“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

Shri Gurbinder Singh Mahal, Amritsar vs. Income Tax Officer Ward-IV ( 2), Amritsar

In the result, the appeal of the assessee bearing ITA No

ITA 22/ASR/2023[2014-15]Status: DisposedITAT Amritsar24 Apr 2023AY 2014-15

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

Section 144Section 144oSection 250(4)Section 250(6)Section 250o

against amount of cashdeposit into bank should be given” 7.5) IN THE HIGH COURT OF DELHI ITA NO 315/2005 JAYA AGGARWAL VS ITO “Addition u/s 68 for cash withdrawn and cash deposited - Assessee withdrew Rs.2 lakhs to buy immovable property in cash from bank account and re-deposited cash ... from the amount withdrawn after more than 7 months as the deal could not be finalized. HC held that addition u/s 68 of amount re-deposited was unjustified, noting that one should not consider and reject an explanation as concocted and contrived by applying the prudent man's behavior test

M/S. J S Realty Pvt. Ltd., Mumbai vs. ITO, Ward-12(3)(1), Mumbai

Accordingly, Ground No. 4 to 9 pertaining to the merits of the matter are dismissed as being infructuous

ITA 2097/MUM/2022[2012-13]Status: DisposedITAT Mumbai21 Apr 2023AY 2012-13

For Appellant: Shri S L JainFor Respondent: Ms. Vranda U Matkarni

Section 133(6)Section 143(3)Section 147Section 148Section 151Section 68

facts and hence, bad in law, leading to notice u/s 148 to be invalid. 4. Ld. CIT (A) erred in confirming addition u/s 68 of Rs 6,07,00,000 based on the fact that appellant failed produce the directors of the Companies although notices u/s 133(6) could ... should not be a basis of addition, ignoring documentary evidences produced justify existence of the shareholders. 5. Ld. CIT (A) erred in confirming addition u/s 68 for non- furnishing relevant documents in appellate proceeding, without appreciating evidences furnished in assessment proceedings as well as appellate proceeding such as confirmation, bank

Bholaram Malviya, Mumbai vs. Income Tax Officer W-16(1)|(1), Mumbai

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

ITA 5965/MUM/2019[2013-14]Status: DisposedITAT Mumbai21 Apr 2023AY 2013-14

For Appellant: Shri Neeraj ManglaFor Respondent: Smt. Vranda U. Matkari (sr. AR)

been accepted by AO in his remand report found placed at page 171 PB. And therefore it has to be deleted and no addition u/s 68 of the Act could have been legally made in the relevant assessment year i.e. AY. 2013-14, so we clarify this aspect and direct

Gopal Krishna S Revankar, Mumbai vs. Assistant Commissioner of Income Tax - Circle 19(2) (Now Assistant Commissioner of Income Tax 22(3)), Mumbai

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

ITA 1164/MUM/2018[2002-03]Status: DisposedITAT Mumbai21 Apr 2023AY 2002-03

Bench: Shri Aby T. Varkey, Jm & Shri Om Prakash Kant, Am आयकर अपील सं/ I.T.A. No. 1164/Mum/2018 (निर्धारण वर्ा / Assessment Year: 2002-03) Gopal Krishna S. Revankar बिधम/ Acit, Circle-19(2) (Now Lotus House, Off Andheri- Acit-22(3) Vs. Kurla Road, Sakinaka, Piramal Chambers, Andheri (E), Mumbai- Lalbaugh, Mumbai. 400072. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaapr4742C (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Mitesh Mehta Revenue By: Shri Sanjeev Ranjan (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 24/01/2023 घोषणा की तारीख /Date Of Pronouncement: 21/04/2023 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)-34, Mumbai Dated 21.12.2017 For Assessment Year 2002-03. 2. The Grounds Of Appeal Raised By The Assessee Are As Under: - “1. The Learned Cit(A) Erred In Not Realizing The Fact That The Appellant Has Already Added Rs. 10,43,700/- To Its Total Income After Considering Rs.7,65,000/- From Meenakshi Bhavan & Other Receipts In The Rough Cash Book & Loose Papers Found During The Survey Action On The Assessee On 28.2.2002. 2. The Learned Cit (A) Erred In Making Addition Of Rs. 7,70,536/- On Account Of Unexplained Cash Found During The Survey. This Amounts To Taxing The Same Amount Twice. 3. The Learned Cit(A) Erred In Making Addition Of Rs. 7,65,000/- On Account Of Unaccounted Receipts From Meenakshi Bhavan Resulting Into Taxing The Same Income Three Times.

