“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

DCIT 14(3)(1), Mumbai vs. M/S Rupa Properties & Securities P. Ltd, Mumbai

In the result, appeals filed by the revenue are dismissed

ITA 3596/MUM/2019[2009-10]Status: DisposedITAT Mumbai27 Apr 2022AY 2009-10

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Amarjit Singh, Hon'Ble

For Appellant: Shri Shankarlal JainFor Respondent: Shri T. Shankar

Section 143(1)Section 143(3)Section 147Section 148Section 68

disposed off the objections raised by the assessee and the Assessing Officer after rejecting the submissions of the assessee proceeded to make the addition u/s. 68 of the Act to the extent of loan taken by the assessee from the three parties during this assessment year. 5. Aggrieved assessee preferred ... Delhi in case of DWARKADHIS INVESTMENT(DEL)(5.1.7) held that department has all power to enforce presence of loan creditor. 5. Foundation of addition u/s 68, is finding OF INVESTIGATION WING in case of Shri Pravin Kumar Jain, as extensively quoted in order. Appellant supported genuineness and creditworthiness of three

ITO 10 (3)(1), Mumbai vs. New Empire Infrastructure Pvt. Ltd., Mumbai

In the result, this appeal by the revenue stands allowed for statistical purposes

ITA 6360/MUM/2019[2014-15]Status: DisposedITAT Mumbai18 Apr 2022AY 2014-15

Bench: Shri Shamim Yahya, Am & Shri Rahul Chaudhary, Jm

Section 131Section 131(1)(d)Section 68

also held that the appellant had not established the identity, genuineness and credit-worthiness of the loan transactions and accordingly made the addition u/s 68 of Rs.1,00,51,551/. 4. Against the above order, assessee appealed before the ld.CIT(A). 5. The ld.CIT(A) noted that assessee has filed

M/S. Futuron Systems Private Limited C/O Sri. Vinod Sunder Raman, Liquidator, Bangaluru vs. The Income Tax Officer, Ward-3(1)(1), Bangalore

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

ITA 2526/BANG/2019[2016-17]Status: DisposedITAT Bangalore18 Apr 2022AY 2016-17

Bench: Shri B. R. Baskaran & Smt. Beena Pillaiassessmentyear:2016-17

For Appellant: Sri Chavali Narayan, A.RFor Respondent: Sri Sankar Ganesh D., D.R

Section 133(6)Section 68

placed upon it u/s 68 of the Act by furnishing the above said information and hence the A.O. was not justified in making addition u/s 68 of the Act. The Ld. A.R. submitted that M/s. Accel India IV (Mauritius) Futuron systems Pvt. Ltd., Bangalore Page

M/S Davalagiri Property Developers Private Limited, Bangalore vs. The Deputy Commissioner of Income Tax Circle-2(1)(2), Bangalore

In the result, the appeal by the assessee is allowed

ITA 568/BANG/2019[2009-10]Status: DisposedITAT Bangalore11 Apr 2022AY 2009-10

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2009-10

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Shri Priyadarshi Mishra, Addl.CIT(DR)(ITAT), Bengaluru

Section 133(6)Section 234Section 68

furnishing names, age, address, date of filing application of share, number of shares of each subscriber, the AO was not justified in making addition u/s 68. (5) CIT v. Arunananda Textiles (P.) Ltd. [2011] 203 Taxman 32 (Mag.)/15 taxmann.com 226 (Kar.) It was not for the Assessee to place

M/S Atlanta Ltd, Mumbai vs. DCIT Ircle-9 (1)(2), Mumbai

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

ITA 7427/MUM/2019[2013-14]Status: DisposedITAT Mumbai08 Apr 2022AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Amarjit Singh, Hon'Ble

For Appellant: Shri Vijay MehtaFor Respondent: Shri Mehul Jain

Section 133(6)Section 143(3)Section 147Section 37Section 68

account of loan taken from M/s Gateway Leasing Pvt. Ltd which was upheld by the CIT(A). The Hon'ble Tribunal deleted the addition u/s 68 of the Act. One of the reasons given by the Hon'ble Tribunal for deleting the addition is that the assessee had filed complete ... have been filed in support of the genuineness of the transaction. 17) In view of the above, it is humbly prayed that the addition u/s 68 of the Act may kindly be deleted. Ground No 1(f): Disallowance u/s 37 of the Act on account of interest paid on loans

