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TMI Blog2024 (5) TMI 1503X X X X Extracts X X X X X X X X Extracts X X X X ..... on the next day would not result in the income of the previous year being reduced. If we allow such entries, one cannot lose sight that the assessees may make fictitious entries and return the same on the next day for taking tax benefits. There may be cases where the entries in the books of accounts may not be reflected in the bank account as the entries may be made in cash or in cheque which may not be ultimately encashed. We, therefore, answer question no. 1 in favour of the revenue. Income tax is on real income ascertained as per the provisions of the Act and not on hypothetical income - It is now trite law that the income to be assessed and ascertained under the provisions of the Act is the accrued income and not the actual income which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e? (ii) Whether income tax is on real income ascertained as per the provisions of the Act and not on hypothetical income? 3. Learned counsel for the appellant submits that in terms of Section 68 of the Income Tax Act, the said entries cannot be said to be the income for the previous year as it was wrongfully entered and reversed immediately on the next day. He further submits that one of the Directors had issued cheque for Rs.1,80,000,00/-, which was returned back on the next day. 4. Section 68 of the Act provides as under:- Cash credits. 68. 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 mature and source thereof or the explanation offered by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l company as referred to in clause (23FB) of section 10.] 5. In view of the above, it is apparent that there is no question of mens rea involved to be examined by invoking the aforesaid provision. We cannot lose sight of the fact that once amount is credited in the books of accounts and the same returned on the next day, realising that too only on 31st March i.e. last day of the assessment year, would be including of the said amount as part of the income of that year. Returning back the same on the next day would not result in the income of the previous year being reduced. If we allow such entries, one cannot lose sight that the assessees may make fictitious entries and return the same on the next day for taking tax benefits. There may be c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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