Electronic – Potentials in a MOSFET

A MOSFET always consumes power from the circuit. It has no mechanism to convert energy from some other form to electrical energy.

Therefore, the currents through a MOSFET always flow from a higher potential to a lower one.

This means, for an n-channel FET, if the drain is biased higher than the source, current will flow from drain to source (through the channel). If the source is biased higher than the drain, current will flow from source to drain (through the body diode).

Now, Lets say I have connected Drain to higher than Source and current is flowing through the body diode, But at the same time I want to turn on the MOSFET Source to Drain channel to allow current to flow from the channel from source to drain parallel with body diode.

If you turn on the FET, you may get parallel conduction through the channel and body diode, but both currents will flow from drain to source, because the drain is at a higher potential.

The electrons come from the source, which is an N-doped region. This source quotes Chenming Hu's book "Modern Semiconductor Devices for Integrated Circuits":

...there are few electrons in the P-type body, and it can take minutes for thermal generation to generate the necessary electrons to form the inversion layer... The inversion electrons are supplied by the N+ junctions...

I also ran across a (probably illegal) PDF copy of Ali Niknejad's book "Electromagnetics for High-Speed Analog and Digital Communication Circuits". I'm not going to link to it, but here's the relevant quotation from section 2.3 regarding MOS capacitors:

In the above discussion you may have wondered, “Where do the electrons come from to form the inversion layer?” In the body of the MOS-C structure, electrons are minority carriers and few and far between. So when inversion occurs, where do we find all the electrons necessary to invert the surface? Well, there was a subtle assumption that if we apply a change in gate voltage, we wait long enough for thermal generation to create a sufficient number of electrons to form the surface layer. We may have to wait a very long time! In other words, if we apply a fast enough signal to the gate, there isn’t enough time for the minority carriers to be generated and thus the capacitance remains at the low value given by depletion.

While the depletion region can respond very quickly to our gate voltage since it is formed by majority carriers, the minority carrier generation is slow. There is a simple way to solve this problem, as shown in Fig. 2.25, where a n+ grounded contact is placed adjacent to the gate. Normally electrons are prevented from entering the body, like any good pn-junction. But as we raise the surface potential, electrons can easily diffuse into the surface of the structure. Since the energy distribution of electrons in thermal equilibrium is exponential, changing the potential barrier linearly results in an exponential increase in the number of electrons that can cross the n+-surface junction and likewise an exponential increase in surface conductors.

I redrew Figure 2.25 to illustrate what he's talking about. You can see how similar this is to a MOSFET:

In an NMOSFET, when \$V_S > V_B\$, you get a secondary effect called the body effect or the substrate bias effect. This effect acts to increase the threshold voltage. According to Wikipedia, the body is acting more like a second gate.