“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

Dinesh Kumar Chaurasia, Tonk vs. PCIT Central, Jaipur

In the result, appeal of the assessee is dismissed

ITA 102/JPR/2023[2018-19]Status: DisposedITAT Jaipur17 Jul 2023AY 2018-19

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Mahendra Gargieya (Adv.)For Respondent: Sh. Ajey Malik (CIT)

Section 143(3)Section 263Section 5

further required to prove the sources from which the creditors could have acquired the money deposited with him and, therefore the addition u/s 68 cannot be sustained in the absence of anything to establish that the sources of the creditors deposits flew from the appellant itself.” Thus, in view

Madan Mohan Mishra, Mumbai vs. ITO 10(3)(3), Mumbai

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

ITA 796/MUM/2023[2012-13]Status: DisposedITAT Mumbai14 Jul 2023AY 2012-13

Bench: Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T.A. No.796/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2012-13) Madan Mohan Mishra बिधम/ Income Tax Office- R. 80 Ttc, Industrial Area 10(3)(3) Vs. Midc, Rabal, Navi Aayakar Bhavan, Mumbai-4000701. Mumbai-400020. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aabpm3701B (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri S. L. Jain Revenue By: Shri Dharmvir D Yadav (Sr. Dr) सुनवाई की तारीख / Date Of Hearing: 26/06/2023 घोषणा की तारीख /Date Of Pronouncement: 14/07/2023 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. Cit(A)-17, Mumbai Dated 29.12.2017 For Ay. 2012-13. 2. The Main Grievance Of The Assessee Is Against The Action Of The Ld. Cit(A) Confirming The Addition Made U/S 68 Of The Income Tax Act, 1961 (Hereinafter “The Act’) Of Rs.22,70,610/- Which Assessee Claims To Be Agricultural Income & Disallowance Of Rs.36,967/- As Expenses. 3. Brief Facts As Noted By The Ao Is That The Assessee Had Filed Return Of Income Declaring Total Income At Rs.14,93,823/-. Later, The Case Of The Assessee Was Selected For Scrutiny & The Ao Noted That The Assessee Had Shown Agricultural Income Of Rs.38,01,400/- Which Was Claimed As Exempt Income. However, According To Ao, The Assessee Failed To Prove That He Had Earned Exempt/Agricultural Income

For Appellant: Shri S. L. JainFor Respondent: Shri Dharmvir D Yadav (Sr. DR)

Section 68

claim of earning 1/4th of Rs.99.14 Lakhs i.e. Rs.22,70,610/-. Therefore, the Ld. CIT(A) confirmed the action of the AO making addition u/s 68 of the Act of Rs.22,71,610/- and expenses disallowed of Rs.36,967/-. Aggrieved, the assessee is before this Tribunal

Uretek India Private Limited, New Delhi vs. ACIT Circle-27(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 8240/DEL/2019[2015-16]Status: DisposedITAT Delhi14 Jul 2023AY 2015-16

Bench: Shri Kul Bharat & Shri M.Balaganesh[Assessment Year : 2015-16] Uretek India Pvt.Ltd., Vs Acit, C/O-Rohit Malik & Associates, Circle-27(1), 1212A, Chiranjiv Tower, 43, New Delhi. Nehru Place, New Delhi-110019. Pan-Aaacu9168L Appellant Respondent Appellant By Dr. Rakesh Gupta, Adv. & Shri Somil Agarwal, Adv. Respondent By Shri Gurpreet Shah Singh, Sr.Dr Date Of Hearing 08.06.2023 Date Of Pronouncement 14.07.2023 Order

Section 143(1)Section 41(1)Section 68

same deserves to be deleted. c) That the Commissioner of Income Tax (Appeals) while correctly allowing the claim of the appellant that no addition u/s 68 could be made, on facts and in law went wrong in treating the said sum of Rs. 2,07,29,190/- as remission

ITO, Ward-2(2)(4), Surat vs. Shri Umesh P Bansal, Surat

In the result, ground No.1 raised by the Revenue in ITA

ITA 155/SRT/2020[2013-14]Status: DisposedITAT Surat14 Jul 2023AY 2013-14

Bench: Shri Pawan Singh, Hon'Ble & Dr. A. L. Saini, Hon'Ble Accountnat Member (Physical Hearing) Sl.

