*Deemed Incomes Under The Income Tax Act*
This article discussed deemed income under sections 68, 69, 69A, 69B, 69C and 69D. This includes Tax Treatment of Cash Credit, Unexplained investments, Unexplained money, Amount of investments not fully disclosed in books of account, Unexplained expenditure and Amount borrowed or repaid on hundi in cash.
(i) *Cash Credits [Section 68]*
Where any sum is found credited in the books of an assessee maintained for any previous year and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. Such cash credits may be assessed either as business profits or an income from other sources. In the case of the business community, it is usually considered as business profit. It will be taxed in the year in which such cash credits are detected.
If the assessee fails to submit any satisfactory explanation or the A.O. is unsatisfied with the explanation, the income is treated as the assessee's income from undisclosed sources.
(ii) *Unexplained Investments [Section* 69]
In the financial year immediately preceding the assessment year, the assessee has made investments that are not recorded in the books of accounts, and the assessee fails to furnish any. Satisfactory explanation as from where this money came or if the Assessing Officer is not satisfied with the explanation the assessee has furnished the value of such unexplained investment may be deemed to be the assessee's income of such financial year.
(iii) *Unexplained Money etc* . [Section 69A]
In any financial year, the assessee is found to be the owner of any money, bullion. Any jewellery or other valuable articles and all these valuable articles, money, bullion, jewellery etc. are not recorded in the books of accounts of the assessee, the assessee either does not furnish any explanation as to how he acquired these things or his explanation if furnished, is not up to the satisfaction of the Assessing Officer, the money. The value of the bullion, jewellery, or other valuable articles may be deemed the assessee's income for such financial year.
(iv) *Account of Investment, etc., not fully disclosed in Books of Accounts* [Sec. 69B]
In case the assessee acquired certain investments, jewellery, valuable article etc. and the actual money spent on these items is more than what is shown or recorded in his books of accounts and the assessee either does not furnish any explanation for this or with his explanation the Assessing Officer is not satisfied, the excess amount under section 69B may be deemed to the income of the assessee for such financial year.
(v) *Unexplained Expenditure [Section 69C]*
Where in any financial year an assessee has incurred any expenditure, and he does not explain the source of such expenditure or part thereof or the explanation offered by him is not satisfactory according to the opinion of A.O., the amount covered by such expenditure or part thereof, as the case may be, is deemed to be the income of the assessee for such financial year. The amount of unexplained expenditure deemed as income of the assessee shall not be allowed to be deducted under any head of income.
(vi) *Payment of Hundi Money in Cash* [Section 69D]
Any amount borrowed on 'hundi' or 'repaid on hundi' otherwise than in account payee cheque drawn upon a bank shall be deemed the income of the person borrowing or repaying the amount for the previous year in which such amount was borrowed or repaid. If the amount borrowed is taxed as deemed income under the provisions of 69D, it will not be taxed again when the amount is repaid. The amount repaid shall include the amount of interest also.
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