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Home Acts & Rules Bill Bills FINANCE BILL, 2012 Chapters List Chapter III - Part 1 Direct Taxes - Income Tax This

Clause 22 - Amendment of section 68. - FINANCE BILL, 2012

FINANCE BILL, 2012
Chapter III - Part 1
Direct Taxes - Income Tax
  • Contents

Amendment of section 68.

     22. In section 68 of the Income-tax Act, the following provisos shall be inserted with effect from the 1st day of April, 2013, namely:—

           “Provided that where the assessee is a company, (not being a company in which the public are substantially interested) and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless—

                (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and

                (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:

          Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.”.

 



 

Notes on Clauses:

Clause 22 of the Bill seeks to amend section 68 of the Income-tax Act relating to cash credits.

The existing provisions of the aforesaid section 68 provide that where any sum is found credited in the books of an assesse maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year.

It is proposed to insert two new provisos to the aforesaid section.

The first proviso seeks to provide that where the assessee is a company, (not being a company in which the public are substantially interested) and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assesse company shall be deemed to be not satisfactory, unless-

(a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and

(b) such explanation in the opinion of Assessing Officer aforesaid has been found to be satisfactory.

The second proviso seeks to provide that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.

This amendment will take effect from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013-2014 and subsequent assessment years.

 
 
 
 

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