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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, New Delhi vs. M/S. Star Light Consumer Electronics Pvt. Ltd., New Delhi

ITA 6070/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

with respect to the same Assessee, divergent views have been taken by different officers at the first appellate stage in relation to similar additions u/s 68 made in different A.Ys. For instance:- • In SI. No. 6 - Kasper Information Technology Pvt. ltd. wherein addition u/s 68 has been deleted ... CI.T(A) for A.Y. 2012-13 as against SI. No. 7 - Kasper Information Technology Pvt. ltd. wherein similar addition u/s 68 has been confirmed by the Ld. CIT (A) for A.Y. 2013-14. • In Sl. No, 17- Globus Real Infra Pvt. Ltd. A.Y 2012-13 wherein addition u/s 68

ACIT, New Delhi vs. M/S. Superstar Agency Pvt. Ltd., New Delhi

ITA 5832/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

with respect to the same Assessee, divergent views have been taken by different officers at the first appellate stage in relation to similar additions u/s 68 made in different A.Ys. For instance:- • In SI. No. 6 - Kasper Information Technology Pvt. ltd. wherein addition u/s 68 has been deleted ... CI.T(A) for A.Y. 2012-13 as against SI. No. 7 - Kasper Information Technology Pvt. ltd. wherein similar addition u/s 68 has been confirmed by the Ld. CIT (A) for A.Y. 2013-14. • In Sl. No, 17- Globus Real Infra Pvt. Ltd. A.Y 2012-13 wherein addition u/s 68

ACIT, New Delhi vs. M/S. Sur Buildcon Pvt. Ltd., New Delhi

ITA 5831/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

with respect to the same Assessee, divergent views have been taken by different officers at the first appellate stage in relation to similar additions u/s 68 made in different A.Ys. For instance:- • In SI. No. 6 - Kasper Information Technology Pvt. ltd. wherein addition u/s 68 has been deleted ... CI.T(A) for A.Y. 2012-13 as against SI. No. 7 - Kasper Information Technology Pvt. ltd. wherein similar addition u/s 68 has been confirmed by the Ld. CIT (A) for A.Y. 2013-14. • In Sl. No, 17- Globus Real Infra Pvt. Ltd. A.Y 2012-13 wherein addition u/s 68

ITO, New Delhi vs. M/S Stylish Construction Pvt. Ltd., New Delhi

ITA 5744/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

with respect to the same Assessee, divergent views have been taken by different officers at the first appellate stage in relation to similar additions u/s 68 made in different A.Ys. For instance:- • In SI. No. 6 - Kasper Information Technology Pvt. ltd. wherein addition u/s 68 has been deleted ... CI.T(A) for A.Y. 2012-13 as against SI. No. 7 - Kasper Information Technology Pvt. ltd. wherein similar addition u/s 68 has been confirmed by the Ld. CIT (A) for A.Y. 2013-14. • In Sl. No, 17- Globus Real Infra Pvt. Ltd. A.Y 2012-13 wherein addition u/s 68

ITO, New Delhi vs. M/S. Sukhna Real Estate Pvt. Ltd., Ghaziabad

ITA 5742/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

with respect to the same Assessee, divergent views have been taken by different officers at the first appellate stage in relation to similar additions u/s 68 made in different A.Ys. For instance:- • In SI. No. 6 - Kasper Information Technology Pvt. ltd. wherein addition u/s 68 has been deleted ... CI.T(A) for A.Y. 2012-13 as against SI. No. 7 - Kasper Information Technology Pvt. ltd. wherein similar addition u/s 68 has been confirmed by the Ld. CIT (A) for A.Y. 2013-14. • In Sl. No, 17- Globus Real Infra Pvt. Ltd. A.Y 2012-13 wherein addition u/s 68

ITO, New Delhi vs. M/S. Sukhna Steel Pvt. Ltd., New Delhi

ITA 5741/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

with respect to the same Assessee, divergent views have been taken by different officers at the first appellate stage in relation to similar additions u/s 68 made in different A.Ys. For instance:- • In SI. No. 6 - Kasper Information Technology Pvt. ltd. wherein addition u/s 68 has been deleted ... CI.T(A) for A.Y. 2012-13 as against SI. No. 7 - Kasper Information Technology Pvt. ltd. wherein similar addition u/s 68 has been confirmed by the Ld. CIT (A) for A.Y. 2013-14. • In Sl. No, 17- Globus Real Infra Pvt. Ltd. A.Y 2012-13 wherein addition u/s 68

