Where an assessee had made investments but failed to record them in books of accounts if any maintained by him for any source of income, the value of such investments is deemed to be his income provided
- The assessee offers no explanations about the nature and source of investments.
- The explanation offered by him is not found satisfactory by the assessing officer.
Financial year in which the investment is made may be taken as the previous year [Ram Swarup vs. CIT 192 ITR 537].
Where the assessee gives a credible explanation that is found to be satisfactory, no addition can be made to his income [CIT vs. Nitin 248 ITR 478]
Explanation should not be called for belatedly: - the length after which an assessee is called upon to explain a transaction is relevant factor while considering the sufficiency of the evidence. After the lapse of a decade an assessee should not be placed upon the rack and called upon to explain not nearly the origin and source of capital contribution but also the origin and source of that source as well.[S.Hastimal vs. CIT (1963) 49 ITR 273]; Upasana vs. CIT 229 ITR 220.
Discrepancies in stores may be treated as undisclosed income:- if there are differences between the value of stocks declared hypothecated to the bank and the value recorded in assessee’s books and the assessee failed to explain the differences, no exception could be taken to the addition made by the authorities[Century foam p ltd Vs. CIT (1994) 210 ITR 625].
Where books of accounts reveals sales but there is no corresponding material to show that the assessee could purchase the commodity for the purposes of offering for sales the situation is an invitation to assessee to explain as to how and from what source he held the amount of the commodity with regards to its purchase before it was offered for sale. In absence of an explanation the deeming provision of section 69 is applicable [CIT vs. Anandarajan (1997) 228 ITR 664]
Secrete dealings are covered:- where the sales were conducted by the assessee secretly and were not entered in his books of accounts and the relevant dealings involved assessments, additions could be made by invoking section 69[Himmatram Laxminarain Vs. CIT(1986) 161 ITR 7]
Tags-section 69 of income tax act,section 69,section 69 of it act,section 69 of income tax,unexplained investment it act,it act in unexplained investment.