SECTION 68: CASH CREDIT

Where any sum is found credited in the books of the assessee and the assessee offers no explanation about the nature and source or the explanation offered is not satisfactory in the opinion of the Assessing Officer, the sum so credited may be treated as the income of the assessee of the Previous Year.

However, where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by the assessee shall not be deemed to be satisfactory, if, the person in whose name such credit is recorded also offers no explanation about the nature and source or explanation not satisfactory.

Further, any explanation offered by a closely held company in respect of any sum credited as share application money, share capital, share premium or any such amount, in the a/c’s of such company shall be deemed to be not satisfactory, if, the resident person, in whose name such credit is recorded in the books of such company also not explains about the nature and source of sum or explanation is not satisfactory.

These additional conditions would not apply if the person, in whose name the sum is recorded, is a venture capital fund or venture capital company registered with SEBI.

NOTE: Income mentioned as above u/s 68 will be taxable @ 60% (+25% Surcharge + 4% HEC i.e. 78%).

SECTION 69: UNEXPLAINED INVESTMENT

Where in the Previous Year, the assessee has made investments which are not recorded in the Books of Accounts and the asseesee offers no explanation about the nature and the source of investments or explanation is not satisfactory in the opinion of the Assessing Officer, the value of the investments are taxed as deemed income of the assessee of that Previous Year.

NOTE: Income mentioned as above u/s 69 will be taxable @ 60% (+25% Surcharge + 4% HEC i.e. 78%).

SECTION 69A: UNEXPLAINED MONEY, ASSETS ETC.

Where in any Previous Year, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and the same is not recorded in the Books of Accounts and the assessee offers no explanation about the nature and source of acquisition of such money, bullion, jewellery etc. or the explanation is not satisfactory in the opinion of the Assessing Officer, the money and the value of bullion, Jewellery etc. may be deemed to be the income of the assessee of that Previous Year.

NOTE: Income mentioned as above u/s 69A will be taxable @ 60% (+25% Surcharge + 4% HEC i.e. 78%).

SECTION 69B: AMOUNT OF INVESTMENT, OTHER ASSETS ETC. NOT FULLY DISCLOSED IN THE BOOKS OF ACCOUNTS

Where in any Previous Year, the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable articles and the Assessing Officer finds that the amount spent on making such investments or in acquiring such articles exceeds the amount recorded in the Books of Accounts by the assessee and he offers no explanation for the differences or the explanation is unsatisfactory in the opinion of the Assessing Officer, such excess may be deemed income of the assessee of that Previous Year.

NOTE: Income mentioned as above u/s 69B will be taxable @ 60% (+25% Surcharge + 4% HEC i.e. 78%).

Example: Suppose a taxpayer purchases a property worth Rs. 50 lakhs, but only shows an investment of Rs. 20 lakhs in the books of accounts. In such a case, the remaining Rs. 30 lakhs could be treated as deemed income under Section 69 of the income tax act if the assessee is not able to explain the source of income for remaining Rs. 30 lakhs or the Assessing Officer founds the explanation not satisfactory.

SECTION 69C: UNEXPLAINED EXPENDITURE

Where in any Previous Year, an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or the explanation is unsatisfactory in the opinion of the Assessing Officer, then the Assessing Officer can treat such expenditure as the income of the assessee for such Previous Year. Such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as deduction under any head of income.

NOTE: Income mentioned as above u/s 69C will be taxable @ 60% (+25% Surcharge + 4% HEC i.e. 78%).

SECTION 69D: AMOUNT BORROWED OR REPAID ON HUNDI

Where any amount is borrowed on a hundi or any amount due thereon including interest on such loan is repaid other than through an account payee cheque drawn on a bank, the amount so borrowed or repaid shall be deemed to be the income of the person borrowing or repaying for that Previous Year in which the amount was borrowed or repaid, as the case may be.

However, where any amount borrowed on a hundi has been deemed to be the income of any person, he will not be again liable to be assessed in respect of such amount on repayment of such amount. The amount repaid shall also include interest paid on the amount borrowed.

NOTE: If amount is borrowed or repaid through other financial institutions then this section cannot be invoked.