Credit Without Clear Origin? Tax Authorities Can Treat Unexplained Cash Entries as Taxable Income Under Section 68
The statutory provision addresses cash credits in an assessee's books of accounts. If a sum is credited without satisfactory explanation about its nature and source, the Assessing Officer can charge it as taxable income. For loans, borrowings, or share-related credits, the person recording the credit must also provide a satisfactory explanation. Special provisions apply for non-publicly traded companies, requiring explanations from resident credit holders. Exceptions exist for venture capital funds and companies.
Full Summary is availble for active users!
Note: It is a system-generated summary and is for quick
reference only.