“unexplained cash credit”

Cash Credits & Unexplained ItemsSection 68Section 687,118 judgments

The decision most relied on for unexplained cash credit is Sumati Dayal v. CIT (214 ITR 801), cited in 1,967 judgments on BharatTax.

Leading authorities on unexplained cash credit

Sumati Dayal v. CIT

214 ITR 801 · 1995 · Supreme Court

1,967

citing judgments

The Revenue is entitled to look behind the apparent form of a transaction to discover its true nature, applying the test of human probabilities and surrounding circumstances. If transactions defy logic or are unnatural, they can be treated as bogus, even if supported by some documentation, especially in cases of cash credits or unexplained investments.

CIT v. Orissa Corporation Pvt. Ltd.

159 ITR 78 · 1986 · Supreme Court

897

citing judgments

When an assessee provides the identity and address of a creditor or investor for a cash credit or share capital under Section 68, the burden shifts to the Department to establish lack of genuineness or creditworthiness, requiring it to conduct further inquiries; mere non-compliance by third parties to summons cannot be the sole basis for an adverse inference against the assessee.

(Central)-1 v. NRA Iron & Steel (P) Ltd.

103 Taxmann.com 48 · 2019 · Supreme Court

696

citing judgments

When assessing cash credits, share capital, or loans, the assessee bears the onus to prove the identity, creditworthiness, and genuineness of transactions. This burden is not discharged merely by documentary evidence if field inquiries reveal accommodation entries or dealings with paper/shell companies.

Commissioner of Income Tax v. Nova Promoters and Finlease (P) Ltd.

342 ITR 169 · 2012 · High Court

658

citing judgments

To make an addition under Section 68 for unexplained cash credits, the Assessing Officer must conduct proper inquiry into the identity, genuineness, and creditworthiness of the creditor, especially concerning share application money. The assessee's initial discharge of burden by providing necessary details shifts the onus back to the AO for further investigation, including the source of source.

Kale Khan Mohammad Hanif v. CIT

50 ITR 1 · 1963 · Supreme Court

581

citing judgments

The assessee bears the onus of proving the source and nature of any sum of money or receipt found to have been received by them. If the assessee fails to satisfactorily explain the receipt, the Income-tax Officer is entitled to treat it as taxable income.

Lalchand Bhagat Ambica Ram v. CIT

37 ITR 288 · 1959 · Supreme Court

570

citing judgments

Where an assessee maintains regular books of account, and these books are not rejected or found defective by the Assessing Officer, any cash deposits or available cash shown in the cash book, if sufficient to cover the transaction, cannot be treated as unexplained income or an addition under sections 68 or 69A.

CIT v. Daulat Ram Rawatmull

87 ITR 349 · 1973 · Supreme Court

525

citing judgments

The onus to prove that an apparent transaction or explanation is not real lies with the person who claims it to be so. If an assessee provides a plausible explanation for a transaction, the revenue must establish that the apparent transaction is not genuine.

CIT v. P. Mohanakala

291 ITR 278 · 2007 · Supreme Court

525

citing judgments

The Supreme Court emphasized that in the absence of concrete rebuttal by the assessee, circumstantial evidence holds significant weight, applying the doctrine of preponderance of probability, particularly when assessing undisclosed income or unexplained cash credits.

