Clause 102 - Unexplained credits.

Unexplained credits: sums credited without a satisfactory source explanation may be taxed as the assessee's income.

Sums credited in an assessee's books without explanation, or with explanations deemed unsatisfactory by the Assessing Officer, shall be taxed as the assessee's income for that year. Where credits are described as loans or similar amounts, the explanation is deemed unsatisfactory unless the resident in whose name the credit stands also explains the source and that explanation is found satisfactory. The same rule applies to closely held companies for credits recorded as share application money, share capital, or share premium, subject to an exception for venture capital funds or companies.