1985 (8) TMI 33 - HC - Income Tax

Summary

Issues:
1. Whether the Revenue can dispute the genuineness of cash credits in the books of account under the voluntary disclosure scheme?
2. Whether the assessee has discharged the burden of proof under section 68 of the Income-tax Act, 1961, regarding the source of deposits?

Analysis:

Issue 1:
The case involved cash credits of Rs. 90,000 in the names of three minors disclosed under the voluntary disclosure scheme. The Income-tax Officer treated this amount as concealed income from undisclosed sources. The Appellate Assistant Commissioner ruled in favor of the assessee, stating that the assessee had fulfilled its obligation by showing that the credits were from the disclosed amount. The Tribunal upheld this decision, citing a similar case from the Delhi High Court. The High Court held that the Revenue could dispute the genuineness of the cash credits despite the voluntary disclosure. The court referred to various judgments, including a Supreme Court decision, emphasizing that the assessee must prove the source of income. The court ruled in favor of the Revenue on this issue.

Issue 2:
Regarding the burden of proof under section 68 of the Income-tax Act, the court noted that the assessee had credited Rs. 90,000 in the names of minors but failed to provide a satisfactory explanation for the source of these deposits. The only explanation given was the acceptance under the disclosure scheme, which was deemed insufficient. The court emphasized that the assessee must demonstrate the source of income for the minors. As no evidence was presented, the court concluded that the assessee had not discharged the burden of proof. The court disagreed with the Tribunal's decision and ruled in favor of the Revenue on this issue as well.

The court addressed an argument raised by the assessee regarding the discharge of the burden based on previous orders. However, the court clarified that the matter should be taken to the Tribunal for a fresh assessment based on the court's answers to the questions posed. The court concluded by stating that both questions were answered in favor of the Revenue, and costs were not imposed on the assessee due to the evolving legal judgments during the case proceedings.