For Appellant: Shri Mitesh MehtaFor Respondent: Shri Sanjeev Ranjan (Sr. AR)

Section 133A

based on incriminating materials found during survey dated 28.02.2002 stands settled for those assessment years which are as under: - Sr. A.Y Addition u/s 68 of the Act No. 1 1996-97 LTCG Rs.2,88,451/- 2 1998-99 Rs. 5 Lakhs on account of money Rs.57,108/- unexplained cash received

ITO, Ward-1(1)(3), Surat vs. M/S. Hi-Choice Processors P. Ltd, Surat

In the result, appeal filed by the Revenue is dismissed

ITA 98/SRT/2020[2012-13]Status: DisposedITAT Surat18 Apr 2023AY 2012-13

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.98/Srt/2020 "नधा"रण वष"/Assessment Year: (2012-13) (Physical Hearing) Income Tax Officer, M/S. Hi-Choice Processors Pvt. Ward-1(1)(3), Room No.113, Vs. Ltd., 264, Gidc, Sachin, Surat- Aaykar Bhavan, Majura Gate, Surat- 394230. 395002 (""थ" /Respondent) (अपीलाथ" /Appellant) "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaach7062E िनधा"रती की ओर से /Appellant By Shri Ashok B. Koli, Cit(Dr) राज"व क" ओर से /Respondent By Shri Mehul Shah, Ca सुनवाई की तारीख/Date Of Hearing 31/03/2023 घोषणा की तारीख/Date Of Pronouncement 18/04/2023

Section 142(1)Section 143(2)Section 143(3)Section 37(1)Section 68

assessee had also taken loan in the past which was always accepted during scrutiny assessment of earlier years. The Assessing Officer has made addition u/s 68 of the Act because he has doubted the creditworthiness of the certain Pvt. Ltd. companies from whom assessee has taken loans. However

Abhik Finance Pvt. Ltd., Haryana vs. ACIT, Circle-1(1), New Delhi

In the result, the appeal of the assessee is dismissed

ITA 303/DEL/2020[2016-17]Status: DisposedITAT Delhi17 Apr 2023AY 2016-17

Bench: Shri Kul Bharat & Shri M Balaganesh[Assessment Year : 2016-17] Abhik Finance Pvt.Ltd., Vs Acit, 2/3-A, Aravali View, Rail Circle-1(1), Vihar, Sector-56, Gurgaon, New Delhi. Haryana-122002. Pan-Aabca8567A Appellant Respondent Appellant By None Respondent By Shri P Praveen Sidharth, Cit Dr Date Of Hearing 11.04.2023 Date Of Pronouncement 17.04.2023

Section 10(38)Section 143(3)Section 68

from the Directors of INR 13,93,70,000/-. The assessee could not satisfactorily explain the source of such capital and he made addition u/s 68 of the Act. 5. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, sustained the addition and dismissed

DCIT, Circle, Bhilwara vs. Shri Prahalad Rai Rathi, Bhilwara

In the result, the appeal of the Revenue is dismissed

ITA 282/JODH/2018[2015-16]Status: DisposedITAT Jodhpur13 Apr 2023AY 2015-16

Bench: Shri B. R. Baskaran & Dr. S. Seethalakshmithe Dcit Vs Shri Prahalad Rai Rathi Circle Prop: M/S.Kedar Mal Radhey Shyam, Bhiwlara Sadar Bazar, Gulabpura, Bhilwara (Appellant) (Respondent) Pan No. Adxpr 0949 R

Section 68Section 69C

parties from whom loan of Rs. 3.09/3.17 Crore was taken to make payment to India Nivesh. Since the AO has made the addition u/s 68, the fulfillment of the 3 conditions are to be satisfied, the onus of which lay upon the assessee. The assessee did discharge ... 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 10 DCIT-CIRCLE, BHILWARA VS SHRI PRAHALAD RAI RATHI, BHILWARA be sustained in the absence of anything to establish that the sources of the creditors

