“addition u/s 68”

Cash Credits & Unexplained ItemsSection 68Section 682,598 judgments

The decision most relied on for addition u/s 68 is CIT v. Lovely Exports (P) Ltd. (216 CTR 195), cited in 854 judgments on BharatTax.

Leading authorities on addition u/s 68

CIT v. Lovely Exports (P) Ltd.

216 CTR 195 · 2008 · Supreme Court

854

citing judgments

If an assessee company receives share application money from alleged bogus shareholders and provides their details to the Assessing Officer, no addition can be made under Section 68 in the company's hands; the Department must proceed against the shareholders by reopening their individual assessments.

CIT v. Divine Leasing & Finance Ltd.

299 ITR 268 · 2008 · High Court

426

citing judgments

The Assessing Officer cannot add share capital or share premium amounts if the assessee provides the identity and creditworthiness of the subscriber and establishes the genuineness of the transaction. The court may admit additional evidence under Rule 46A, such as the PAN identity of the creditor.

CIT v. Devi Prasad Vishwanath Prasad

72 ITR 194 · 1969 · Supreme Court

272

citing judgments

If there is an unexplained cash credit, the Assessing Officer can treat it as the assessee's income, even when the income is finalized on an estimation basis, without proving its specific source. The onus then shifts to the assessee to prove that the income represented by the cash credit has already been taxed.

CIT v. Dwarkadhish Investment (P) Ltd.

330 ITR 298 · 2011 · High Court

218

citing judgments

An assessee cannot be asked to explain the source of the source for cash credits, particularly share capital or share application money, once they have discharged the initial onus regarding the identity, genuineness of the transaction, and creditworthiness of the immediate investor.

1) CIT v. Sahibganj Electric Cables Pvt. Ltd. (

151 ITR 150 · 1985 · High Court

citing judgments

The assessee's burden under Section 68 to prove cash credits is discharged by establishing the identity of the creditor and the genuineness of the transaction; the assessee is not required to prove the creditor's source of funds or creditworthiness, as the department can use Section 131 for further investigation.

Jatia Investment Co. v. CIT

206 ITR 718 · 1994 · High Court

citing judgments

An addition under Section 68 for unexplained cash credits cannot be made when there is no actual cash credit or flow of funds, such as in cases of share swaps or notional credits.

Hastimal v. CIT

49 ITR 273 · 1963 · High Court

citing judgments

An assessee's duty regarding the creditworthiness of a creditor is limited to the transactions between them, and they are not required to investigate the ultimate source of the creditor's funds. If the genuineness of the transaction and the creditworthiness are established, no addition under Section 68 is permissible.

CIT v. Prameshwar Bohra

301 ITR 404 · 2008 · High Court

citing judgments

An amount already credited in the books of account in an earlier assessment year cannot be added again as an unexplained cash credit under Section 68 of the Income-tax Act in a subsequent assessment year.

Judgments citing addition u/s 68

Ravi Mahexa, Daman and Diu vs. Income Tax Officer, Daman Ward, Daman

ITA 195/SRT/2022[2017-18]Status: DisposedITAT Surat31 Jul 2023AY 2017-18

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita Nos.193 To 195/Srt/2022 Assessment Years: (2015-16 To 2017-18) (Physical Hearing) Ravi Mahexa, Vs. Income Tax Officer, Ward-5, 7Th 14/55, Dilipnagar Near Dilip Nagar Vapi, Fortune Square, Floor, 8Th Floor & 9Th Floor, Ii, Ground, Daman, Daman – 396210, Daman & Diu (Ut) Chala Road, Vapi-396191 Ravi Mahexa Income Tax Officer, Daman 14/55, Dilipnagar Near Dilip Nagar Ward, Daman Jevanji Ground, Daman, Daman & Diu (Ut) - Apartment, Kavi Khabardar 396210 Road, Daman-396210 Vapi "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Apkpm1888H (Assessee) (Respondent) Assessee By Shri P. M. Jagasheth, Ca Respondent By Shri Minal Kamble, Sr. Dr Date Of Hearing 19/07/2023 Date Of Pronouncement 31/07/2023

