Related under section 68/69

This query is : Resolved

nitesh (Querist)
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07 September 2009 Hello Experts

Facts of case
one person has only rental income file return every year on regular basis Pay tax on Net Appox. Rs 3,50,000/- income

The assessee'wife is partner in partnership firm.she withdraw cash amount Rs 21,50,000/- from her partnership bank account for purchases of land in jaammu.
But she has not obtain the land due to some reasons and same returned (21,50,000/-) amount is deposit in her husband bank account by mistake.

The assessing officer made addition rs 21,50,000/- under section 68 on basis of bank pass book.

my query :-
1. tell me about section 68 is applicable on tranction made by husband & wife.
2. i think Section 68 is applicable on those person who maintain the books. tell me about "BOOKS MEANING" also. kind ur information assessee has only rental income.

Please give me any case reference also.

Thanks in advance.....

CP Ram

CP Ram (Expert)
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07 September 2009 1) Section 68 is not applicable in your case:

As per section 68 of the Income Tax Act, 1961, 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 nature and source thereof, or, the explanation offered is not satisfactory in the opinion of the AO, the sum so credited may be charged as income of the assessee for that previous year.

From the above it is clear that if the assessee does not offer satisfactory explanation, only then section 68 can be invoked by the AO.

The above provisions can be summed up as under:
The burden of proof is on the assesee u/s 68. In this regard he shall establish that -

a) the identity of the creditor is established;
b) the capacity of the creditor to advance the money is beyond doubt; and
c) the transaction is genuine.

If the above is satisfactorily explained to the AO, then, the credit amount cannot be charged as income u/s 68.

2) Books includes Bank Pass Books...and it is assumed that the assessee maintains this book.