For Appellant: Shri Mehul Shah, CAFor Respondent: Shri Vinod Kumar, Sr. DR

Section 143(3)

Tribunal is just and proper. Consequently, this ground of appeal also does not merit, acceptance. Respectfully following above binding decision the impugned addition u/s 68 is held as bad in law. Shri Umeshkumar P. Bansal 9.2.3 In addition the above the AR also made-extensive submission on legal aspect

ITO, Ward-2(2)(4), Surat vs. Shri Umesh P Bansal, Surat

In the result, ground No.1 raised by the Revenue in ITA

ITA 154/SRT/2020[2012-13]Status: DisposedITAT Surat14 Jul 2023AY 2012-13

Bench: Shri Pawan Singh, Hon'Ble & Dr. A. L. Saini, Hon'Ble Accountnat Member (Physical Hearing) Sl.

For Appellant: Shri Mehul Shah, CAFor Respondent: Shri Vinod Kumar, Sr. DR

Section 143(3)

Umeshkumar P Bansal, Surat vs. ITO, Ward-2(2)(4), Surat

In the result, ground No.1 raised by the Revenue in ITA

ITA 146/SRT/2020[2013-14]Status: DisposedITAT Surat14 Jul 2023AY 2013-14

Bench: Shri Pawan Singh, Hon'Ble & Dr. A. L. Saini, Hon'Ble Accountnat Member (Physical Hearing) Sl.

For Appellant: Shri Mehul Shah, CAFor Respondent: Shri Vinod Kumar, Sr. DR

Section 143(3)

Umeshkumar P Bansal, Surat vs. ITO, Ward-2(2)(4), Surat

In the result, ground No.1 raised by the Revenue in ITA

ITA 145/SRT/2020[2012-13]Status: DisposedITAT Surat14 Jul 2023AY 2012-13

Bench: Shri Pawan Singh, Hon'Ble & Dr. A. L. Saini, Hon'Ble Accountnat Member (Physical Hearing) Sl.

For Appellant: Shri Mehul Shah, CAFor Respondent: Shri Vinod Kumar, Sr. DR

Section 143(3)

Nitin A. Shah, Mumbai vs. ITO, 19(2)(4), Mumbai

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

ITA 666/MUM/2023[2009-10]Status: DisposedITAT Mumbai12 Jul 2023AY 2009-10

Bench: Shri Pavan Kumar Gadalenitin A. Shah Ito,19(2)(4) 31/32, 8Th Floor, 217, Matru Mandir, बनाम/ Giriraj Apartment, Tardeo, Grant Road, Vs. Teen Batti, Mumbai –400007. Walkeshwar, Mumbai-400006 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aahps3826K (""थ" / Respondent) (अपीलाथ" /Appellant)

For Appellant: Mr. Suchek Anchaliya & Mr.TusharFor Respondent: Ms.Kavita Kaushik.DR

Section 143(2)Section 153CSection 250Section 68

before the Hon’ble Tribunal. 7. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the addition u/s 68 of the Act irrespective of the fact that the assessee has filed the details in respect of the loan and submitted the confirmation ... Heard the rival submissions and perused the material on record. The Ld. AR submitted that the CIT(A) has erred in sustaining the addition u/s 68 of the Act of unsecured loan though the assesses has filed the requisite details before the lower authorities. On perusal of the assessment order

