CA Agarwal Sanjay ‘Voice of CA’, CA Sidharth Jain
Section 68 of the Act – substantive provisions (post amendment by Finance Act 2012)
“Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year.”
Provided that where the assessee is a company, (not being a company in which the public are substantially interested) and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless—
(a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and
(b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:
Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.
Section 68 of the Act – Features
o Any sum
o found credited in the books of an assessee maintained for any previous year
o assessee offers no explanation
o nature and source
o OR the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory,
o may be charged to income-tax
o as the income of the assessee of that previous year.
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