Section 68

The dispute is regarding addition of Rs.14,60,052/- made by AO on account of unsecured loans from Shri Balwantbhai Grewal. There is no dispute that the said amount had been shown as loan in books of account of the assessee. Assessee could not produce any evidence to prove the identity and creditworthiness of Shri Balwantbhai Grewal who lived in UK and genuineness of transaction. Subsequently before CIT(A), assessee submitted that the amount had been wrongly entered in bo.. Full Article

In order to curb the practice of laundering of unaccounted money by taking advantage of basic exemption limit, it is proposed to tax the unexplained credits, money, investment, expenditure, etc., which has been deemed as income under section 68, section 69, section 69A, section 69B, section 69C or section 69D, at the rate of 30% (plus surcharge and cess as applicable). It is also proposed to provide that no deduction in respect of any expenditure or allowance shall be al.. Full Article

It is, proposed to amend section 68 of the Act to provide that the nature and source of any sum credited, as share capital, share premium etc., in the books of a closely held company shall be treated as explained only if the source of funds is also explained by the assessee company in the hands of the resident shareholder. However, even in the case of closely held companies, it is proposed that this additional onus of satisfactorily explaining the source in the hands of .. Full Article

The issue for consideration before is whether the gift received by the assessee is genuine or not? As per the AO, gift of such a substantial amount was not justified to a nonrelative/ no blood relation and the creditworthiness of the donor is not adequate. The CIT(A) held that, in fact, the Assessing Officer has in his remand report clearly stated that “The donor has confirmed in his statement the fact of giving gift to the appellant during the year under consideration.. Full Article

Indisputably, the documents placed at sl. no. 3 on page no.15-20 of the paper book viz. affidavit of Ms. Anjana Vohra, her confirmation and PAN details were never considered by the AO, having been submitted before the AO after the conclusion of hearing on 23.12.2009. There is no sl. no.4 in the paper book; admittedly sl. nos. in the paper book having been wrongly numbered. Though the ld. CIT(A) referred to the relevant submissions of the assessee in the impugned order an.. Full Article

Hon’ble Supreme Court’s decision in the case of CIT Vs. Lovely Exports [216 CTR 195] wherein their Lordships observed Can the amount of share money be regarded as undisclosed income under Sec. 68 of I.T. Act, 1961? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen.. Full Article

There may be some cases under Income Tax Assessment proceedings where there are a large number of unexplained credit and debit enteries of a person standing in books of account of an assessee. In such case the AO may tend to add all the aggregate enteries as unexplained income. However, in such case if the assessee does not have any explanation for every credit or debit entry of a person, standing in his books of account then one of the most commonest defences which an .. Full Article

ITO Vs. Nasir Khan J. Mahadik (ITAT Mumbai)-Mumbai ITAT has in the following case deleted the additions made on account of opening balances of unsecured loans and the notional interest on such loans. The Tribunal held that only fresh loans or additions to the loans during the year in question can be considered for the purpose of addition. Previous years loans cannot be added to subsequent year's income by claiming them to be unexplained. Full Article