Section 115BSection 143(3)Section 145(3)Section 40ASection 68

period of demonetization were considered by the Assessing Officer, as unexplained in the hand of the assessee, therefore, Assessing Officer made addition u/s 68 of the Act. 8. On appeal, by the assessee, the ld CIT(A) has confirmed the action of the Assessing Officer, therefore, assessee is in further ... also a cash deposited by the assessee in its bank accounts, during the demonetization period, which was not subject to addition u/s 68 of the Act. The acceptance of cash deposit by Assessing Officer in the bank account to the tune of Rs.2,42,27,350/-, as a genuine money

Ravi Mahexa, Daman and Diu vs. Income Tax Officer, Daman Ward, Daman

ITA 194/SRT/2022[2016-17]Status: DisposedITAT Surat31 Jul 2023AY 2016-17

Section 115BSection 143(3)Section 145(3)Section 40ASection 68

Ravi Mahexa, Daman and Diu vs. Income Tax Officer, Ward 5, Vapi

ITA 193/SRT/2022[2015-16]Status: DisposedITAT Surat31 Jul 2023AY 2015-16

Section 115BSection 143(3)Section 145(3)Section 40ASection 68

Shri Darshan K Vakharia, Mumbai vs. Income Tax Officer, Ward 2(1), Mumbai

Appeal is allowed

ITA 1540/MUM/2023[2012-2013]Status: DisposedITAT Mumbai28 Jul 2023AY 2012-2013

Bench: Shri Br Baskaran, Am & Shri N. K. Choudhry, Jm आयकरअपीलसं./ I.T.A. No. 1540/Mum/2023 (निर्धारणवर्ा / Assessment Year: 2012-13) & आयकरअपीलसं./I.T.A. No. 1539/Mum/2023 (निर्धारणवर्ा / Assessment Year: 2013-14)

For Appellant: Shri. Vimal PunmiyaFor Respondent: Shri. Nagnath B. Pasale

Section 132Section 132(4)Section 147Section 250

Tradelink Ltd and Rs. 60,000/- to M/s Vasudev P Rawal (HUF). The accommodation entries pertain to the AY 2011-12 and necessary addition u/s 68 could be made in that particular AY only. It was not clear whether regular assessment/reassessment was done in AY 2011-12 in which ... question as unexplained expenditure could not arise, hence on this count also, the provisions of section 68 is not applicable and therefore addition u/s. 68 of the Act is un-sustainable. Consequently, we are inclined to delete the addition of Rs. 3 Lacs in total. Resultantly the instant appeal

Shri Darshan K Vakharia, Mumbai vs. Income Tax Officer, Ward 2(1), Mumbai

Appeal is allowed

ITA 1539/MUM/2023[2013-2014]Status: DisposedITAT Mumbai28 Jul 2023AY 2013-2014

For Appellant: Shri. Vimal PunmiyaFor Respondent: Shri. Nagnath B. Pasale

Section 132Section 132(4)Section 147Section 250

CIT 3(1)(1), Mumbai vs. M/S. Ramlal Jwellers Private Limited, Mumbai

In the result, appeal of the Revenue is dismissed as well as Cross Objection of the assessee is dismissed as infructuous

ITA 1600/MUM/2023[2017-18]Status: DisposedITAT Mumbai26 Jul 2023AY 2017-18

Section 115BSection 133(6)Section 143(3)Section 68

further stated that the cash deposits have to be taxed as business income and not as income from other sources. Since the addition u/s 68 is deleted, the additional arguments by the appellant has become infructuous. 7.21 In view of the aforesaid findings, I hold that the present case

Mahendra Parakh, Mumbai vs. ACIT, Circl20(2), Mumbai

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

ITA 1566/MUM/2023[2014-15]Status: DisposedITAT Mumbai26 Jul 2023AY 2014-15

Bench: Shri B.R. Baskaran (Am) & Shri Narender Kumar Choudhry (Jm)

Section 10(38)Section 68

contended that the AO has not disproved the transactions carried on by the assessee and hence he could not have made the addition u/s 68 of the Act. He submitted that the learned CIT(A) was also not justified in confirming the addition. 6. The Learned DR, on the contrary

Mahesh Wood Products Private Limited, Delhi vs. ACIT, Central Circle-13, New Delhi