The ACIT (Central), Ujjain vs. M/S. Digiana Projects (P) Ltd., Indore

Appeal are allowed for statistical purposes as mentioned above

ITA 902/IND/2019[2016-17]Status: DisposedITAT Indore12 Jul 2023AY 2016-17

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2016-17 Acit (Central), M/S. Digiana Ujjain Projects Private Limited, बनाम/ M-3, Sapna Chamber, 12/1, South Tukoganj, Indore Vs. (Revenue / Appellant) (Assessee / Respondent) Pan: Aadcd5465A Assessee By Shri Sudhir Padliya, Ca Revenue By Shri P.K.Mishra, Cit Dr Date Of Hearing 05.07.2023 Date Of Pronouncement 12.07.2023

Section 143(3)Section 68Section 69C

total income of Rs. 86,61,933/- which was subjected to scrutiny wherein the AO made two additions, namely (i) addition u/s 68 of Rs. 6,92,03,500/- on account of unexplained unsecured loans, and (ii) addition u/s 69C of Rs. 30,00,000/- on account of unexplained expenditure

DCIT, CC- 28, New Delhi vs. Saarthak Vanijya India Ltd., Kolkata

ITA 3822/DEL/2017[2007-08]Status: DisposedITAT Delhi11 Jul 2023AY 2007-08

Bench: Shamim Yahya & Shri Anubhav Sharmaआ.अ.संसंसंसं/.I.T.A No.3822/Del/2017 िनधा"रणवष" िनधा"रणवष"/Assessment Year: 2007-08 िनधा"रणवष" िनधा"रणवष"

Section 148Section 68

which were also made part of the assessment order as exhibits. Still he preferred to rely the retracted statement to make the addition u/s 68 of the Act. 11. The Bench is of the considered opinion that Ld. AO had fallen in error in relying the retracted statement of Shri

Assistant Commissioner of Income Tax, Circle 1(1), Raipur vs. M/S R.R. Industrial Corporation (India) Private Limited, Raipur

ITA 144/RPR/2018[2013-14]Status: DisposedITAT Raipur11 Jul 2023AY 2013-14

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No. 144/Rpr/2018 "नधा"रण वष" / Assessment Year : 2013-14 The Assistant Commissioner Of Income Tax-1(1), Raipur (C.G.) .......अपीलाथ" / Appellant बनाम / V/S. M/S. R.R. Industrial Corporation (India) Pvt. Ltd., Station Road, Telghani Naka, Raipur (C.G.) Pan : Aaecr4291B ……""यथ" / Respondent

For Appellant: Shri Amit M. Jain, AdvocateFor Respondent: Smt. Ila M. Parmar, CIT-DR

Section 143(2)Section 143(3)Section 250(4)Section 68

Raipur Vs. M/s. R. R. Industrial Corporation (India) Pvt. Ltd. price than their real worth. As the AO did not make any addition u/s 68 of the Act, therefore, the CIT exercised his revisional jurisdiction u/s 263 of the Act, and directed the AO to frame fresh assessment after carrying

Sushil Kumar Agrawal, Korba vs. Deputy Commmissioner of Income Tax, Circle, Korba

In the result, appeal of the assessee is partly allowed for statistical purposes in terms of our aforesaid observations

ITA 148/RPR/2018[2012-13]Status: DisposedITAT Raipur10 Jul 2023AY 2012-13

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं./Ita No.148/Rpr/2018 "नधा"रण वष" / Assessment Year : 2012-13 Shri Sushil Kumar Agrawal, Prop. Of M/S. Shrikishan & Co., Darri Road, Korba (C.G.) Pan : Acgpa4350B .......अपीलाथ" / Appellant बनाम / V/S. The Deputy Commissioner Of Income Tax Circle-Korba (C.G.) ……""यथ" / Respondent

For Appellant: Shri Y.K Mishra, AdvocateFor Respondent: Shri Choudhary N.C. Roy, Sr. DR

Section 143(1)Section 143(2)Section 143(3)Section 40Section 68

assessee to both the lenders) u/s.68 of the Act. Thus, the A.O on the basis of his aforesaid deliberations made an addition u/s 68 of the Act of an amount aggregating to Rs.14,65,920/- [Rs.12,00,000/- (+) Rs.2,65,920/-]. 12. On appeal, it was observed

