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“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
79
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
77
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
57
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
47
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

ACIT Central Circle-26(2), New Delhi vs. Viraj Exports Pvt. Ltd, New Delhi

In the result, the appeal of the revenue is dismissed

ITA 3026/DEL/2019[2013-14]Status: DisposedITAT Delhi31 Jan 2023AY 2013-14

Bench: Sh. N. K. Choudhrydr. B. R. R. Kumarita No. 2704/Del/2019 : Asstt. Year : 2013-14 Viraj Exports Pvt. Ltd., Vs Dcit, 7/8, Roop Nagar, Central Circle-26(1), New Delhi-110007 New Delhi-110002 (Appellant) (Respondent) Pan No. Aabcv3062D

For Appellant: Sh. Tanpreet Kohli, CAFor Respondent: Sh. S. L. Verma, Sr. DR
Section 133(6)Section 250Section 68

Circular No. 22/2015 dated 17.12.2015. 5 On the facts and circumstances of the case the Ld. CIT(A) erred in deleting the addition u/s 68 of the Rs. 72,00,000/- made by the AO without appreciating that the assessee failed to establish the creditworthiness of M/s. Shelter Advisory

Viraj Exports Pvt. Ltd, New Delhi vs. DCIT Central Circle-26(1), New Delhi

In the result, the appeal of the revenue is dismissed

ITA 2704/DEL/2019[2013-14]Status: DisposedITAT Delhi31 Jan 2023AY 2013-14

Bench: Sh. N. K. Choudhrydr. B. R. R. Kumarita No. 2704/Del/2019 : Asstt. Year : 2013-14 Viraj Exports Pvt. Ltd., Vs Dcit, 7/8, Roop Nagar, Central Circle-26(1), New Delhi-110007 New Delhi-110002 (Appellant) (Respondent) Pan No. Aabcv3062D

For Appellant: Sh. Tanpreet Kohli, CAFor Respondent: Sh. S. L. Verma, Sr. DR
Section 133(6)Section 250Section 68

Circular No. 22/2015 dated 17.12.2015. 5 On the facts and circumstances of the case the Ld. CIT(A) erred in deleting the addition u/s 68 of the Rs. 72,00,000/- made by the AO without appreciating that the assessee failed to establish the creditworthiness of M/s. Shelter Advisory

The ACIT, Central-1, Indore vs. M/S Prakash Oils Ltd., Dhar

In the result, the above captioned appeals filed by the Revenue as well as the

ITA 235/IND/2021[2011-12]Status: DisposedITAT Indore30 Jan 2023AY 2011-12

Bench: Shri C.M. Garg & Shri Bhagirath Mal Biyani

For Appellant: Shri Ajay Tulsian, CA &For Respondent: Shri P.K. Mishra, CIT, DR
Section 147

rendered a very important finding of fact that the money emanated from the assessee itself came back to the assessee, therefore, the addition u/s 68 of the Act was not found to be sustainable by the ld.CIT(A). The ld. AR also drew our attention to the relevant part ... justified. 4.1.2 After taking into consideration the observation of the AO and the written submissions of the appellant it is seen that the addition u/s 68 has been made solely for the reason that both the share applicants i.e. M/s Malwa Trexim Pvt. Ltd. and M/s Ahilya Trading

The Addl. CIT Range -1, Indore vs. M/S Prakash Oils Ltd., Dhar

In the result, the above captioned appeals filed by the Revenue as well as the

ITA 227/IND/2021[2015-16]Status: DisposedITAT Indore30 Jan 2023AY 2015-16

Bench: Shri C.M. Garg & Shri Bhagirath Mal Biyani

For Appellant: Shri Ajay Tulsian, CA &For Respondent: Shri P.K. Mishra, CIT, DR
Section 147

rendered a very important finding of fact that the money emanated from the assessee itself came back to the assessee, therefore, the addition u/s 68 of the Act was not found to be sustainable by the ld.CIT(A). The ld. AR also drew our attention to the relevant part ... justified. 4.1.2 After taking into consideration the observation of the AO and the written submissions of the appellant it is seen that the addition u/s 68 has been made solely for the reason that both the share applicants i.e. M/s Malwa Trexim Pvt. Ltd. and M/s Ahilya Trading

