CA Abhishek Singh (practice) (2106 Points)
04 June 20111. WHAT IS LAON TAKEN ON HUNDI. WHY IT IS TREATED AS INCOME OF THE RECEIPIENT/PAYER.
2. WHAT IS CASH CREDIT. WHY IT IS CONSIDERED AS INCOME WHEN SATISFACTORY EXPLAINATION IS NOT GIVEN.
I KNOW THAT "CASH CREDIT" REFERRED TO ABOVE IS DIFFERENT FROM CASH CREDIT THAT A BUSINESSMAN AVAILS FROM BANK.
PLEASE CLEAR MY CONCEPT ??
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 04 June 2011
Mr.Abhishek
"Hundi" is "Bill Of Exchange" Please refere Negotiable Instruments Act.
Cash Credits as per section 68 of Income-tax Act, 1961 are the sums found in the books of account of an assessee maintained by him and the assessee fails to offer a satisfactory explanation for the source of such cash credits to the assessing officer those are treated as the income of the assessee.
The other cash credit you mean is the loan obtained by a business man/organisation on the streght of the current assets.
Best Wishes
Sathikonda
CAclubindia
