2010 (12) TMI 2 - SUPREME COURT

Cash Credit - Cash Receipts - amount received by proprietor after discoloration of firm - receipt from old debtors - When the assessing officer sent letters to the six parties, whose addresses had been supplied, three did not respond, while two others denied any relationship with the firm, and remaining one letter was returned by the post office with remarks "not known." Similarly, when letters were sent to parties who had filed confirmations, three of those letters were returned by the post office marked "not known.", and another one as "no claims." One of the parties denied any relationship with the firm - The additions made by the AO confirmed by the ITAT - HC rejected the appeal by assessee - Held that: - High Court has correctly concluded that no substantial question of law arises from the order of the Tribunal. All the authorities below, in particular the Tribunal, have observed in unison that the assessee did not produce any evidence to rebut the presumption drawn against him under Section 68 of the Act, by producing the parties in whose name the amounts in question had been credited by the assessee in his books of account

It is well settled that in view of Section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year, the same may be charged to income tax as the income of the assessee of that previous year, if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the assessing officer, not satisfactory - (See: Sumati Dayal vs. Commissioner of Income Tax, Bangalore (1995 -TMI - 5469 - SUPREME Court) and Commissioner of Income Tax vs. P. Mohanakala (2007 -TMI - 6558 - SUPREME Court)