Shri Bharat Arora, Punjab vs. Deputy Commissioner of Income Tax, Central Circle-II, Jalandhar

In the result, the Ground no

ITA 309/ASR/2018[2008-09]Status: DisposedITAT Amritsar13 Apr 2023AY 2008-09

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

Section 139Section 143(3)Section 147Section 148Section 250Section 68Section 69

case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition u/s 68 of the Act without considering the submissions of the assessee and without complying with the mandatory conditions u/s 68 as envisaged under the Income

Hylink Overseas Pvt Ltd, New Delhi vs. DCIT Circle-11(2), New Delhi

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

ITA 2819/DEL/2019[2014-15]Status: DisposedITAT Delhi12 Apr 2023AY 2014-15

Section 115BSection 68

hands of the assessee company. The Ld. AO did not heed to the aforesaid contentions and proceeded to make an addition u/s 68 of the Act as Page 4 of 6 Hylink Overseas Pvt. Ltd. vs. DCIT unexplained cash credit. This action of the Ld. AO was upheld

Shri Raj Kumar ( M/S Radhika Sales Corp ), Amritsar vs. Income Tax Officer Ward- 3 (3), Amritsar

In the result, the appeal of the assessee bearing ITA No

ITA 195/ASR/2022[2017-18]Status: DisposedITAT Amritsar11 Apr 2023AY 2017-18

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

Section 143(3)Section 145(3)Section 250oSection 68

taxation. 10. That the CIT(A) NFAS has erred in confirming the order of the AO ignoring the position of law that no addition u/s 68 can be made where books of account had been rejected by the AO u/s 145(3) and again relying upon the same books ... That the CIT(A) NFAS has erred in confirming the order of the AO ignoring No 10 the position of law that no addition u/s 68 can be made where books of account had been rejected by the AO u/s 145(3) and again relying upon the same books

Vkm Logistics P.Ltd, New Delhi vs. ITO, Ward-26(4), New Delhi

In the result, appeal of the assessee is dismissed

ITA 7457/DEL/2019[2015-16]Status: DisposedITAT Delhi11 Apr 2023AY 2015-16

Bench: Shri G.S. Pannu, Hon’Ble & Shri Challa Nagendra Prasadआ.अ.सं/.I.T.A No.7457/Del/2019 िनधा"रणवष"/Assessment Year: 2015-16 बनाम Vkm Logistics P. Ltd., Ito 611, Pragati Tower, Vs. Ward 26(4) Rajinder Place, New Delhi. New Delhi. Pan No. Aakcs4517M अपीलाथ" Appellant ""यथ"/Respondent

Section 131Section 142(1)Section 143(2)Section 144Section 271(1)(b)Section 68

Appeals) has erred in law and in fact that all the Trade payable are having the Name, Address, PAN No., and hence the addition u/s 68 cannot be made assessee has discharged his onus of proof. 3. Purchases made from the trade payable has been accepted by the AO, thus ... additions made by the Assessing Officer in respect of difference in receipts as per ITR and as per 26-AS and also the addition u/s 68 of the Act in respect of trade creditors. The grounds raised by the assessee are dismissed. 6. In the result, appeal of the assessee

ITO, Ward-1, Pali vs. Shri Manish Pjain, Pali

In the result, the appeal of the Department is dismissed

ITA 187/JODH/2019[2013-14]Status: DisposedITAT Jodhpur05 Apr 2023AY 2013-14

Bench: Shri B. R. Baskaran & Dr. S. Seethalakshmithe Ito Vs Shri Manish P Jain Ward-1, 201, Landmark Society Pali J.P. Road, Andheri West, Mumbai-400058 (Appellant) (Respondent) Pan No. Ajcpj 5271 F

Section 68

examined/ verified the evidences furnished by the appellant, and submitted that nothing has been noticed adversely by him. The AO made the addition u/s 68 of the act on the basis that the identity and creditworthiness of the creditors and genuineness of transaction had not been proved during the assessment

