sir,
assessee has made cash deposit in his saving bank account stating that cash was generated through business run by one of the family member. As the cash handling charges in the current account of business is too high and to avoid such charges, assessee is depositing cash generated from business entity into his saving bank account. Assessee has also submitted that the funds were transferred to current account of the business entity within a span of 1 or 2 days. AO has made addition U/sec. 68 on the ground that the amount is unexplained cash credit and to be added U/sec. 68, even though assessee has given complete details/documents of the persons from whom cash is received. Whether addition u/s 68 is justifiable ?
The addition made by the AO under Section 68 is prima facie justifiable if the assessee cannot conclusively tie the savings account cash deposits to verified business turnover and customer creditworthiness. However, if the assessee can conclusively prove with books, bills, and customer documentation that the deposits represent genuine business sales receipts that were subsequently routed into the business entity and offered to tax, the addition is legally contestable and can be successfully challenged before appellate authorities.