Judgments citing unexplained cash credit

Vinita Jagdesh Aswani, Pune vs. Income Tax Officer, Ward-8(1), Pune

ITA 37/PUN/2024[2017-18]Status: DisposedITAT Pune01 Oct 2024AY 2017-18

Bench: Hon’Ble Shri G. D. Padmahshali & Hon’Ble Shri Vinay Bhamoreassessment Year : 2017-18 Vinita Jagdesh Aswani C-Block, 1/21, Opp. Gurudwara, Pimpri, Pune-411017. Pan: Azrpa6822E. . . . . . . . Appellant V/S The Income Tax Officer, Ward-8(1), Pune. . . . . . . . Respondent Appearances Assessee By : Ms Vibha Gulabani [‘Ld. Ar’] Revenue By : Mr Arvind Desai [‘Ld. Dr’] Date Of Conclusive Hearing : 25/09/2024 Date Of Pronouncement : 01/10/2024 Order Per G. D. Padmahshali, Am; This Appeal Of The Assessee Challenges The Din & Order No. Itba/Nfac/S/250/2023-24/1057730966(1) Dt. 06/11/2023 Passed U/S 250 Of The Income-Tax Act, 1961 [‘The Act’ Hereinafter] By The National Faceless Appeal Centre, Delhi [‘Nfac’ Hereinafter] Which In Turn Arisen Out Of Order Of Assessment Dt. 23/12/2019 Passed U/S 144 Of The Act By The Income Tax Officer, Ward-8(1), Pune[‘Ao’ Hereinafter] For Assessment Year 2017-18 [‘Ay’ Hereinafter];

For Appellant: Ms Vibha Gulabani [‘Ld. AR’]For Respondent: Mr Arvind Desai [‘Ld. DR’]

Section 115BSection 142(1)Section 144Section 145(3)Section 250Section 68

rejected the books of the assessee and framed the assessment u/s 144 of the Act by treating entire SBN deposits as unexplained cash credit u/s 68 of the Act and brought the same to tax u/s 115BBE of the Act. ITAT-Pune Page 2 of 4 Vinita Jagdesh Aswani

Shri Balaji Shikshan Prasarak Mandal, Aurangabad vs. Addl JCIT(A)-3, Income Tax Bengalaru

ITA 1432/PUN/2024[2017-2018]Status: DisposedITAT Pune01 Oct 2024AY 2017-2018

Bench: Hon’Ble Shri G. D. Padmahshali & Hon’Ble Shri Vinay Bhamoreassessment Year : 2017-18 Shri Balaji Shikshan Prasarak Mandal At & Post : Chowka, Tal.: Phulambri, Dist.: Ch. Sambhaji Nagar-431008. Pan: Aaits9855P. . . . . . . . Appellant

For Appellant: Mr Umesh Ruparel [‘Ld. AR’]For Respondent: Mr BS Rajpurohit [‘Ld. DR’]

Section 115BSection 142(1)Section 144Section 250Section 68

material & written submission placed on record, and treated the difference of cash deposits and opening cash balance held as on 09/11/2016 as unexplained cash credit u/s 68 of the Act while making addition of ₹5,66,535/- in the hand of assessee which was brought to tax u/s 115BBE

Navdurga Advisory Pvt. Ltd, Nagpur vs. Assistant Commissioner of Income Tax, Central Circle-1(3), Nagpur

In the result, appeal filed by the assessee for ay 2011–12 is allowed for statistical purposes

ITA 218/NAG/2023[2017-18]Status: DisposedITAT Nagpur01 Oct 2024AY 2017-18

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Rajesh LoyaFor Respondent: Shri Sandipkumar Salunke

Section 143(3)Section 153CSection 234BSection 68

amount received is fully substantiated by legal and cogent evidence and therefore the action of both the authorities in treating the same as unexplained cash credit is improper and unjustified. (5) That the learned CIT(A) erred in law and on facts in confirming the addition of Rs.2 ... Navdurga Advisory Pvt. Ltd. ITA no.212 to 218/Nag./2023 evidence and therefore the action of both the authorities in treating the same as unexplained cash credit is improper and unjustified. That the learned CIT(A) erred in law and on facts in sustaining the action of AO in holding that

Navdurga Advisory Pvt. Ltd., Nagpur vs. Assistant Commissioner of Income Tax, Central Circle-1(3), Nagpur

In the result, appeal filed by the assessee for ay 2011–12 is allowed for statistical purposes

ITA 217/NAG/2023[2016-17]Status: DisposedITAT Nagpur01 Oct 2024AY 2016-17

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Rajesh LoyaFor Respondent: Shri Sandipkumar Salunke

Section 143(3)Section 153CSection 234BSection 68

Navdurga Advisory Pvt. Ltd., Nagpur vs. Assistant Commissioner of Income Tax, Central Circel-1(3), Nagpur

In the result, appeal filed by the assessee for ay 2011–12 is allowed for statistical purposes

