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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

DCIT, Central Circle-8(1), Mumbai vs. Shiv Shankar Sharma, Mumbai

In the result, all the appeals filed by the revenue are

ITA 1685/MUM/2025[2016-17]Status: DisposedITAT Mumbai08 Aug 2025AY 2016-17
Section 132Section 132(4)Section 143(3)

well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making an addition u/s 68 of the Income Tax Act, 1961 amounting to Rs.5,26,26,315/- by treating the sales consideration on account of sale of shares

Royal Remedies Pharma Healthcare, Delhi vs. Addl. CIT (A), Delhi

Appeal is partly allowed

ITA 3653/DEL/2025[2017-2018]Status: DisposedITAT Delhi08 Aug 2025AY 2017-2018

Bench: Shri Mahavir Singh, Hon’Bleasstt. Year : 2017-18 Royal Remedies Pharma Healthcare Vs. Addl. Cit(A), 2707/B, Floor 1, Sabzi Mandi, Ward 34(5), Civic Centre, Main Bazar, Delhi New Delhi (Pan: Aapfr6429R) (Appellant) (Respondent) Appellant By : None Respondent By : Shri Sangeet Bansal, Sr. Dr. Date Of Hearing 04.08.2025 Date Of Pronouncement 04.08.2025 Order This Appeal Has Been Filed By The Assessee Against The Order Dated 17.01.2025 Passed By The Addl/Jcit(A), Agra For The Assessment Year 2017- 18 On The Following Ground:- 1(A) That The Ld. Cit(A) Has Erred In Law & On Facts In Upholding The Addition Of Rs.5,04,500/- Made By The Ao U/S 68 Of The I.T. Act In Respect Of Cash Deposited In Bank Account In Old Specified Bank Notes During The Period Of Demonetization Period Between 9/11/2016 To 20/11/2016. B) That The Ld. Cit(A) Has Erred In Law & On Facts In Holding That Details Of Persons/Debtors From Whom Realization Of Sale Proceeds Had Been Received In Cash, Had Not Been Produced Before The Aô Whereas

For Appellant: NoneFor Respondent: Shri Sangeet Bansal, Sr. DR
Section 115Section 44ASection 68Section 69

proposed addition u/s 69 of the I.T Act while in framing the Assessment Order, AO changed his mind and unilaterally made addition u/s 68, ignoring the fact that neither section 68 nor section 69 of the I.T. Act is applicable in respect of cash sales forming part of audited books

Income Tax Officer, Jaipur vs. Pooja Kedia, Jaipuir

In the result, the appeal of the revenue is dismissed

ITA 1321/JPR/2024[2019-20]Status: DisposedITAT Jaipur07 Aug 2025AY 2019-20
For Appellant: Sh. Siddharth Ranka, Adv. &For Respondent: Sh. Gaurav Awasthi, JCIT, Sr. DR
Section 142(1)Section 147Section 148ASection 68

Calcutta High Court in the case of CIT Vs Dataware Pvt Ltd. [ GA no.2856 of 2011] had deleted similar addition u/s 68 with reference to unsecured loan creditors. The relevant extracts of the decision are reproduced below: "In our opinion, in such circumstances, the Assessing officer of the assesses cannot ... group, the Hon'ble ITAT, Ahmedabad bench in the case of ITO vs. Aashna Developers Pvt. Ltd. (ITA No. 417/AHD/2022) has deleted the addition u/s 68 of the Act holding that the assessee has been able to prove the identity, genuineness and creditworthiness of the transaction

Assistant Commissioner of Income Tax (Central Circle), Bareilly vs. Varunarjun Trust, Lucknow

In the result, both the appeals are dismissed

ITA 620/LKW/2024[2016-17]Status: DisposedITAT Lucknow07 Aug 2025AY 2016-17

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 12ASection 133(6)Section 142(1)Section 148Section 153C

levied tax at normal rate on the addition of Rs.3,75,00,000/-. 3.1.3 Even in case of an assessee where addition u/s 68 is made, the tax is not to be charged at normal rate. However, even though the assessee is registered u/s 12AA, the normal tax is charged ... without any application of mind, based on whims and fancies and thus should be quashed. 3.2.6 The Ld. AO made the addition u/s 68 levied of tax under section 115BBE, even though this is a case of trust and the assessee has shown its complete income and expenses details

Assistant Commissioner of Income Tax, Central Circle, Bareilly vs. Varunarjun Trust, Lucknow

