Cash credits under section 68 require proof from the assessee, and unexplained receipts justify adverse inference.

Cash credits recorded in an assessee's books will attract addition under section 68 of the Income-tax Act unless satisfactorily explained with supporting material. Where the explanation rests on alleged share sales or repayment of dues, the assessee must produce evidence within its special knowledge, such as sold notes, confirmations, or witness testimony from the broker, buyer, or debtor. Failure to do so leaves the burden undischarged and permits adverse inference under section 114(g) of the Evidence Act, read with section 106 on facts especially within personal knowledge. The addition was therefore sustained and the Tribunal's deletion could not stand.

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Issues: Whether the cash receipts credited in the assessee's books were satisfactorily explained so as to displace the addition under section 68 of the Income-tax Act, 1961.

Analysis: The receipts were found credited in the assessee's books, and the explanation was rejected by the Assessing Officer and the Commissioner (Appeals) for want of supporting evidence. The alleged sale of shares and repayment of dues were matters specially within the assessee's knowledge, and the assessee could have produced the sold note, confirmation, or summoned the broker, buyer, or alleged debtor. Since the assessee did not take those steps, the burden under section 68 was not discharged. The absence of such material also justified an adverse inference under section 114(g) of the Indian Evidence Act, 1872. Section 106 of the Indian Evidence Act, 1872 supported the conclusion that facts especially within the knowledge of a person must be proved by that person.

Conclusion: The addition was rightly sustained, and the Tribunal's deletion of the addition could not stand.

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