ITA 216/NAG/2023[2015-16]Status: DisposedITAT Nagpur01 Oct 2024AY 2015-16

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Rajesh LoyaFor Respondent: Shri Sandipkumar Salunke

Section 143(3)Section 153CSection 234BSection 68

Navdurga Advisory Pvt. Ltd, Nagpur vs. The Assistant Commissioner of Income Tax, Central Circle-1(3), Nagpur

In the result, appeal filed by the assessee for ay 2011–12 is allowed for statistical purposes

ITA 215/NAG/2023[2014-15]Status: DisposedITAT Nagpur01 Oct 2024AY 2014-15

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Rajesh LoyaFor Respondent: Shri Sandipkumar Salunke

Section 143(3)Section 153CSection 234BSection 68

Navdurga Advisory Pvt. Ltd, Nagpur vs. The Assistant Commissioner of Income Tax, Central Circle-1(3), Nagpur

In the result, appeal filed by the assessee for ay 2011–12 is allowed for statistical purposes

ITA 214/NAG/2023[2013-14]Status: DisposedITAT Nagpur01 Oct 2024AY 2013-14

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Rajesh LoyaFor Respondent: Shri Sandipkumar Salunke

Section 143(3)Section 153CSection 234BSection 68

Navdurga Advisory Pvt. Ltd, Nagpur vs. The Assistant Commissioner of Income Tax, Central Circel-1(3), Nagpur

In the result, appeal filed by the assessee for ay 2011–12 is allowed for statistical purposes

ITA 213/NAG/2023[2012-13]Status: DisposedITAT Nagpur01 Oct 2024AY 2012-13

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Rajesh LoyaFor Respondent: Shri Sandipkumar Salunke

Section 143(3)Section 153CSection 234BSection 68

Navdruga Advisory Pvt. Ltd., Nagpur vs. The Assistant Commissioner of Income Tax, Central Circle-1(3), Nagpur

In the result, appeal filed by the assessee for ay 2011–12 is allowed for statistical purposes

ITA 212/NAG/2023[2011-2012]Status: DisposedITAT Nagpur01 Oct 2024AY 2011-2012

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Rajesh LoyaFor Respondent: Shri Sandipkumar Salunke

Section 143(3)Section 153CSection 234BSection 68

Jaya Balajee Real Media Pvt Ltd, Hyderabad vs. DCIT., Central Circle - 2(3), Hyderabad

In the result, the appeal filed by the assessee is partly allowed

ITA 674/HYD/2024[2017-18]Status: DisposedITAT Hyderabad01 Oct 2024AY 2017-18

Bench: Shri Manjunatha G. Hon’Ble & Shri K. Narasimha Chary Hon’Bleassessment Year – 2017-18 Jaya Balaji Real Media Pvt Vs. The Deputy Commissioner Of Income Tax, Limited, Central Circle – 2(3), Hyderabad. Hyderabad. Pan : Aaecb3005F (Appellant) (Respondent) Assessee By: Shri M.V. Prasad, C.A. Revenue By: Ms. Th Vijaya Lakshmi, Cit-Dr Date Of Hearing: 19.08.2024 Date Of Pronouncement: 01.10.2024

For Appellant: Shri M.V. Prasad, C.AFor Respondent: Ms. TH Vijaya Lakshmi, CIT-DR

Section 132Section 132(4)Section 68

advances received from various persons during the course of search proceedings itself. Although, the appellant has admitted for disclosure of the unexplained cash credits towards entire cash deposit in the bank account, but subsequently, able to explain source of Rs.20 crores, out of advances received from 7 persons, amounting ... disregarded by applying the theory of human probability. Therefore, he submitted that the ld.CIT(A) is erred in sustaining the addition made towards unexplained cash credit under Section 68 of the Income Tax Act. Therefore, he submitted that the addition made by the AO should be deleted

Income Tax Officer, Ward-6(2), Kol, Kolkata vs. Genesis Computech Pvt. Ltd., Kolkata