ITO, New Delhi vs. M/S. Sunlight Tour and Travels Pvt. Ltd., Sahibabad

ITA 5740/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

with respect to the same Assessee, divergent views have been taken by different officers at the first appellate stage in relation to similar additions u/s 68 made in different A.Ys. For instance:- • In SI. No. 6 - Kasper Information Technology Pvt. ltd. wherein addition u/s 68 has been deleted ... CI.T(A) for A.Y. 2012-13 as against SI. No. 7 - Kasper Information Technology Pvt. ltd. wherein similar addition u/s 68 has been confirmed by the Ld. CIT (A) for A.Y. 2013-14. • In Sl. No, 17- Globus Real Infra Pvt. Ltd. A.Y 2012-13 wherein addition u/s 68

ITO, New Delhi vs. M/S. Sintex Consumers Electronics Pvt. Ltd., Delhi

ITA 5736/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

with respect to the same Assessee, divergent views have been taken by different officers at the first appellate stage in relation to similar additions u/s 68 made in different A.Ys. For instance:- • In SI. No. 6 - Kasper Information Technology Pvt. ltd. wherein addition u/s 68 has been deleted ... CI.T(A) for A.Y. 2012-13 as against SI. No. 7 - Kasper Information Technology Pvt. ltd. wherein similar addition u/s 68 has been confirmed by the Ld. CIT (A) for A.Y. 2013-14. • In Sl. No, 17- Globus Real Infra Pvt. Ltd. A.Y 2012-13 wherein addition u/s 68

ITO, New Delhi vs. M/S. Supreme Placement Services Pvt. Ltd., New Delhi

ITA 5650/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

with respect to the same Assessee, divergent views have been taken by different officers at the first appellate stage in relation to similar additions u/s 68 made in different A.Ys. For instance:- • In SI. No. 6 - Kasper Information Technology Pvt. ltd. wherein addition u/s 68 has been deleted ... CI.T(A) for A.Y. 2012-13 as against SI. No. 7 - Kasper Information Technology Pvt. ltd. wherein similar addition u/s 68 has been confirmed by the Ld. CIT (A) for A.Y. 2013-14. • In Sl. No, 17- Globus Real Infra Pvt. Ltd. A.Y 2012-13 wherein addition u/s 68

ITO, New Delhi vs. M/S Angel Cement Pvt. Ltd., Ghaziabad

ITA 4691/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

with respect to the same Assessee, divergent views have been taken by different officers at the first appellate stage in relation to similar additions u/s 68 made in different A.Ys. For instance:- • In SI. No. 6 - Kasper Information Technology Pvt. ltd. wherein addition u/s 68 has been deleted ... CI.T(A) for A.Y. 2012-13 as against SI. No. 7 - Kasper Information Technology Pvt. ltd. wherein similar addition u/s 68 has been confirmed by the Ld. CIT (A) for A.Y. 2013-14. • In Sl. No, 17- Globus Real Infra Pvt. Ltd. A.Y 2012-13 wherein addition u/s 68

M/S. Classic Real Estate Developers Pvt. Ltd., New Delhi vs. DCIT, New Delhi

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

ITA 1337/DEL/2014[2003-04]Status: DisposedITAT Delhi17 Mar 2021AY 2003-04

Bench: Shri R.K. Panda & Ms Suchitra Kamble

For Appellant: Shri Sudesh Garg, AdvocateFor Respondent: Ms Nidhi Srivastava, CIT, DR
Section 131Section 132Section 139(1)Section 153ASection 68

19th October, 2016. 12. The ld. Counsel for the assessee submitted that the AO, in para 5 of the order has primarily made addition u/s 68 of the Act after referring to the enquiries conducted by the Investigation Wing at Kolkata in the cases of group entities M/s Vikas Telecom

