TaxTMI 
TaxTMI 
2018 (3) TMI 1401
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....14. 2. The instant appeal concerns an addition of Rs. 9 lacs brought to tax u/s. 68 of the Act. The assessee, a Government contractor, observed during the course of assessment proceedings to have received Rs. 9 lacs by bank transfer on 14.05.2012 from one, Zaitoon Begum, was asked to explain the same. The assessee furnished a ledger account which did not exhibit the said receipt, further explaining Zaitoon Begum to be his wife, who had worked as 'mate' for a short spell in Doda Area - the ledger account reflecting a credit of Rs. 2.15 lacs to her account by way of labour charges, and which was paid by the assessee during the year. The assessee, admittedly in receipt of Rs. 9 lacs from the said person, had not credited the said sum in his b....
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....he has not. The controversy raised however is without any substance in law, as the impugned sum stands admittedly received by the assessee, duly credited to his bank account, so that even if not credited in his books of account - which in fact he has shown to, the assessee is yet obliged u/s. 69/69A to furnish a satisfactory explanation as to the nature and the source of deposit in his bank account. Reference in this context may be made to the decision in CIT v. Jauharimal Goel [2005] 147 Taxman 448 (All). On balance, section 68 is clearly applicable in the facts and circumstances of the case. The next question is if the assessee has discharged the burden of proof cast on him u/s. 68. The nature and source of a credit, as is well-settled, ....
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....cial capacity (to the required extent). It also does not show as to when the relevant income was available to the creditor in-as-much as the funds under reference were advanced to the assessee in mid May, 2012, i.e., barely 1½ months into the year, whereat presumably only a fraction of the total income for the year (f.y. 2012-13) would have materialized. The creditor had, at the time of the impugned credit, in fact already extended Rs. 3.95 lacs to the assessee during the relevant year itself. Though it is only the credit of Rs. 9 lacs that is under examination, the creditors' - who is also maintaining books of account, capacity has to be shown with reference to the entire sum. A credit may not necessarily arise from the creditors' c....
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....en to show so (otherwise) is on the person who so claims/ alleges. As explained by the Apex Court time and again, it is on account of the credit appearing in the assessee's books of account, so that he is the beneficiary of the sum credited, that the law deems it to be the assessee's income unless he satisfactorily explains the same (credit) as to its nature and source. Reference in this context may also be made to the decision in CIT v. S. Kamaraja Pandian [1984] 150 ITR 703 (Mad), wherein it stands explained that in spite of the entries to that effect in his accounts, an assessee, in view of section 68, will have to establish the identity of the creditor; the capacity of the creditor to advance; and the genuineness of the transaction/s, a....