In the result, appeal of the Revenue is dismissed

ITA 1733/KOL/2024[2017-18]Status: DisposedITAT Kolkata01 Oct 2024AY 2017-18

Bench: the Hon'ble ITAT, is eligible to contest on merit before the Hon'ble

Section 143(3)Section 250Section 68

total income amounting to ₹ 4,36,876/- primarily relating to unexplained cash deposit of ₹ 3,90,000/- made during the demonetization periodand unexplained cash credit in bank extent of ₹ 46,113/-. I.T.A. No.1733/Kol/2024 Genesis Computech Pvt. Ltd. 5. Dissatisfied with the addition made by the Assessing Officer, assessee went

Assistant Commissioner of Income Tax, Mumbai vs. Keshavji Nongha Shah, Mumbai

In the result, the appeal filed by the Revenue is dismissed

ITA 862/MUM/2024[2014-15]Status: DisposedITAT Mumbai01 Oct 2024AY 2014-15

Bench: Shri B.R. Baskaran & Shri Sunil Kumar Singhassessment Year : 2014-15 Asst.Commissioner Of Income Keshavji Nongha Shah, Tax, M/S. Ankur Harganga Mahal, Piramal Chambers, Vs. Khodad Circle, Dadar T.T., Lalbaug, Mumbai Mumbai. Pan : Aaeps6097B (Appellant) (Respondent) For Assessee : Shri Nishit Gandhi, For Revenue : Shri P.D. Chougule,(Addl.Cit) Sr.Dr Date Of Hearing : 16-07-2024 Date Of Pronouncement : 01-10-2024 Order Per B.R. Baskaran, A.M :

For Appellant: Shri Nishit GandhiFor Respondent: Shri P.D. Chougule,(Addl.CIT) Sr.DR

Section 10(38)Section 131Section 133(6)Section 68

deposited in respondent’s bank account. In view thereof, the CIT(A) found there was no reason to add the capital gains as unexplained cash credit under section 68 of the Act. The Tribunal while dismissing the appeals filed by the Revenue also observed on facts that these shares were ... documents furnished by the assessee. 14. Accordingly, we hold that the long term capital gains declared by the assessee cannot be assessed as unexplained cash credit u/s 68 of the Act. Accordingly, we confirm the order passed by Ld CIT(A). 15. In the result, the appeal filed

Tayani Holdings Pvt Ltd, Matunga Mumbai vs. ITO Ward 8(3)(1), Mumbai, Ayakar Bhavan

In the result, the appeal filed by the assesse is allowed for statistical purposes

ITA 4129/MUM/2024[2010-11]Status: DisposedITAT Mumbai01 Oct 2024AY 2010-11

Bench: Shri Pavan Kumar Gadale & Shri Girish Agrawalm/S Tayani Holdings Pvt Ltd Vs. Ito- 8(3)(1), 285, Park View Bhiwanji R.No.616, Arjan Khimji Marg, Aayakar Bhavan, Central Railway, Matunga, M.K.Road, Mumbai – 400019. Mumbai.400020. Pan/Gir No. Aadct3311K (अपीलाथ"/Appellant) (""यथ"/Respondent)

Section 133(6)Section 148Section 153CSection 234ASection 246ASection 292BSection 40A(2)(b)Section 68

satisfied with the evidences and relied on the decisions and treated the share application money and unsecured loans as unexplained cash credit u/s 68 of the Act and assessed the total income of Rs.5,98,35,000/- and passed order u/sec143(3) r.w.s 147 of the Act dated

ACIT, Range-1, Lucknow vs. Maa Raktdantika Contractors and Suppliers Pvt. Ltd., Lucknow

In the result, the appeal filed by the Revenue is dismissed and the appeal filed by the assessee is allowed for statistical purposes

ITA 437/LKW/2020[2017-18]Status: DisposedITAT Lucknow30 Sept 2024AY 2017-18

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(3)Section 28(2)(i)Section 68

assessee based on the documentary evidence during the proceedings. Accordingly, the learned CIT (A) treated the amount received from such parties as unexplained cash credit under section 68 of the Act. In this connection we note that the impugned amount has been taxed twice firstly the same was treated ... sales and secondly the same was treated as unexplained cash credit under section 68 of the Act. Even if we assume that the action of the learned CIT (A) is correct i.e. the impugned amount is representing the cash credit as provided under section 68 of the Act. Then