The ACIT, Central-1, Indore vs. M/S Prakash Oils Ltd., Dhar

In the result, the above captioned appeals filed by the Revenue as well as the

ITA 226/IND/2021[2012-2013]Status: DisposedITAT Indore30 Jan 2023AY 2012-2013

Bench: Shri C.M. Garg & Shri Bhagirath Mal Biyani

For Appellant: Shri Ajay Tulsian, CA &For Respondent: Shri P.K. Mishra, CIT, DR
Section 147

rendered a very important finding of fact that the money emanated from the assessee itself came back to the assessee, therefore, the addition u/s 68 of the Act was not found to be sustainable by the ld.CIT(A). The ld. AR also drew our attention to the relevant part ... justified. 4.1.2 After taking into consideration the observation of the AO and the written submissions of the appellant it is seen that the addition u/s 68 has been made solely for the reason that both the share applicants i.e. M/s Malwa Trexim Pvt. Ltd. and M/s Ahilya Trading

Tyhe ITO-4(5), Indore vs. M/S. Urvashi World Wide P. Ltd., Indore

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

ITA 569/IND/2019[2012-13]Status: DisposedITAT Indore30 Jan 2023AY 2012-13

Bench: Shri C.M. Garg & Shri Bhagirath Mal Biyaniassessment Year: 2012-13

For Appellant: Shri .P.D. Nagar, CAFor Respondent: Shri P.K. Mishra, CIT, DR
Section 131(1)Section 143(3)Section 68

loans and advances and notice u/s 131(1) of the Act was also not complied. Therefore, the AO was right in making the addition u/s 68 of the Act. Regarding Swastik World-wide Pvt. Ltd., the ld.CIT-DR submitted that the assessee failed to establish the identity and credit worthiness ... reiterated the written submissions filed on behalf of the assessee before this Bench which are as follows:- “Submissions A) Unsecured loans - Addition u/s 68 of the Act => The appellant had accepted unsecured loans during the year at Rs. 11.67 crores whereas the AO assessed an amount of Rs. 18.92 crores

Surajmukhi Sharma, New Delhi vs. ITO Ward - 56(4), New Delhi

The appeal is allowed for statistical purposes

ITA 8909/DEL/2019[2014-15]Status: DisposedITAT Delhi23 Jan 2023AY 2014-15

Bench: Sh. N.K.Billaiya & Sh. Anubhav Sharmaita No.8909/Del/2019, A.Y. 2014-15

Section 10(38)Section 115Section 143(2)Section 143(3)Section 68

consideration the modus operandi and held the long term capital gain claim of assessee to be outcome of accommodation entries and made the addition u/s 68 of the Act and further invoking section 115 BBE of the Act. 2.1 Ld. CIT(A) confirmed the same, therefore, assessee is in appeal ... return of income of the assessee with the claim of not maintaining books of accounts, then no addition can be made an addition u/s 68 of the Act. In this context special reference was made to a co-ordinate Bench judgment in ITA No. 5430/Del/2011, Smt. Babbal Bhatia

Retina Forum, Delhi vs. CIT Exemption, Delhi

The appeal of the assessee is partly allowed for statistical purposes

ITA 1050/DEL/2022[-]Status: DisposedITAT Delhi20 Jan 2023

Bench: Shri R.S. Syal & Smt Suchitra Kamble

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

tune of Rs.81,360/-, out of the Opening Stock of Rs.1,07,000/-. 2. Whether the Ld.CIT(A) was justified by upholding the addition u/s 68 of Rs.11,50,000/- loan taken from the director, just because onfnon availability of few documents on record as regards creditworthiness although the same

Retina Forum, Delhi vs. CIT Exemption, Delhi

The appeal of the assessee is partly allowed for statistical purposes

ITA 1049/DEL/2022[-]Status: DisposedITAT Delhi20 Jan 2023

Bench: Shri R.S. Syal & Smt Suchitra Kamble

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

tune of Rs.81,360/-, out of the Opening Stock of Rs.1,07,000/-. 2. Whether the Ld.CIT(A) was justified by upholding the addition u/s 68 of Rs.11,50,000/- loan taken from the director, just because onfnon availability of few documents on record as regards creditworthiness although the same