DCIT, New Delhi vs. M/S. Technico Industries Pvt. Ltd., New Delhi

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

ITA 5204/DEL/2015[2011-12]Status: DisposedITAT Delhi09 Mar 2021AY 2011-12

Bench: Shri R.K. Panda & Ms Suchitra Kambleassessment Year: 2011-12 Dcit, Vs Technico Industries Pvt. Ltd., Circle-25(1), 103, Pratap Bhawan, Cr Building, Ip Estate, Bahadur Shah Zafar Marg, New Delhi. Near Indian Express Building, New Delhi. Pan: Aaact4445P (Appellant) (Respondent) Assessee By : Shri Aditya Kumar, Ca & Shri Ashwani Kumar, Ca Revenue By : Mrs Aashna Paul, Cit-Dr Date Of Hearing : 17.12.2020 Date Of Pronouncement : 09.03.2020 Order Per R.K. Panda, Am: This Appeal Filed By The Revenue Is Directed Against Order Dated 31St March, 2015 Of The Cit(A)-9, New Delhi Relating To Assessment Year 2011-12. 2. Facts Of The Case, In Brief, Are That The Assessee Is A Company Engaged In The Business Of Manufacturing Of Sheet Metal Components & Tools & Dies. It Filed Its Return Of Income On 29Th September, 2011 Declaring ‘Nil’ Income. The Said Return Was Revised On 14Th September, 2012 Declaring A Loss Of Rs.3,61,68,075/-. During The Course Of Assessment Proceedings, The Ao, On Perusal Of The Balance Sheet Filed By The Assessee, Noted That The Assessee Company Has Issued 14,72,000 Equity Shares At A Premium Of Rs.115. From The Various Details Furnished By The Assessee, The Ao Noted That The Assessee Has Issued Shares To The Following Persons/Parties:-

For Appellant: Shri Aditya Kumar, CA &For Respondent: Mrs Aashna Paul, CIT-DR
Section 133(6)

various decisions, it was argued that the assessee has discharged the onus cast on it by providing all necessary evidences and, therefore, no addition u/s 68 is called for. 10. However, the AO was not satisfied with the arguments advanced by the assessee. He referred to the amended provisions ... Rs.4,36,63,403/- as unsecured loans, however, deleted the addition of Rs.1,20,00,000/- by observing as under:- “5.12 Regarding the addition u/s 68 towards unexplained share application money from M/s ARG Auto Components Pvt. Ltd., the appellant has pointed out that this amount has been transferred from

Dabur Invest Corp, New Delhi vs. JCIT, Range-46, New Delhi

In the result, appeal of the assessee is partly allowed

ITA 8058/DEL/2018[2015-16]Status: DisposedITAT Delhi11 Feb 2021AY 2015-16

Bench: Shri Sudhanshu Srivastava & Shri Prashant Maharishi(Partially Through Video Conferencing) Dabur Invest Corp, The Joint Commissioner Of Vs. 4Th Floor, Punjabi Bhawan, 10, Income Tax , Rouse Avenue, New Delhi Range-46, Pan: Aaadfd2529G New Delhi (Appellant) (Respondent)

For Appellant: Shri M. P. Rastogi, AdvFor Respondent: Shri G. C. Srivastava, Adv
Section 143Section 4

investment and the receipt of option price is not income. Therefore, it was submitted that there is no question of making any addition u/s 68 of the income tax act. 11. The assessing officer once again not satisfied with the reply of the assessee. He asked assessee on 29th

M/S. Aarya Organic Foods & Ayurvedic Industries Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, appeal of the assessee is partly allowed

ITA 3004/DEL/2017[2012-13]Status: DisposedITAT Delhi05 Feb 2021AY 2012-13

Bench: Sh. Bhavnesh Saini & Sh. Anil Chaturvedi(Through Video Conferencing) Ita No.3004/Del/2017 For A.Y. 2012-13 M/S. Aarya Organic Vs. Ito Foods & Ayurvedic Ward – 1(1), Industries Pvt. Ltd., New Delhi 504, Pratap Chamber-2, Saraswati Marg, Karol Bagh, New Delhi - 110005 Pan- Aahca 9363 J (Appellant) (Respondent) Assessee By Shri Ved Jain, Adv. Revenue By Smt. Alka Gautam, Sr. Dr Date Of Hearing: 27/01/2021 Date Of Pronouncement: 05/02/2021 Order Per Anil Chaturvedi, Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 09.03.2017 Of The Commissioner Of Income Tax (A)-I, New Delhi Relating To Assessment Year 2012-13. 2. The Relevant Facts As Culled From The Material On Records Are As Under:

