TaxTMI Login
AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Just a moment...
AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether unexplained cash credits assessed under section 68 of the Income-tax Act, 1961 could be treated as business income for the purpose of allowing deduction under section 80-IB of the Income-tax Act, 1961.
Analysis: The addition was made because the assessee failed to establish the identity, capacity, genuineness and creditworthiness of the creditors, and the receipts were not shown by the assessee as business income in its accounts. The distinction drawn by the assessee from decisions dealing with trading receipts was rejected on facts, as those authorities applied where the receipts had a direct nexus with business activity or were supported by confirmations. The Tribunal relied on the scheme of sections 14, 68, 69, 69A and allied provisions to hold that a deemed addition for unexplained cash credits does not acquire the character of income from business merely because the assessee carries on business. Such an addition is not income from a known source and cannot be reclassified as business income to obtain deduction under section 80-IB.
Conclusion: The addition under section 68 could not be treated as business income, and the assessee was not entitled to the deduction claimed on that basis.
Ratio Decidendi: Unexplained cash credits assessed as deemed income under section 68 retain their character as unexplained income and cannot be converted into business income or any other head of income merely because the assessee is engaged in business.
TaxTMI 