M/S Atlanta Ltd, Mumbai vs. DCIT Ircle-9 (1)(2), Mumbai

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

ITA 7426/MUM/2019[2012-13]Status: DisposedITAT Mumbai08 Apr 2022AY 2012-13

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Amarjit Singh, Hon'Ble

For Appellant: Shri Vijay MehtaFor Respondent: Shri Mehul Jain

Section 133(6)Section 143(3)Section 147Section 37Section 68

Dy CIT-CC-2(3), Mumbai vs. Avinash Nivrutti Bhosale, Pune

In the result, appeal filed by the revenue is dismissed

ITA 1017/MUM/2021[2013-14]Status: DisposedITAT Mumbai07 Apr 2022AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Amarjit Singh, Hon'Bledcit – Central Circle – 2(3) V. Avinash Nivrutti Bhosale Room No. 803, 8Th Floor 2, Abil House, Ganesh Khind Road Pratishtha Bhavan Range Hill Corner Old Cgo Annexe Pune City, Pune -4111007 Maharishi Karve Road Mumbai - 400020 Pan: Abtpb8151F (Appellant) (Respondent) Assessee By : Shri Vijay Mehta Department By : Ms. Sailaja Rai

For Appellant: Shri Vijay MehtaFor Respondent: Ms. Sailaja Rai

Section 10(38)Section 132Section 143(3)Section 14ASection 69A

assessee, the Ld.CIT(A), in the present case, has rightly held that no amount has been received by the assessee and deleted the addition u/s 68 of the Act. In view of the same, it is humbly prayed that the order passed by CIT(A) may kindly be 14 Avinash

ITO 3(3)(3), Mumbai vs. M/S Structarch Developers P Ltd., Mumbai

ITA 2408/MUM/2019[2005-06]Status: DisposedITAT Mumbai31 Mar 2022AY 2005-06

For Appellant: Shri A.K. TibrewalFor Respondent: Shri B.K. Bagchi

Section 133(6)Section 142(1)Section 143(1)Section 143(3)Section 147Section 250Section 263Section 68

right in directing the AO to allow set off of earlier years brought forward business loss against addition u/s 68 of the I.T Act which is assessable under the head „ Income from other sources‟? ITA. No. 2408/Mum/2019 Assessment Year: 2005-06 6. The appellant prays that the order

Arvind Hanjarimal Jain, Mumbai vs. Asst CIT 31 (2), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 270/MUM/2020[2012-13]Status: DisposedITAT Mumbai29 Mar 2022AY 2012-13

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Amarjit Singh, Hon'Ble

For Appellant: Shri Jain DixitFor Respondent: Shri Mehul Jain

Section 132Section 133(6)Section 139Section 143Section 143(2)Section 143(3)Section 148Section 154

necessary paper document in order to give colour of genuineness to their transactions. Therefore, he opined that the transactions between and accordingly made additions u/s 68 of the Act. 12. The provisions of section 68 of the Act deals with the cases, where any sum found credited in the books ... establish the fact that in fact these transactions are non-genuine, but merely relied upon the statement of Shri Bhanwarlal Jain to make additions u/s 68 of the Act. No doubt, the AO is having every right to suspect the transactions but, that by itself would not give rise

Arvind Hanjarimal Jain, Mumbai vs. Asst CIT 31 (2), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 269/MUM/2020[2011-12]Status: DisposedITAT Mumbai29 Mar 2022AY 2011-12

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Amarjit Singh, Hon'Ble

For Appellant: Shri Jain DixitFor Respondent: Shri Mehul Jain

Section 132Section 133(6)Section 139Section 143Section 143(2)Section 143(3)Section 148Section 154

Arvind Hanjarimal Jain, Mumbai vs. Asst CIT 31 (2), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 268/MUM/2020[2010-11]Status: DisposedITAT Mumbai29 Mar 2022AY 2010-11

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Amarjit Singh, Hon'Ble

For Appellant: Shri Jain DixitFor Respondent: Shri Mehul Jain

Section 132Section 133(6)Section 139Section 143Section 143(2)Section 143(3)Section 148Section 154

Arvind Hanjarimal Jain, Mumbai vs. Asst CIT 31 (2), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 267/MUM/2020[2009-10]Status: DisposedITAT Mumbai29 Mar 2022AY 2009-10

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Amarjit Singh, Hon'Ble

For Appellant: Shri Jain DixitFor Respondent: Shri Mehul Jain

Section 132Section 133(6)Section 139Section 143Section 143(2)Section 143(3)Section 148Section 154

Mr. M. N. Rajendra Kumar, Udupi vs. The Income Tax Officer, Ward-2(3), Mangaluru

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

ITA 644/BANG/2021[2013-14]Status: DisposedITAT Bangalore28 Mar 2022AY 2013-14

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranassessment Year: 2013-14

For Appellant: Smt. Sheethal Borkar, A.RFor Respondent: Shri Sankar Ganesh K., D.R

