Landmark Cases on Cash Credits and Unexplained Money
558 decisions, ranked by how many judgments on BharatTax rely on them.
An addition under section 69A can be made when purchase transactions are found to be not genuine, even if export transactions are later determined to be genuine. Failure to submit Form No. 10CCAC may disentitle an assessee to deduction under section 80HHC(4).
An addition under section 69A is confirmed when the assessee fails to provide documentary proof for the source of cash deposits, such as from business or trading activities.
Amounts received by an assessee may not always be classified as 'loans' or 'deposits' as commonly understood, especially when they represent a diversion of funds due to business exigencies. The terms 'loan' and 'deposit' are not mutually exclusive and have common features.
Amounts received from group companies are not deemed dividends under Section 2(22)(e) if they are part of current, inter-banking account transactions with both receipts and payments.
If an assessee fails to prove the genuineness of transactions and creditworthiness of donors, the onus cast upon them under section 68 of the Income Tax Act, 1961, is not discharged. When sums are credited in an assessee's books, and no satisfactory explanation is provided for their nature and source, such sums can be charged to income tax as the income of that previous year.
Where an assessee claims to have received sums as gifts but fails to establish that the donor had the means to make the gift and that the gift was genuine and given out of natural love and affection, the amount received as gift is correctly added to the income of the assessee.
An addition under section 69B of the Act for purchases made out of undisclosed income is unjustified if the assessee demonstrates that the stock statement was inflated to secure higher credit facilities and the bank did not conduct physical verification of the stock.
Once 'on money' is treated as revenue receipt and added to income, any expenditure incurred out of such 'on money' cannot be treated as unexplained expenditure as doing so would amount to double addition.