Punyah Building Materials Pvt. Ltd., Faridabad vs. ITO Ward 2(1), Faridabad

In the result, the appeal of the assessee is allowed

ITA 6171/DEL/2019[2015-16]Status: DisposedITAT Delhi19 Jan 2023AY 2015-16

Bench: Dr. B. R. R. Kumar & Sh. Yogesh Kumar U.S.

Section 143(1)Section 143(3)Section 251Section 56(2)(viib)Section 68

companies account. The Ld. A.O. was of the opinion that the genuineness of the transactions remains highly suspicious and after enquiry, made the addition u/s 68 of the Company holding that the investors companies are bogus and accordingly the share capital of Rs. 94,00,000/- has been treated

DCIT, New Delhi vs. M/S. Ramji Lal Investments Pvt. Ltd., New Delhi

In the result, appeal filed by the Revenue is dismissed

ITA 3538/DEL/2017[2013-14]Status: DisposedITAT Delhi19 Jan 2023AY 2013-14

Bench: Dr. B. R. R. Kumar & Sh. Yogesh Kumar Us

Section 132Section 132(1)Section 143(3)Section 153ASection 68

mentioned that the ‘assessee has not furnished the necessary detail for ascertaining identity of the person and genuineness of advance received,’ accordingly, made addition u/s 68 of the Act. During the appellate proceedings, the Ld. AR vehemently contended that the necessary details were duly filed during the course of assessment

Suraj Pulses Pvt.Ltd., Delhi vs. ITO, Ward-24(4), New Delhi

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

ITA 5477/DEL/2019[2008-09]Status: DisposedITAT Delhi18 Jan 2023AY 2008-09

Bench: Shri Shamim Yahya & Ms. Astha Chandraasstt. Year: 2008-09

For Appellant: Shri Gurjeet Singh, CAFor Respondent: Shri Gurpreet Shah Singh, Sr. DR
Section 148Section 263Section 68

Commissioner in order u/s 263 whereby assessee has discharged the onus by providing relevant documents. 9. Because the action for addition u/s 68 amounting Rs 90,00,000/- is being challenged on facts and law while all parameters for the provision of law required by assessee fulfilled as revealed

Ashita Ghelani, New Delhi vs. ITO, Ward-59(4), New Delhi

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

ITA 947/DEL/2019[2007-08]Status: DisposedITAT Delhi16 Jan 2023AY 2007-08
For Appellant: Shri Hiren Mehta, CAFor Respondent: Shri Kanav Bali, Sr. DR
Section 144Section 145(3)Section 68

year appeared to be unwarranted. 1.1 That on the facts and circumstances of the case as per settled proposition of law no separate addition u/s 68 of the Income Tax Act is called for since the books of accounts of the assessee have been rejected and an addition of Rs.20

DCIT, Central Circle-1, Udipur vs. M/S. Wagad Constrution Company, Udaipur

In the result, appeals of the Revenue are dismissed

ITA 30/JODH/2020[2014-15]Status: DisposedITAT Jodhpur12 Jan 2023AY 2014-15
For Appellant: Shri S.L. Poddar (Advocate)For Respondent: Shri Venkatesh V. (JCIT-Sr.DR)
Section 143(1)

assessee, did not pertain to the year under consideration, under these circumstances, the assessing officer was not justified in making the impugned addition u/s 68 and as such no fault could be found with the order of the Tribunal which had endorsed the decision of Commissioner (Appeals)." Similarly in case