Section 132Section 133Section 133(6)Section 153ASection 41(1)Section 68

Page 3 of 7 section 41(1) of the Act, since they are not trading liabilities. With regard to the proposal to make addition u/s 68 of the Act, the assessee submitted that all the amounts were received through banking channels and further name, address, PAN numbers and confirmation ... year in which they were received and not during the year under consideration. Hence there is no scope for making any addition u/s 68 of the Act during the current year in respect of loans received in earlier years. 10. Further, we noticed that the Ld CIT(A) has entertained

Mr. Khadir Ahmed, Bengaluru vs. Income Tax Officer, Ward- 6(3)(3), Bengaluru

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

ITA 393/BANG/2020[2016-17]Status: DisposedITAT Bangalore28 Mar 2022AY 2016-17

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2016-17 Mr. Khadir Ahmed, # 836, Pipeline Road, The Income-Tax Opp: Bbmp Ward Office, Officer, Yeshwanthpur, Ward – 6 [3][3], Bangalore – 560 022. Bangalore. Vs. Pan: Afxpa8334H Appellant Respondent Assessee By : Shri Deepesh Waghale, Ca : Shri Priyadarshi Mishra, Addl. Revenue By Cit (Dr) Date Of Hearing : 16-03-2022 Date Of Pronouncement : 28-03-2022 Order Per Beena Pillaipresent Appeal Arises Out Of Order Dated 28.02.2020 Passed By The Ld.Cit(A)-6, Bangalore For Assessment Year 2016-17 On Following Grounds Of Appeal: “1. The Orders Of The Authorities Below In So Far As They Are Against The Appellant, Are Opposed To Law, Equity, Weight Of Evidence, Probabilities, Facts & Circumstances Of The Case. 2. The Learned Cit[A] Is Not Justified In Sustaining A Sum Of Rs. 52,91,575/-Reckoned At 25% Of The Cash Deposits Made In The Bank Account Of Rs.2,11,66,300/- As Estimated Income Of The Appellant As Against The Addition Of Rs.64,05,000/- Made By The Learned A.O. As Unexplained Cash Deposits Under The Facts & In The Circumstances Of The Appellant'S Case.

For Appellant: Shri Deepesh Waghale, CA

Section 142(1)Section 143(1)Section 143(2)Section 234Section 54Section 54F

Rs.2,74,97,600/-. It is submitted that the Ld.AO failed to consider this aspect of the matter and made addition u/s 68 of the Act. The Ld.AR submitted that the income of Rs 5,50,495/- reported by the assessee under the head "Business" commensurate with the extent

Gm Overseas, New Delhi vs. ACIT Circle-48(1), New Delhi

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

ITA 1891/DEL/2020[2010-11]Status: DisposedITAT Delhi21 Mar 2022AY 2010-11

For Appellant: Shri Suresh Gupta, CAFor Respondent: Shri Hemant Gupta, Sr. DR

Section 131ASection 133ASection 143(3)Section 147

accepted the loan transactions as genuine or not. The AO, in the instant case, without doing this exercise made the addition u/s 68 r.w.s. 115 BBE of the Act which is not justified. Referring to the decision of the Hon’ble Calcutta High Court in the case

The Deputy Commissioner of Income Tax, Central Circle- 2(1), Mysuru vs. Shri. H Omkarappa (HUF), Shivamogga

In the result, the appeal of the Revenue is dismissed

ITA 2192/BANG/2019[2008-09]Status: DisposedITAT Bangalore18 Mar 2022AY 2008-09

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranassessment Year :2008-09 The Income Tax Officer, Vs. Shri. H. Omkarappa, (Huf), Ward - 1, #3, A Block, Apmc Yard, Shivamogga Sagar Road, Shivamogga. Pan : Aabhh 1124 B Appellant Respondent Assessee By : Shri. Shri. S. Ramasubramanyam, Ca Revenue By : Shri. Sankar Ganesh K, Jcit(Dr)(Itat), Bengaluru. Date Of Hearing : 10.03.2022 Date Of Pronouncement : 16.03.2022 O R D E R

For Appellant: Shri. Shri. S. Ramasubramanyam, CAFor Respondent: Shri. Sankar Ganesh K, JCIT(DR)(ITAT), Bengaluru

Section 133ASection 143(3)Section 40Section 68

opposed to law and facts of the case. 2. In Para No. 5.3 of the CIT(A) had stated that addition U/s. 68 of the Act had to be sustained and in para 5.4 CIT(A) had stated that the claim of the appellant that transaction cannot be added U/s ... Rs.2,23,48,550/- u/s. 68 of the Act. Page 5 of 12 8. Before CIT(A), assessee challenged the addition u/s. 68 of the Act on the following grounds: (i) Though the explanation offered by the respondent may not have been found satisfactory, the assessing officer taking into account

