COMMISSIONER OF INCOME TAX Vs. NEVENDRAM AHUJA

JUDGEMENT

(1.) THIS reference is made by the Tribunal. Jabalpur Bench, by Statement of Case dt. 5th May, 1999 (in RA No. 107, 105 and 111/jab/1998) in respect of its common order dt. 28th May, 1998 in ITA Nos. 282/jab/1994, 263/jab/1994 and 376/jab/1995 regarding the asst. yrs. 1989-90, 1990-91 and 1991-92. The four questions of law referred are : Common questions for all three years

(2.) SECTION 68 of the IT Act, 1961 ('act' for short) provides that where any sum is found credited in the books of an assessee, for which the assessee offers no explanation about the nature and source, or the explanation offered is not satisfactory in the opinion of the AO, the amount so credited may be charged to income-tax as income of the assessee.

(3.) THE Revenue contends that whenever an assessee claims that he has received any sum from a third party as a loan or advance or deposit and such sum is credited in the books of the assessee, the onus lies on the assessee to establish (a) the identify of the party; (b) the capacity of such party to advance or deposit the money; and (c) the genuineness of the transaction. It is submitted that where the assessee fails to prove satisfactorily the source of the depositor, the nature of receipt and genuineness of the receipt of the deposit, the AO is entitled to draw an inference that the amount in question is the undisclosed income of the assessee. It is however not disputed that once those three conditions are established by the assessee, the onus would shift to the Department if it still wants to treat the amount as undisclosed income of the assessee.