S.69A : Onus of proving source of deposit primarily rests on

Last updated: 26 January 2008

Court :
SC

Brief :
Where a deposit stands in the name of a third person and where that person is related to the assessee, in such a case the proper course would be to call upon the person in whose books the deposit appears or the person in whose name the deposit stands should be called upon to explain such deposit. In the instant case, there was no evidence recording registration of the firm. Books of account were not properly maintained in the instant case. There was no explanation regarding the source of investment. The evidence of ‘K’ indicated that even the partners of the firm were fictitious. In the above circumstances, the Tribunal had erred in directing linking up of the deposits with the accounts of firm. In fact, the directions given by the Tribunal to the Assessing Officer for such linking up were not even capable of compliance. The onus of proving the source of deposit primarily rests on the person in whose name the deposit appears in various banks. In the circumstances, the department was right in making individual assessments in the hands of assessee in question. Similarly, the revenue was right in making the individual assessments in the names of other assessees.

Citation :
Commissioner of Income-tax, Salem v. K. Chinnathamban CIVIL APPEAL NO. 3230 TO 3235 OF 2007 ARISING OUT OF S.L.P.(C) NOS. 11596, 14262, 14263, 15538, 17035 AND 18654 OF 2006 DECIDED ON 24-7- 2007.