Puttappa T.K, Bangalore vs. Income Tax Officer Ward-2(3)(1), Bangalore

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

ITA 547/BANG/2019[2012-13]Status: DisposedITAT Bangalore17 Mar 2022AY 2012-13

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranassessment Year: 2012-13

For Appellant: Smt. M.R. Vanaja, A.RFor Respondent: Shri Sankar Ganesh K., D.R

Tribunal that unexplained bank deposits are liable to be sustained u/s 69 of the Act even though the assessing officer had made the addition u/s 68 of the Act. Hence mentioning of wrong section would not be fatal. The view expressed by Hon’ble Karnataka High Court would get support

DCIT Circle-3(1)(1), Mumbai vs. M/S Bla Power Pvt Ltd, Mumbai

In the result, the appeal of the revenue is partly allowed for statistical purposes

ITA 847/MUM/2019[2010-11]Status: DisposedITAT Mumbai10 Mar 2022AY 2010-11

For Appellant: Dharmesh ShahFor Respondent: Mahesh Akhade

Section 131Section 143(3)Section 147Section 148Section 68Section 75(1)

stated that parallel proceedings in the case of its holding company assessed in the same range was already going on therefore, no any addition u/s 68 of the Act should be made in the case of the assessee. The assessee has also placed a number of judicial pronouncements reported ... worth of the company is Rs 41.23 crores. It is also found that the AO has not said a word about the addition u/s 68 of this amount of Rs 6.49 crores received from BLA Industries Pvt Ltd. There is no discussion at all. Not even preliminary facts have been

Luxora Infrastructure P. Ltd., Mumbai vs. DCIT Central Circle-2(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1608/MUM/2020[201-12]Status: DisposedITAT Mumbai09 Mar 2022

Bench: Shri Shamim Yahya

Section 143(3)Section 154Section 234ASection 68

assessment u/s. 143(3) of the year under consideration was already passed prior to search and the AO did not make any addition u/s. 68. Therefore, the AO cannot revisit the order again without any incriminating material AO has not brought out anything in the assessment order to establish, that ... line which were followed by the earlier Assessing officers of LRPL & Passed order for AY 2013-14 &. AY 2014-15 and made similar addition U/S 68. LRPL preferred appeal against said order before your Honour which is pending . 7. Since both the cases i.e. the Appellant's case

Deputy Commissioner of Income Tax, Central Circle - 4(3), Mumbai vs. M/S Lush Hotels and Entertainment Limited, Mumbai

In the result, the appeal filed by the revenue is hereby dismissed

ITA 2700/MUM/2019[2013-14]Status: DisposedITAT Mumbai09 Mar 2022AY 2013-14

Bench: S. Rifaur Rahman, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No. 2700/Mum/2019 (निर्धारण वर्ा / Assessment Year: 2013-14) Dcit, Central Circle-4(3) बिधम/ M/S. Lush Hotels & Room No.1921, 19Th Floor, Entertainment Ltd. Vs. Air India Building, Nariman (M/S. Lush Hospitality Ltd.) 10, Homi Modi Street, 2Nd Point, Mumbai-400021. Floor, Above Kapal Bank, Fort, Mumbai-400023. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabcl2464P (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Assessee By: Shri N. R. Agrawal Revenue By: Shri Mehul Jain (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 13/01/2022 घोषणा की तारीख /Date Of Pronouncement: 09/03/2022 आदेश / O R D E R Per Amarjit Singh, Jm: The Revenue Has Filed The Present Appeal Against The Order Dated 15.02.2019 Passed By The Commissioner Of Income Tax (Appeals) -02, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y.2013- 14. 2. The Revenue Has Raised The Following Grounds: - “1. Whether On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Was Justified In Deleting The Addition Made By The Assessing Officer On Account Of Share Application Money Received From M/S. Third Eye Infrastructure Ltd. In Spite Of The Fact That It Had No Taxable Income & Filed Its Return Of Income At Rs. Nil For The Same Assessment Year. A.Y.2013-14 2. Whether On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Was Justified In Deleting The Addition Without Appreciating The Facts That The Parties From Whom M/S. Teil Had Received Funds Were Not Having Creditworthiness Vis-A-Vis The Amount Paid To M/S. Teil By Them Respectively.

For Appellant: Shri N. R. AgrawalFor Respondent: Shri Mehul Jain (Sr. AR)

Section 143(1)Section 143(2)Section 14ASection 68

consideration. The notice was issued and after the reply of the assessee, The AO treated the same as un-genuine and raised the addition u/s 68 of the Act as unexplained cash credit. After some disallowance u/s 14A r.w. Rule 8D and disallowance of depreciation, the AO assessed the income