Case Law Details
Shri Ashish Bansal has in the end submitted, the assessee could not have been asked to explain the source of the source i.e. the assessee could not have been saddled with liability if the minors who advanced the money to the assessee could not explain the source of their receipts. We are not impressed by this submission either. We cannot loose sight of the fact that the minors in question were children of the partners in the firm and therefore, it had to be the partners who would have both arranged the gifts and also made the decisions to introduce money into the firm in name of the minors. It was therefore for them to have established the genuineness of the transaction as otherwise, in such circumstances, it would be to allow assessee’s to place the minors in between themselves and the firm to escape the consequences in law by citing the rule – revenue cannot look into the source of the source.
Full Text of High Court Judgment
This income tax appeal under Section 260A of the Income Tax Act, 1961 has been filed by the assessee against the order of Income Tax Appellate Tribunal dated 11.05.2007 in respect of penalty proceedings under Section 271 (1) (c) of the Income Tax Act, 1961 (herein after referred to as the ‘Act’) for the Assessment Year 1990-91.
Brief facts of the case are that in the course of regular assessment proceedings for the assessment year 1990-91, the Assessing Officer made additions of Rs. 2,39,000/- being cash credit entries found standing in the the assessee’s books in the names of minor sons of the partners of the assessee firm. These were disbelieved to the extent the said minors were held to be in receipt of bogus gifts from complete strangers. Also, the Assessing Officer made addition on account of another cash credit appearing in the books of account of the assessee by way of loan of Rs. 50,000/- from one Sri Vikash Kumar Poddar.
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