Classic Display Systems Pvt. Ltd., New Delhi vs. ITO Ward 6(2), New Delhi

In the result, appeal of the assessee is partly allowed on legal ground

ITA 5301/DEL/2019[2004-05]Status: DisposedITAT Delhi07 Jul 2023AY 2004-05

Bench: Shri C.M. Gargclassic Display Systems Pvt. Ltd, Vs. Ito, S-179/B, Panchsheel Park, Ward-(2), New Delhi New Delhi (Appellant) (Respondent) Pan:Aaccc2109D Assessee By : Sh. Salil Kapoor, Adv Sh. Amarbir Singh Walia, Ca Revenue By: Sh. Om Parkash, Sr. Dr Date Of Hearing 09/05/2023 Date Of Pronouncement 07/07/2023

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Sh. Om Parkash, Sr. DR

Section 143(2)Section 143(3)Section 147Section 148Section 292BSection 68

Officer in making following addition to the returned income is unjust, illegal, arbitrary and against the facts and circumstances of the case:- a. Addition U/s 68 o f the I.T. Act 1961 Rs. 20,00,000/-.” 3. The ld counsel of the assessee, pressing into service legal ground

ITO, Ward- 16(1), New Delhi vs. Mahadev Dairy Pvt. Ltd., New Delhi

In the result, the appeal of the revenue is partly allowed

ITA 4380/DEL/2018[2012-13]Status: DisposedITAT Delhi07 Jul 2023AY 2012-13

Bench: Sh. N. K. Billaiya & Ms. Astha Chandraassessment Year: 2017-18 Ito Mahadev Dairy Pvt. Ltd. Ward- 16 (1) Vs C-16, 101 First Floor, New Delhi Gurunanak Pura, Laxmi Nagar, Delhi -110092 Pan No.Aahcm1300K (Appellant) (Respondent)

Section 133(6)Section 250(4)Section 36(1)Section 68

Whether on the facts and circumstances of the case, the Ld. C1T(A) is legally justified in deleting addition u/s 68 of the Act by holding that creditworthiness of investors was proved by mere production of papers relating to identity of investors, copies of bank statement and use of banking

Raj Chetankumar Bhajiyawala, Surat vs. Income Tax Officer, Ward-1(2)(1), Surat

In the result grounds of appeal raised by the assessee are allowed

ITA 290/SRT/2023[2017-18]Status: DisposedITAT Surat03 Jul 2023AY 2017-18

Bench: Shri Pawan Singh(Virtual Hearing) Raj Chetankumar Bhajiyawala, I.T.O., 2/4475, Shivdas Zaveri Ni Sheri, Ward-1(2)(1), Vs. Sangrampura, Surat-395002. Surat. Pan No. Bhspb 5211 J Appellant/ Assessee Respondent/ Revenue

Section 115BSection 254(1)Section 68

please be deleted. 2. The ld. CIT(A) did not consider the facts that the AO did not bring on record for making addition u/s 68 of the Act. Entire addition had been made on the basis of probability only and still CIT(Appeals) confirmed the addition upto

DCIT, CC-2(2), Mum vs. Shri Narendra S Shah, Mumbai

ITA 2566/MUM/2022[2013-14]Status: DisposedITAT Mumbai30 Jun 2023AY 2013-14

Bench: Shri Vikas Awasthy () & Shri Om Prakash Kant ()

For Appellant: Karan JainFor Respondent: Kamble Minal Mohan

Section 143(3)Section 147Section 271(1)(c)Section 40

ITAT) The he ITAT ITAT in in its its order order dated 06/08/2015 in ITA No. 6904/Mum/2012restored the issue restored the issue of addition u/s 68 of the Act of addition u/s 68 of the Act alongwith other addition alongwith other addition back to the Assessing Officer for deciding back