Acpl Design Pvt. Ltd., New Delhi vs. ITO, Ward- 1(1), New Delhi

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

ITA 4974/DEL/2018[2014-15]Status: DisposedITAT Delhi05 Apr 2023AY 2014-15

Bench: Shri C.M. Garg & Dr. B.R.R. Kumarassessment Year: 2014-15 Acpl Design Pvt. Ltd., Vs. Ito, J-103, Ground Floor, Ward-1(1), South Extension-1, New Delhi. New Delhi – 110 049. Pan: Aahca5958K (Appellant) (Respondent) Assessee By : Shri Manoj Kumar, Ca Revenue By : Shri Kanav Bali, Sr. Dr Date Of Hearing : 13.02.2023 Date Of Pronouncement : 05.04.2023 Order Per C.M. Garg, Jm: This Appeal Filed By The Assessee Is Directed Against The Order Dated 09.05.2018 Of The Cit(A)-1, New Delhi, Relating To Assessment Year 2014-15. 2. The Ld. Assessee’S Representative Submitted That The Assessee Does Not Want To Press Legal Grounds No.1, 2 & 3. Therefore, The Same Are Dismissed As ‘Not Pressed. The Remaining Effective Grounds No.4 & 5 Read As Follows:- “4. That The Cit(A) Has Erred In Law & On Facts In Sustaining The Addition U/S 68 Of Rs.25,73,000.00 On Account Of Unsecured Loan Made By Ao On Untenable & Illegal Grounds. Hence The Addition As Such May Be Deleted. 5. That The Cit(A) Has Erred In Law & On Facts In Sustaining The Addition Of Rs.6,52,362.00 On Account Of Foreign Travel Expense Made By Ao On Untenable & Illegal Grounds. Hence The Addition As Such May Be Deleted.”

For Appellant: Shri Manoj Kumar, CAFor Respondent: Shri Kanav Bali, Sr. DR

Section 131Section 133(6)Section 68

effective grounds No.4 and 5 read as follows:- “4. That the CIT(A) has erred in law and on facts in sustaining the addition u/s 68 of Rs.25,73,000.00 on account of unsecured loan made by AO on untenable and illegal grounds. Hence the addition as such

Sh. Amit Tyagi, Ghaziabad vs. DCIT, Ghaziabad

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

ITA 757/DEL/2017[2010-11]Status: DisposedITAT Delhi05 Apr 2023AY 2010-11

For Appellant: Shri P.C. Yadav, Advocate &For Respondent: Shri Kanav Bali, Sr. DR

Section 131Section 68

case of CIT vs. Kapoor Chand Mangesh Chand (2013) 38 taxmann.com 239 (Allahabad), the ld. Counsel submitted that in a case of addition u/s 68 of the Act on account of cash credit, the burden of proof lay on the assessee has to be held as discharged when the assessee

Shri Ashnuth Goyal, Jaipur vs. ACIT, Ward -1(3), Jaipur

In the result, the appeal of the assessee is allowed

ITA 276/JPR/2020[2015-16]Status: DisposedITAT Jaipur03 Apr 2023AY 2015-16

Bench: Him. Thus, The Addition Of Rs. 30,04,864/- So Uphold Deserves To Be Deleted. Shri Ashnuth Goyal Vs Acit, Ward 1(3), Jaipur

For Appellant: Shri Manish Agarwal, CAFor Respondent: Smt. Monisha Choudhary, JCIT

Section 10(38)Section 68

Details and information sought by AO were furnished and assessment was completed u/s 143(3) of the Act after making addition u/s 68 to the tune of Rs.30,04,864/- by treating the long term capital gain [claimed exempt u/s 10(38)] as accommodation entry and thus bogus, and further ... obtaining such accommodation entry. The relevant para of AO at 3.2.1. making total addition of Rs.3004864+180292 = 3185156/- is reproduced as under:- ‘’3.2.1 Addition u/s 68:- Thus in view of the elaborate discussion made above, I hereby hold the amount of Rs.3004864/- introduced / credited by the assessee out of these

Shri Arnav Goyal, Jaipur vs. ITO, Ward-2(4), Jaipur

In the result, the appeal of the assessee is allowed

ITA 275/JPR/2020[2015-16]Status: DisposedITAT Jaipur03 Apr 2023AY 2015-16

Bench: Hon’ble SHRI SANDEEP GOSAIN (Judicial Member)

For Appellant: Shri Manish Agarwal, CAFor Respondent: Shri Chandra Prakash Meena,Addl.CIT

