessee. Therefore, these are liable to be considered in the hands of the assessee as per provisions of section 68 of the Act. Thus, it is clear from the facts of the case that even though amount credited to the capital account included gold ornaments i.e., in kinds and partly in cash, the addition of the entire amount was upheld. Thus, from the discussion, it is very clear that the provisions of section 68 are wide enough to cover all credits including credits of the nature found in the books of account of the assessee. The submission of the assessee that provisions of section 68 apply only to cash receipt/loans only is without any merit. Therefore, this submission is rejected.
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