In the result the appeal of the assessee is allowed

ITA 1949/DEL/2022[2017-18]Status: DisposedITAT Delhi26 Jul 2023AY 2017-18

Bench: Shri G.S. Pannu, Hon’Ble & Shri Amit Shuklaasstt. Year: 2017-18 M/S. Mahesh Wood Products Vs. Asstt. Commissioner Of Private Limited 2042, Income Tax, Central Katra Tambacco, Khari Baoli, Circle-13, New Delhi. Central Delhi – 110 006 Pan Aaacm0118Q (Appellant) (Respondent)

For Appellant: Shri Suresh Gupta, CAFor Respondent: Dr. Maninder Kaur, Sr. Dr

Section 143(3)Section 68

Rs.2,09,548/- which is evident from the chart on page 10 of the order and this difference cannot be considered for addition u/s 68 being the credit not pertaining to year under consideration. The other two parties namely, M/s Ions Flow Rs.54,020/- and M/s New Rajdhani Packers & Movers

ACIT (Central), Ujjain vs. M/S Globus Housing Pvt. Ltd., Bhopal

In the result, appeal of the revenue is dismissed

ITA 615/IND/2018[2012-13]Status: DisposedITAT Indore25 Jul 2023AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniacit (Central) M/S. Globus Housing Pvt. Ltd. 176, Zone-Ii, First Floor, M.P. Ujjain Vs. Nagar, Bhopal (Appellant / Revenue) (Respondent/ Assessee) Pan: Aaecg 0623 J Revenue By Shri P.K. Mishra, Cit-Dr Respondent By Shri Hitesh Chimnani & Yash Kukreja, Ars Date Of Hearing 20.07.2023 Date Of Pronouncement 25.07.2023

Section 68

sustained. 9.9 In view of the totality of facts and circumstances, I find that the A.O. was not justified in making the addition u/s 68 by treating the said unsecured loan as unexplained. The addition is therefore, deleted.” 20. Apart from inquiry report the Ld. CIT(A) has also considered

Sanchit Vinod Jain, Mumbai vs. National Faceless Assessment Centre, Delhi

In the result, the appeal of the assessee is allowed

ITA 1287/MUM/2023[2014-2015]Status: DisposedITAT Mumbai24 Jul 2023AY 2014-2015

Bench: Shri Aby T. Varkey, Jm & Shri Amarjit Singh, Am आयकर अपील सं/ I.T.A. No. 1287/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2014-15) Sanchit Vinod Jain बिधम/ National Faceless 601, Shrimad Darshan, Shri Assessment Centre, Delhi. Vs. Rajchandra Mandir Marg, Ghatkopar, Mumbai- 400077. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. Ajlpj4491L (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Akshay Jain/Mahaveer Jain Revenue By: Shri Ram Krishna Kedia (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 05/07/2023 घोषणा की तारीख /Date Of Pronouncement: 24/07/2023 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals)/Nfac, Delhi Dated 21.02.2023 For Ay. 2014-15 Confirming The Action Of The Ao Levying Penalty U/S 271(1)(C) Of The Income Tax Act, 1961 (Hereinafter “The Act”) Of Rs.11,088/-. 2. Brief Facts Regarding Penalty Levied Is That The Assesse Had Filed The Return Of Income Of Rs.11,64,790/-. The Assessment Was Completed U/S 143(3) Of The Act At An Income Of Rs.12,00,671/- After Making An Addition U/S 68 Of The Act To The Tune Of Rs.35,884/-. The Addition Of Rs.35,884/- Was Because During The Course Of Assessment Proceedings, It Was Observed By Ao That Assessee Had Invested In Alleged Penny Stock Scrip Of M/S Sun Asian; & Has Derived Income By Way Of Sale Of The Such Scrip Of M/S Sun Asian Of 2800 Shares For A Total Consideration Of Rs.13,60,884/-.On Being Asked, The Assessee

For Appellant: Shri Akshay Jain/Mahaveer JainFor Respondent: Shri Ram Krishna Kedia (Sr. AR)

Section 10(38)Section 143(3)Section 271(1)(c)Section 68

Rs.11,64,790/-. The assessment was completed u/s 143(3) of the Act at an income of Rs.12,00,671/- after making an addition u/s 68 of the Act to the tune of Rs.35,884/-. The addition of Rs.35,884/- was because during the course of assessment proceedings