M/S. Maa Rakltdantika Contractors and Suppliers Pvt. Ltd., Lucknow vs. The DCIT/ACIT, Range-4, Lucknow

In the result, the appeal filed by the Revenue is dismissed and the appeal filed by the assessee is allowed for statistical purposes

ITA 384/LKW/2020[2017-18]Status: DisposedITAT Lucknow30 Sept 2024AY 2017-18

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(3)Section 28(2)(i)Section 68

Shyamarani Manna Maity, South 24 Parganas vs. I.T.O., Ward - 26(4), Kolkata

In the result, appeal of the assessee is allowed for statistical purposes

ITA 1811/KOL/2024[2017-2018]Status: DisposedITAT Kolkata30 Sept 2024AY 2017-2018

Bench: or during the course of appeal proceedings.”

Section 143(3)Section 250Section 69A

circumstances of the case, Ld. CIT(A) erred in confirming the action AO who made an addition of Rs. 10,00,000/- as unexplained cash credit u/s 69A of the Act. (b) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming

M/S. Stone Metals Pvt. Ltd., Kolkata vs. I.T.O., Ward - 3(3), Kolkata

In the result, appeal of the assessee is allowed

ITA 1499/KOL/2024[2011-2012]Status: DisposedITAT Kolkata30 Sept 2024AY 2011-2012

Bench: hearing of the appeal.”

Section 143(3)Section 144Section 147Section 148Section 250

formed. 2. For that the Ld. AO erred in assessing Rs. 4 Lakh allegedly received by the assessee from M/s Turf Advertising as unexplained cash credit whereas the impugned amount was not received during the year under appeal but the Financial Year 2011-12 (Assessment Year 2012-13). As such

M/S. Sukaram Marketing Ltd., Kolkata vs. I.T.O., Ward - 8(2), Kolkata

In the result, both the appeals of the assessee stand allowed

ITA 1251/KOL/2024[2018-2019]Status: DisposedITAT Kolkata30 Sept 2024AY 2018-2019

Bench: Shri Sanjay Gargandshri Rakesh Mishra

Section 271ASection 68

addition of Rs.7,74,553/- made by the Assessing Officer u/s 68 of the Act by treating the advance outstanding as unexplained cash credit. I.T.A. Nos.1250&1251/Kol/2024 Assessment Year: 2018-19 M/s Sukaram Marketing Ltd 3. The ld. counsel has brought to our attention to the impugned assessment order ... finding the said amount credited in the bank account, made the impugned addition of Rs.5,89,860/- u/s 68 of the Act as unexplained cash credit. 10. The ld. CIT(A) confirmed the addition so made by the Assessing Officer. 11. The ld. counsel for the assessee has submitted that

M/S. Sukaram Marketing Ltd., Kolkata vs. I.T.O., Ward - 8(2), Kolkata

In the result, both the appeals of the assessee stand allowed

ITA 1250/KOL/2024[2018-2019]Status: DisposedITAT Kolkata30 Sept 2024AY 2018-2019

Bench: Shri Sanjay Gargandshri Rakesh Mishra

Section 271ASection 68

M/S Multitech Solutions, Kolkata vs. ACIT, Cir. -31, Kolkata

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 1443/KOL/2023[2013-14]Status: DisposedITAT Kolkata30 Sept 2024AY 2013-14

Bench: Shri Sanjay Garg & Shri Rakesh Mishraassessment Year: 2013-14

For Appellant: Shri Giridhar Dhelia, AdvocateFor Respondent: Shri Raja Sengupta, Additional CIT

Section 143(2)Section 143(3)Section 250

course of the assessment proceedings, two major additions were made i.e. disallowance of Provision for Warranty of Rs.24,17,582/- and addition of unexplained Cash Credit of Rs. 19,60,000/-. The Ld. AO completed the assessment u/s 143(3) of the I.T. Act, 1961 on 28.02.2016 by assessing ... grounds of appeal are allowed. 7. Ground Nos. 5 and 6 relate to the addition of Rs. 18,02,680/- on account of unexplained cash credits. The Ld. CIT(A) confirmed the addition as under: 6.1 During the course of assessment proceedings, the AO noticed that the appellant firm