Section 102 — Unexplained credits

(1) Where any sum is found credited in the books of an assessee
maintained for any tax year, and—
( a) the assessee offers no explanation about the nature and source of such
credit; or
( b) the explanation offered about the nature and source of such credit by
assessee is not satisfactory in the opinion of the Assessing Officer,
then, the sum so credited shall be charged to income-tax as income of the assessee
of that tax year.
(2) For the purposes of sub-section (1), where the sum so credited consists of loan
or borrowing or any such amount, by whatever name called, the explanation offered
by such assessee shall be deemed to be not satisfactory, unless,—
( a) the person in whose name such credit is recorded in the books of such
assessee also offers an explanation about the nature and source of such
sum so credited; and
( b) such explanation in the opinion of the Assessing Officer has been found
to be satisfactory.
(3) For the purposes of sub-section (1), where the assessee is a company (not
being a company in which the public are substantially interested), and the sum so
credited consists of share application money, share capital, share premium or any
such amount, by whatever name called, the explanation offered by such assessee
company shall be deemed to be not satisfactory, unless—
( a) the person, being a resident in whose name such credit is recorded in
the books of such company also offers an explanation about the nature
and source of such sum so credited; and
( b) such explanation, in the opinion of the Assessing Officer has been found
to be satisfactory.
(4) Nothing contained in sub-section (2) or (3) shall apply if the person, in whose
name the sum referred to in those sub-sections is recorded, is a venture capital
fund or a venture capital company as referred to in Schedule V (Table: Sl. No. 6).