Mystuc Ekectribucs Limited, Mumbai vs. DCIT-CC-4(3) Mumbai, Mumbai

In the result, both the appeals filed by the assessee are partly allowed and both the appeals filed by the revenue are dismissed

ITA 5867/MUM/2019[2014-15]Status: DisposedITAT Mumbai24 Jul 2023AY 2014-15

Bench: Shri Amit Shukla & Shri Gagan Goyal

For Appellant: Shri Nishikant Gandhi & VishnuFor Respondent: Smt. Riddhi Mishra (CIT-DR)

Section 143(2)Section 143(3)Section 145(3)Section 153CSection 250Section 68

operating income of Rs. 45,44,563/-credited to the Statement of Profit & Loss. 4. The ld. CIT (A) erred in confirming the addition u/s 68 of the Act to the extent of Rs. 4,96,87,500/- subject to verification by the AO. 4.i. In doing ... sustaining rejection of books of accounts (addition of Rs. 23, 44,406/-) addition of other income (Rs. 45,44,563/-) and sustaining addition u/s. 68 to the extent of Rs. 4,96,87,500/-. Assessee being further aggrieved with this order of Ld. CIT (A) passed u/s. 250 preferred this

Mukta Agriculture Ltd., Mumbai vs. DCIT(CC)-4(3), Mumbai

In the result, both the appeals filed by the assessee are partly allowed and partly allowed for statistical purposes respectively and both the appeals filed by the revenue are dismissed

ITA 5778/MUM/2019[2014-15]Status: DisposedITAT Mumbai24 Jul 2023AY 2014-15

Bench: Shri Amit Shukla & Shri Gagan Goyal

For Appellant: Shri Nishikant Gandhi & VishnuFor Respondent: Smt. Riddhi Mishra (CIT-DR)

Section 133(6)Section 143(2)Section 143(3)Section 145(3)Section 153CSection 250Section 68

year at Rs. 23,89,245/- being 1% of the turnover. Mukta Agriculture Ltd. 4. The Id.CIT (A) erred in confirming the addition u/s. 68 of the Act to the extent of Rs. 6, 95, 00,000 /-subjects to verification by the AO. 4.1. In doing so, the Ld.CIT ... sustaining rejection of books of accounts (addition of Rs. 23,89,245/-), addition of other income (Rs. 9,78,917/-) and sustaining addition u/s. 68 to the extent of Rs. 6.95 crore. Assessee being further aggrieved with this order of Ld. CIT (A) passed u/s. 250 preferred this appeal before

ACIT, Central Circle- 4, New Delhi vs. Sanjay Duggal, Faridabad

ITA 3532/DEL/2018[2009-10]Status: DisposedITAT Delhi20 Jul 2023AY 2009-10

Bench: Or During The Course Of Hearing Of The Appeal.”

For Appellant: “1. The

Section 132Section 143(2)Section 147Section 148Section 153ASection 68

erred in sustaining the orders passed by the Ld AO u/s 147/143(3) without appreciating that the no addition u/s 68 can be made merely relying upon the bank statements, which was never books of accounts of the assessee; 6 That on the facts and in the circumstances

Bhandari Gold and Jewellers Private Limited, Mumbai vs. CIT (Appeal), NFAC - Delhi

In the result, appeal filed by the assessee is allowed for statistical purpose

ITA 1619/MUM/2022[2017-2018]Status: DisposedITAT Mumbai19 Jul 2023AY 2017-2018

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Bledcit – 6(1)(2) V. M/S. Bandari Gold & Jewellers Pvt. Ltd., 407, Bussaudyog Bhavan Room No. 538B, 5Th Floor Tokersi, Jivraj Road, Sewree Aayakar Bhavan, M.K. Road Mumbai - 400015 Mumbai - 400020 Pan: Aadcb1291J (Appellant) (Respondent)

Section 143(3)Section 68

issued to the alleged clients could not be complied with, without any further effort and verification, the Ld. DCIT proceeded to make an addition u/s 68 merely relying on the information based on suspicion which is not a proper approach. To establish the Revenue's case and in order ... well as the sales. Since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. This view is also supported by the decision of Hon'ble Delhi High Court in the case