M/S. Godwin Construction Pvt. Ltd., Meerut vs. ACIT, Meerut

In the result the appeal of the assessee is allowed

ITA 3228/DEL/2015[2011-12]Status: DisposedITAT Delhi10 Jan 2023AY 2011-12

Bench: Sh. Anil Chaturvedi & Ms. Astha Chandram/S. Godwin Construction Vs. Acit Pvt. Ltd. Central Circle A-151, Defence Colony, Meerut Mawana Road, Meerut Pan No. Aaefg 1843 R (Appellant) (Respondent) Assessee By Shri Sandeep Sapra, C.A. Revenue By Shri R. K. Gupta, Cit (D.R.) Date Of Hearing: 29.11.2022 Date Of Pronouncement: 10.01.2023 Order Per Anil Chaturvedi, Am :

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

assessee’s own undisclosed money which was introduced by the assessee through the old/non-existent allottees. He, accordingly, made its addition u/s 68 of the Act. 7. With respect to the impugned addition of Rs.66,31,000/-, AO noted that during the course of assessment proceedings, assessee was confronted with page

ACIT, New Delhi vs. M/S. Paramount Probuild Pvt. Ltd., New Delhi

In the result, the cross objection filed by the assessee stands allowed and the Revenue’s appeal is treated as infructuous

ITA 1392/DEL/2016[2006-07]Status: DisposedITAT Delhi03 Jan 2023AY 2006-07
For Appellant: Dr. Rakesh Gupta, AdvocateFor Respondent: Shri T. Kipgen, CIT DR
Section 131Section 132Section 133Section 143(2)Section 153ASection 68

facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and on facts in deleting the addition u/s 68 made on account of unexplained share capital received from 21 persons amounting to Rs.1,61,00,000/- Without appreciating the fact that neither the creditworthiness

DCIT Central Circle -2(3), Mumbai vs. M/S. Zarco Realities Pvt. Ltd, Mumbai

In the result, the In the result, the appeal of the Revenue is dismissed

ITA 1751/MUM/2022[2008-09]Status: DisposedITAT Mumbai30 Dec 2022AY 2008-09

Bench: Shri Aby T Varkey () & Shri Om Prakash Kant () Assessment Year: 2008-09 Dcit Central Circle-2(3), M/S Zarco Realties Pvt. Ltd., Room No. 803, 8Th Floor, 1403, Godvari, Sir Prathishtha Bhavan, M.K. Vs. Pochkanwala Road, Worli, Road, Churchgate, Mumbai-400025. Mumbai-400020. Pan No. Aaacp 6265 H Appellant Respondent : Assessee By Mr. Vijay Mehta, Ar Revenue By : Mr. Satyapal Kumar, Dr : Date Of Hearing 20/12/2022 : Date Of Pronouncement 30/12/2022

For Respondent: Assessee by Mr. Vijay Mehta, AR
Section 143(1)Section 143(2)Section 147Section 148Section 68

addition on the analysis of its financials and accordingly, made the addition on the analysis of its financials and accordingly, made the addition u/s. 68 of the Act. However, the ld. CIT(A) deleted the said addition. u/s. 68 of the Act. However, the ld. CIT(A) deleted the said ... addition. u/s. 68 of the Act. However, the ld. CIT(A) deleted the said addition. 6. The ld. Departmental Representative appearing for the revenue ld. Departmental Representative appearing for the revenue ld. Departmental Representative appearing for the revenue argued that action of the Assessing Officer in making the addition argued

Mrs. Simi Surendra Arya, Mumbai vs. ITO Ward 25(1)(2), Mumbai

In the result, the appeal

ITA 2316/MUM/2022[2013-14]Status: DisposedITAT Mumbai29 Dec 2022AY 2013-14

Bench: Shri Aby T Varkey () & Shri Om Prakash Kant () Assessment Year: 2013-14 Mrs. Simi Surendra Arya, Ito Ward 25(1)(2), D-402, Mota Nagar, A.K., Road Room No. 403/406, C-10, Vs. Bhawan Chakala Andheri (E), Pratyaksh Kar Bhavan Bandra Mumbai-400069. Kurla Complex, Bandra (E). Pan No. Adypa 1172 G Appellant Respondent : Assessee By Mr. R.S. Sharma, Ar Revenue By : Mr. Abi Rama Karthikeyan S., Dr : Date Of Hearing 26/12/2022 Date Of Pronouncement : 29/12/2022