In the result, both the appeals are dismissed

ITA 619/LKW/2024[2015-16]Status: DisposedITAT Lucknow07 Aug 2025AY 2015-16

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 12ASection 133(6)Section 142(1)Section 148Section 153C

levied tax at normal rate on the addition of Rs.3,75,00,000/-. 3.1.3 Even in case of an assessee where addition u/s 68 is made, the tax is not to be charged at normal rate. However, even though the assessee is registered u/s 12AA, the normal tax is charged ... without any application of mind, based on whims and fancies and thus should be quashed. 3.2.6 The Ld. AO made the addition u/s 68 levied of tax under section 115BBE, even though this is a case of trust and the assessee has shown its complete income and expenses details

Om Prakash Arora, Delhi vs. DCIT, Central Circle-1(1)(1), Delhi

In the result, appeal of assessee in ITA Nos

ITA 4931/DEL/2024[2017-18]Status: DisposedITAT Delhi07 Aug 2025AY 2017-18

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Arpit Goel, CAFor Respondent: Shri Dheeraj Kumar Jain, Sr. DR
Section 115BSection 143(3)Section 145(3)Section 68

under: “1. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming addition u/s 68 of Income- Page 1 of 7 ITA No. 4931 /DEL/2024 Om Prakash Arora Vs Dy.CIT

Deputy Commissioner of Income Tax, Jaipur vs. Bharat Spun Pipe and Construction Company, Jaipur

In the result the appeal of the revenue in ITA no

ITA 360/JPR/2025[2017-18]Status: DisposedITAT Jaipur06 Aug 2025AY 2017-18
For Appellant: Shri Tarun Mittal, C.AFor Respondent: Ms. Alka Gautam, (CIT) (V.C.)
Section 144BSection 147Section 148Section 148ASection 153C

work done by the assessee, and as such does not fall in the category of receipts which could make the assessee liable for addition u/s 68. There could have been a possibility that there was a connivance of the assessee with the principal contractor, and some portion of the receipts ... income of the assessee of that previous year: From perusal of above, it is evident that assessing officer can make addition u/s 68 only under two circumstances, i.e.: (i) Appellant does not offer any explanation about nature and source of such credit or (ii) Explanation offered by Appellant

Pawan Puri, H.No 3343, Street No.3, Chemma Colony, Ludhiana Punjab, Ludhiana vs. Income Tax Officer Ward-2 Rishi Nagar, Ludhiana

In the result, appeal of the assessee is allowed

ITA 77/CHANDI/2025[2017-18]Status: DisposedITAT Chandigarh06 Aug 2025AY 2017-18

Bench: Shri Rajpal Yadav & Shri Krinwant Sahayआयकर अपील सं./ Ita No. 77/Chd/2025 "नधा"रण वष" / Assessment Year: 2017-18 Shri Pawan Puri, Vs The Ito, House No. 3343, Street No. 3, Ward No. 2, Chemma Colony, Ludhiana. Rishi Nagar, Ludhiana. "थायी लेखा सं./Pan No: Ayupp8464B अपीलाथ"/Appellant ""यथ"/Respondent Assessee By : Shri Sudhir Sehgal, Advocate Revenue By : Dr. Ranjeet Kaur, Sr.Dr Date Of Hearing : 02.07.2025 Date Of Pronouncement : 06.08.2025 Physical Hearing O R D E R

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Dr. Ranjeet Kaur, Sr.DR
Section 44ASection 68

Rs.34,05,424/-. Both the Revenue Authorities have erred in A.Y.2017-18 3 not appreciating the transaction in right perspective and unnecessarily making the addition u/s 68 of the Act. Therefore, we allow the appeal and delete the addition made by the AO and confirmed by the CIT (Appeals

Abdulwahid Abdulkarim Qureshi, Ahmednagar vs. ITO, Ward 2, Ahmednagar

In the result, both the appeals of the assessee are allowed

ITA 894/PUN/2024[2017-18]Status: DisposedITAT Pune06 Aug 2025AY 2017-18

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: Shri Sanket M. JoshiFor Respondent: Shri Ramnath P. Murkunde
Section 147Section 250

lead case. Assessee has raised following grounds of appeal : “1] The learned CIT(A) erred in confirming the addition u/s 68 of Rs.1,38,39,394 made by the A.O. by taxing entire deposits in bank account held with Renuka Mata Multi State Urban Credit Co-op. Society