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

absence of confirmations from all the parties he considered Rs.93,52,000/- as being unverifiable and accordingly made its addition u/s 68 of the Act. 7. Aggrieved by the order of AO, assessee carried the matter before the CIT(A). The CIT(A) after considering the material on record

ACIT, New Delhi vs. M/S Puranmal Food India Pvt. Ltd., New Delhi

In the result the Cross Objection filed by the assessee is allowed and the appeal filed by the revenue is dismissed

ITA 502/DEL/2017[2011-12]Status: DisposedITAT Delhi27 Jan 2021AY 2011-12

Bench: Shri R.K. Panda & Ms. Suchitra Kambleasstt. Year 2011-12 Acit Vs. Puranmal Food India Pvt. Ltd. Cent. Circle 3 R/O F-28, New Delhi Smalakha Bandh Road, Near Hotel Uppal Orchid New Delhi - 110 037 Pan Aafcp3180Q (Appellant) (Respondent) Co. No. 107/Del/2019 Asstt. Year 2011-12 Puranmal Food India Pvt. Ltd. Vs. Acit R/O F-28, Cent. Circle 3 Smalakha Bandh Road, New Delhi Near Hotel Uppal Orchid New Delhi - 110 037 Pan Aafcp3180Q (Appellant) (Respondent

For Appellant: Shri Ved Jain AdvocateFor Respondent: Smt. Sushma Singh, CIT(DR)
Section 132Section 133(6)Section 153ASection 68

discharged the onus cast on it by proving the identity and creditworthiness of the share applicant and the genuineness of the transaction, no addition u/s 68 could have been made. Relying on various decisions, he submitted that addition can not be made merely on surmises ,suspicion and conjectures. He accordingly

DCIT, Circle-17(1), New Delhi vs. Mps Infotecnics Pvt. Ltd., New Delhi

In the result ground number 5 and 6 of the appeal of the learned assessing officer are dismissed

ITA 6939/DEL/2017[2011-12]Status: DisposedITAT Delhi21 Jan 2021AY 2011-12

Bench: Shri H.S.Sidhu & Shri Prashant Maharishi(Through Video Conferencing) The Deputy Commissioner Of Vs. Mps Infotecnics Pvt. Ltd, Income Tax (Formerly Known As Visesh Circle-17(1), Infotecnic Ltd), 703, Arunachal New Delhi Building, 19, Barakhamba Road, Connaught Place, New Delhi Pan: Aaacv4805B (Appellant) (Respondent)

For Appellant: Shri R. S. Singhvi, CAFor Respondent: Ms. Pramita M. Biswas, CIT DR
Section 143(3)Section 250(4)Section 32(1)Section 68

bench in case of the assessee in earlier years, the learned CIT – A allowed the claim of the assessee. With respect to the addition u/s 68 of the Act of Rs. 94,07,82,500/- the ld CIT(A) deleted the addition for the reason that this is the first ... amounting to ₹ 220 crores to which the shares were allotted subsequently on 28th of April 2012. The learned assessing officer has made an addition u/s 68 of the income tax act to the extent of sum received during the year for convertible warrants amounting

DCIT, New Delhi vs. M/S. Raju Investments (P) Ltd., Delhi

Appeal of the Revenue is dismissed

ITA 302/DEL/2014[2009-10]Status: DisposedITAT Delhi21 Jan 2021AY 2009-10

Bench: Shri R. K. Panda & Ms Suchitra Kamble(Through Video Conferencing)

Section 139(1)Section 68

allowed the appeal of the assessee. 5. The Ld. DR submitted that the CIT(A) erred in deleting the addition u/s 68 of the Act with respect to procurement of accommodation entries to share application money from non-descript companies. The Ld. DR submitted that

CIT vs. Oasis Hospitalities Pvt Ltd

ITA - 2093 / 2010HC Delhi31 Jan 2011
Section 68

credit worthiness of the so called subscribers and the A.O. was justified in treating this investment as unexplained and made the addition u/s 68 of the I.T. Act. We, therefore, find no infirmity in the order of the CIT (A). Accordingly, we confirm the same.” 41. The learned counsel