For Respondent: Assessee by Mr. R.S. Sharma, AR
Section 250Section 68

illegally confirmed health. Since the CIT (A) has wrongly and illegally confirmed health. Since the CIT (A) has wrongly and illegally confirmed addition u/s 68 of Rs 36,00,000 being made By assessing u/s 68 of Rs 36,00,000 being made By assessing u/s 68

Mehul Krishnkant Mehta, Mumbai vs. ACIT 29(2), Mumbai

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

ITA 1654/MUM/2022[2015-16]Status: DisposedITAT Mumbai29 Dec 2022AY 2015-16

Bench: Shri Prashant Maharishi & Shri Pavan Kumar Gadalemehul Krishnakant Vs. Acit, Circle – 29(2) Mehta Room No. 202, C-10, Shop No. 24, Sharmila 2Nd Floor Bkc, Apartments, Model Bandra (E), Town, Mulund (W), Mumbai – 400051. Mumbai – 400080. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aacpm6130D Appellant .. Respondent Appellant By : Shri. Ravi Swarna.Ar Respondent By : Shri. Suresh Periasamy.Dr Date Of Hearing 13.10.2022 Date Of Pronouncement 30.12.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Order Passed By The National Faceless Appeal Centre (Nfac), Delhi / Cit(A) Passed U/S 250 Of The Act. The Assessee Has Raised The Fallowing Grounds Of Appeal:

For Appellant: Shri. Ravi Swarna.ARFor Respondent: Shri. Suresh Periasamy.DR
Section 10(38)Section 250Section 68

having dealt on the statement, factual information and investigation report has denied the claim of long term capital gains exemption and made an addition u/s 68 of Rs.99,72,951/-and also commission u/s 69C of the Act of Rs. 2,49,323/- and assessed the total income of Rs.1 ... confirming the action of the AO in denying the exemption of long term capital gains u/s 10(38) of the Act and making addition u/s 68 of the Act and also making the addition u/s 69C of the Act in respect of the commission. The Ld. AR further submitted that

Shri Rajesh Ramchandra Dake, Panvel vs. Dy CIT CC-1, Mumbai

ITA 2/MUM/2021[2010-11]Status: DisposedITAT Mumbai28 Dec 2022AY 2010-11

Bench: Shri Amit Shukla, Jm & Shri S. Rifaur Rahman, Am आयकरअपीलसं./ I.T.A. No. 02 & 04/Mum/2021 (ननधधारणवर्ा / Assessment Year: 2010-11 & 2012-13) Dcit, Cen. Cir-1, Shri Rajesh 6Th Floor, R. No. 10, A- Ramchandra Dake, बनाम/ B/2, Usha Prabha Chs, Wing, Ashar It Park, Ram Ganesh Gadkari Raoda No. 16-Z, Wagle Vs. Indl. Estate Marg, Prabhu Ali, Thane-400 604 Panvel – 410206, स्थधयीलेखधसं./जीआइआरसं./ Pan No. Afqpd1100D (अपीलधथी/Appellant) (प्रत्यथी / Respondent) : अपीलधथीकीओरसे/ Appellant By : None प्रत्यथीकीओरसे/Respondent By : Shri Sanjay V. Deshmukh, Ld. Dr सुनवधईकीतधरीख/ : 28.12.2022 Date Of Hearing घोर्णधकीतधरीख / : 28.12.2022 Date Of Pronouncement आदेश / O R D E R Per Amit Shukla: The Aforesaid Appeals Have Been Filed By The Assessee Against The Consolidated Order Of Even Date 19.09.2019, Passed By Ld. Cit(A)-11, Pune In Relation To Penalty Proceedings U/S 271(1)(C) For Ay 2010-11 & 2012-13. 2

For Appellant: NoneFor Respondent: Shri Sanjay V
Section 143(3)Section 271Section 271(1)(c)Section 274Section 68

assessment order, the AO has stated that the loan from Murji Faria of Rs.24,01,250/-, was unexplained cash credit and made an addition u/s 68 of the Act. While initiating penalty proceedings u/s 274 r.w.s.271(1)(c), the AO recorded his satisfaction that the penalty was initiated for 'furnishing