Unexplained cash credit under section 68 fails when customer details and supporting records are filed without meaningful verification.

An addition as unexplained cash credit under section 68 could not be sustained where the assessee furnished complete customer-wise particulars, supporting invoices, bank records and cash book entries showing advances from customers, and the Assessing Officer made no meaningful independent verification. The assessee thereby discharged the initial onus by establishing identity and source of the receipts; in the absence of basic enquiry such as notices under section 133(6) or sample customer verification, the Revenue could not treat the receipts as unexplained. The addition was deleted.

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Issues: Whether the addition made as unexplained cash credit under section 68 of the Income-tax Act, 1961 was sustainable when the assessee furnished the names, addresses, contact details and supporting records of the customers and the Assessing Officer made no independent verification.

Analysis: The assessee produced customer-wise particulars, sample invoices, bank records, cash book and other supporting documents showing receipt of advances from 611 customers. The Assessing Officer rejected the claim mainly on the ground that such collections on a single day during the demonetisation period appeared improbable, but did not carry out basic verification, including issuing notices under section 133(6) of the Income-tax Act, 1961 or making sample inquiries from the customers or other relevant authorities. On these facts, the assessee was held to have discharged the initial onus placed upon it, and the addition could not be sustained without proper enquiry by the Revenue.

Conclusion: The addition under section 68 of the Income-tax Act, 1961 was deleted and the issue was decided in favour of the assessee.

Ratio Decidendi: Where the assessee furnishes complete particulars and supporting material establishing the identity and source of cash receipts, an addition under section 68 of the Income-tax Act, 1961 cannot be sustained in the absence of meaningful verification by the Assessing Officer.

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