Section 68
Querist :
Anonymous
(Querist) 15 January 2011
This query is : Resolved
ere partners of a firm. Y is now deceased. During search procedure few dairy’s maintained by Y was found by I.T. Dept. These dairies contained transactions that were of nature of loans raised by Y. on every page of dairy name of creditor is mentioned and below that his credit amount is mentioned further thereafter under his credit amount regular other interest credit entry are also recorded. This dairy contains both transactions i.e. amount received by cheque and cash from person K, cheque transactions reflects in books of account maintained by Y or firm of XY produced before IT. But the cash transactions were not incorporated in regular books of accounts filled before IT. Now can section 68 even though sease material describes the transactions specifically as loans, be invoked? if the dairy transactions are out of books can 68 be invoked
soumitra basu
(Expert) 20 April 2011
You have to explain each and every transaction mentioned in diary. For cheque transanction no problem. In my opinion you should get xerox copy of the diary from the department and try to make the entry in the cash book of the firm. YOu may also try whether the same can be disclosed in the hand of Y. Otherwise every amount should be treated as undisclosed income in the hands of the firm.
