1976 (10) TMI 32 - HC - Income Tax

Summary

Issues involved: Determination of cash credit as income of the assessee u/s 68 of the Income-tax Act, 1961.

Summary:
The High Court of Punjab and Haryana, in a case concerning a cash credit of Rs. 10,000 in the name of Shri Narinder Kumar, upheld the Income-tax Officer's decision that the credit was not acceptable due to insufficient means of Narinder Kumar to advance that amount. The Appellate Assistant Commissioner agreed with this assessment but allowed relief of Rs. 3,000, considering it as income from agricultural land. Upon further appeal to the Tribunal, the finding on Narinder Kumar's capacity was affirmed, and additional relief of Rs. 3,000 was granted to the assessee. Ultimately, a sum of Rs. 4,000 was added to the assessee's income. The assessee sought to require the Tribunal to state a case under section 256(2) of the Income-tax Act, arguing the need for more evidence to establish the amount as income. However, the court, citing section 68 of the Act, held that if an assessee fails to provide a satisfactory explanation for a credited sum, it may be charged to income-tax as the assessee's income. Therefore, the application was rejected with no costs incurred.