Bombay High Court’s Judgement on Section 68 of the Income Tax Act: CIT vs Sadiq Sheikh

COURT: Bombay High Court (Goa Bench)

CORAM: Dama Seshadri Naidu J, M. S. Sonak J


GENRE: Domestic Tax

COUNSEL: Nikhil Pai, S. S. Kantak, Susan Linhares

DATE: October 14, 2020 (Date of pronouncement)

DATE: October 31, 2020 (Date of publication)

AY: 2006-07


Section 68- Bogus Cash Credits: The Revenue can examine the source of the source. Merely pointing out to a source and the source admitting that it has made the payments is not sufficient to discharge the burden placed on the assessees by s. 68. Otherwise, it would be sufficient for assessees to simply persuade some credit-less person to own up having made such huge payments and thereby evade payment of tax on the specious plea that the Revenue can always recover the tax from such credit-less source. The explanation has to be plausible and backed by reliable evidence. ‘Fantastic or unacceptable’ explanations are not acceptable (All imp verdicts on s. 68 referred).

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