Cy. CIT 6(1) (2), Mumbai vs. M/S. Bhandari Gold & Jewellers Pvt. Ltd, Mumbai

In the result, appeal filed by the assessee is allowed for statistical purpose

ITA 1564/MUM/2022[2017-18]Status: DisposedITAT Mumbai19 Jul 2023AY 2017-18

Section 143(3)Section 68

ACIT, Circl-43(1), New Delhi vs. Ujala Credit Co- Operative Society Ltd., New Delhi

In the result, appeal of the Revenue is dismissed

ITA 9259/DEL/2019[2015-16]Status: DisposedITAT Delhi19 Jul 2023AY 2015-16

Bench: Shri Kul Bharat & Shri M. Balaganesh

For Appellant: Shri Naveen Agarwal, CA & Ms. Rema Mohan, AdvFor Respondent: Shri Gurpreet Singh, Sr. DR

Section 144

added u/s 68. 'The Ld, AR has strongly relied upon the remand reports of the AO, Under these circumstances, I hold that no addition u/s 68 is called for and hence the addition made by the AO on this account at Rs. 39,00,44,944/- is directed

Birla Transasia Carpets, Bulandshahr vs. DCIT, New Delhi

In the result, the appeal of the assessee is allowed and

ITA 4911/DEL/2016[2008-09]Status: DisposedITAT Delhi19 Jul 2023AY 2008-09

Section 143(3)Section 68

tune of Rs. 1,81,90,701/- with the same kind of facts, which proves that the AO had rightly made addition u/s 68 of the LT. Act, 1961. Page 3 of 17 ITA No.4911/Del/2016 & 2. The appellant craves leave for reserving the right to amend, modify, alter ... common order for the sake of convenience. 4. The only effective issue to be decided in this appeal is as to whether the addition u/s 68 of the Act in respect of unsecured loans received by the assessee could be made in the facts and circumstances of the instant case

DCIT, New Delhi vs. M/S. Birla Transasia Carpet Ltd., New Delhi

In the result, the appeal of the assessee is allowed and

ITA 4329/DEL/2016[2008-09]Status: DisposedITAT Delhi19 Jul 2023AY 2008-09

Section 143(3)Section 68

Mrs Sunita Shyam Malpani, Mumbai vs. Income Tax Officer, Ward 25(1)(3), Mumbai

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

ITA 344/MUM/2023[2010-2011]Status: DisposedITAT Mumbai18 Jul 2023AY 2010-2011

Bench: Shri Pavan Kumar Gadalesunita Shyam Malpani, Vs. Ito 25(1)(3), 701,Plot No.117, Room No.703, Karanapartment, Kautilyabhavan, Lokhandwalacomplex, Bandra Bkc, Andheri (W), Mumbai-400051. Mumbai-400053. "थायी लेखा सं./जीआइआर सं.Pan/Gir No.Acppm8552J (अपीलाथ"/Applicant) (""यथ"/Respondent)

Section 10Section 143Section 144ASection 148Section 250Section 68Section 69C

Appellant during the 3 ITA . No. 344/MUM/2023 (A.Y.: 2010-11 SUNITA SHYAM MILPANI course of CIT(A) proceedings. It is submitted that addition u/s 68 of the Income Tax Act, 1961 confirmed by the Ld. CIT(A) is on the basis assumptions, presumption, conjecture and surmises without understanding the facts ... appellant with circumstantial evidences the Ld. A/R filed all possible documentary evidences in his possession. It is clear that AO has based his addition u/s 68 of the Act on the basis of statement of the entry operator and information received from the Investigation Wing of the Department. However

Shri Amarjeet Singh, Jammu vs. Income Tax Officer Ward-2 (1), Jammu

In the result, the appeal of the assessee is dismissed

ITA 60/ASR/2020[2008-09]Status: DisposedITAT Amritsar18 Jul 2023AY 2008-09

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

For Appellant: Sh. Aman Raj Bawa &For Respondent: Smt. Ratinder Kaur, Sr. DR

Section 144Section 147Section 148(2)Section 151Section 68

that the appellant failed to explain the cash deposits in its bank account and therefore, the CIT(A) was justified in confirming the addition u/s 68 of the I.T. Act. 7. Heard the rival contention and perused the material on record and impugned order. The ld. AR for the appellant