Section 13 of the Indian Income-tax Act, 1922 — the law in short
What the courts have decided on section 13 of the Indian Income-tax Act, 1922, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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CIT v Devi Prasad Vishwanath Prasad
Supreme CourtHelps department
The officer rejected my books, estimated my profits at a flat rate, and then also added an unexplained cash credit. Can he do both, and must he say what source the credit came from?
Yes to both, subject to the facts. The Supreme Court held there is nothing in law preventing the Income-tax Officer, in an appropriate case, from taxing both a cash credit whose source and nature are not satisfactorily explained and the business income he estimates after rejecting the books, following Kale Khan Mohammad Hanif. Whether he may do so in a given case depends on its own facts. Where a cash credit is unexplained the officer may hold it to be the assessee's income and need not show what source it came from; it is for the assessee to prove that it is income from a source already taxed.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