Section 10(38)Section 68

Details and information sought by AO were furnished and assessment was completed u/s 143(3) of the Act after making addition u/s 68 to the tune of Rs.31,70,080/- by treating the long term capital gain [claimed exempt u/s 10(38)] as accommodation entry and thus bogus, and further ... Apex court delivered in the case of CIT vs. NRA Iron and Steel Pvt. Ltd. by stating that decision provides guidelines for additions u/s 68 of the Act and has then summarised principles laid down by Hon’ble Apex Court. From perusal of decision, it is apparent that the facts

Agrawal Infrabuild Private Limited, Raipur vs. Assistant Commissioner of Income Tax, Central Circle-II, Raipur

In the result, both appeals of the assessee are allowed

ITA 11/RPR/2020[2014-15]Status: DisposedITAT Raipur30 Mar 2023AY 2014-15

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अऩीऱ सं./Ita Nos.10 & 11/Rpr/2020 (ननधाारण वषा / Assessment Year :2013-2014 & 2014-2015) Agrawal Infrabuild Private Limited, Vs Acit, Central Circle-Ii, Raipur 1St Floor, V.R.Plaza, Bilaspur Pan No. :Aafca 6636 C (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Appellant: Shri Sumit Nema & Gagan Tiwari, AdvsFor Respondent: Shri Debashish Lahiri, CIT-DR

Section 153A(1)Section 68

constituents are required to be cumulatively satisfied. If one or more of them is absent, then the AO can make the additions u/s 68 of the Act as an income. The fact remains that the appellant is private limited company, for which the onus as required u/s 68 ... investors - Merely filing PAN, IT returns, Certification of incorporation, Balance Sheet etc. do not establish the identity of subscribers or produce them - Addition u/s. 68 shall be made. Agrawal Coal Corporation P. Ltd. v. Addl. :CIT (2011) 18ITJ 717 (Trib. - Indore

Agrawal Infrabuild Private Limited, Raipur vs. Assistant Commissioner of Income Tax, Central Circle-II, Raipur

In the result, both appeals of the assessee are allowed

ITA 10/RPR/2020[2013-14]Status: DisposedITAT Raipur30 Mar 2023AY 2013-14

For Appellant: Shri Sumit Nema & Gagan Tiwari, AdvsFor Respondent: Shri Debashish Lahiri, CIT-DR

Section 153A(1)Section 68

Assistant Commissioner of Income Tax, Circle 2(1), Bhilai vs. Mesers Abis Poultry Private Limited, Rajnandgaon

In the result, both appeals of the revenue are dismissed

ITA 234/RPR/2019[2011-12]Status: DisposedITAT Raipur30 Mar 2023AY 2011-12

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अऩीऱ सं./Ita No.233 & 234/Rpr/2019 (ननधाारण वषा / Assessment Year :2009-2010 & 2011-2012) Acit-2(1), Bhilai Vs M/S Abis Poultry Private Limited, Baldeo Bag, Rajnandgaon Pan No. :Aaeca 87411 E (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Appellant: Shri Amit M. Jain & Gagan Tiwari, Advs. &For Respondent: Shri Debashish Lahiri, CIT-DR

Section 132Section 153CSection 68

submitted all these fact before the A.O. as discussed supra, however the A.O. without considering the fact properly passed the order by making addition u/s 68. These events clearly reflect that the AO has not appreciated the facts of the case in proper manner and has tried to mislead ... rival contentions, perused the material available on records and judicial pronouncements relied upon. 15. In the present case, the issue with respect to addition u/s 68 is decided on the basis of 3 factors: 1. Identity of the share applicant, 2. Creditworthiness of the share applicant, and 3. Genuineness

Assistant Commissioner of Income Tax, Circle 2(1), Bhilai vs. Mesers Abis Poultry Private Limited, Rajnandgaon

In the result, both appeals of the revenue are dismissed

ITA 233/RPR/2019[2009-10]Status: DisposedITAT Raipur30 Mar 2023AY 2009-10

For Appellant: Shri Amit M. Jain & Gagan Tiwari, Advs. &For Respondent: Shri Debashish Lahiri, CIT-DR

Section 132Section 153CSection 68