Abdulwahid Abdulkarim Qureshi, Ahmednagar vs. ITO, Ward 2, Ahmednagar

In the result, both the appeals of the assessee are allowed

ITA 893/PUN/2024[2016-17]Status: DisposedITAT Pune06 Aug 2025AY 2016-17

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: Shri Sanket M. JoshiFor Respondent: Shri Ramnath P. Murkunde
Section 147Section 250

lead case. Assessee has raised following grounds of appeal : “1] The learned CIT(A) erred in confirming the addition u/s 68 of Rs.1,38,39,394 made by the A.O. by taxing entire deposits in bank account held with Renuka Mata Multi State Urban Credit Co-op. Society

DCIT-27(3), Mumbai, Navi Mumbai vs. Vintage Enterprises, Navi Mumbai

ITA 858/PUN/2024[2013-14]Status: DisposedITAT Pune06 Aug 2025AY 2013-14

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: Shri Rakesh Ranjan-CIT DRFor Respondent: Shri M. Subramanian
Section 143(2)Section 143(3)Section 68

only Rs.2.5 lakhs and the credit balance was only miniscule. Needless to mention that this cannot be ground good enough to make the addition u/s 68 of the act. Without prejudice to the above, a perusal of the Bank Statement of the loan creditor would reveal that the loan creditor

Ananda Prasad Venigala, Hyderabad vs. DCIT, Circle-1(1), Hyderabad

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

ITA 1384/HYD/2024[2017-18]Status: DisposedITAT Hyderabad06 Aug 2025AY 2017-18

Bench: Shri Ravish Sood & Shri Madhusudan Sawdiaआ.अपी.सं /Ita No.1384/Hyd/2024 (निर्धारण वर्ा/Assessment Year:2017-18) Shri Ananda Prasad Venigala, Dy. Commissioner Of Income Tax, Vs. Circle-1(1), Hyderabad. Hyderabad. Pan:Aewpp1096B (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri S. Rama Rao, Advocate रधजस् व द्वधरध/Revenue By:: Dr. Sachin Kumar, Sr-Dr सुिवधई की तधरीख/Date Of Hearing: 31/07/2025 घोर्णध की तधरीख/Pronouncement: 06/08/2025 आदेश/Order Per Madhusudan Sawdia, A.M.: This Appeal Is Filed By Shri Ananda Prasad Venigala (“The Assessee”), Feeling Aggrieved By The Order Passed By The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi (“Ld. Cit(A)”), Dated 18.11.2024 For The A.Y. 2017-18. 2. The Assessee Has Raised The Following Grounds Of Appeal :

For Appellant: Shri S. Rama Rao, AdvocateFor Respondent: : Dr. Sachin Kumar, SR-DR
Section 10Section 143(3)Section 14ASection 14A(2)Section 68

erred in not accepting the details furnished by the appellant and in confirming the action of the Assessing Officer in making addition u/s 68 of the I.T.Act. 6) Any other ground/grounds that may be urged at the time of hearing.” 3. The brief facts of the case are that

Excel Telesonic India Private Limited, Mumbai vs. Deputy Commissioner of Income Tax, Delhi

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

ITA 3572/MUM/2025[2018-19]Status: DisposedITAT Mumbai06 Aug 2025AY 2018-19

Bench: Shri Anikesh Banerjee & Shri Prabhash Shankar

For Appellant: Shri Sharath RaoFor Respondent: Shri Hemanshu Joshi, SR DR
Section 139(1)Section 143(2)Section 143(3)Section 144BSection 234ASection 250Section 270ASection 36Section 36(1)(iii)Section 68

ACIT [2020] 422 ITR 128 wherein the 6 ITA 3572/Mum /2025 Excel Telesonic India Pvt Ltd assessing officer had sought to make addition u/s 68 on outstanding sundry credit balances. Since those credits related to the prior year, the Hon'ble Bombay held that section 68 cannot be made

Mahesh Kumar, Delhi vs. ITO, Ward-68(6), Delhi

In the result, Ground no. 3 as raised by the assessee deserves to be allowed and the impugned addition cannot be sustained

ITA 2650/DEL/2024[2012-13]Status: DisposedITAT Delhi06 Aug 2025AY 2012-13

Bench: Justice (Retd.) C.V. Bhadang(), Shri Mahavir Singh & Shri Brajesh Kumar Singh[Assessment Year: 2012-13] Mahesh Kumar, Vs Ito, 6/305/1A, Doonger Ward-68(6), Mohalla, Delhi-110032. Delhi. Pan-Aoopk6335A Appellant Respondent Appellant By Shri Neeraj Mangla, Ca Respondent By Shri Krishna K. Ramawat, Sr. Dr Date Of Hearing 06.08.2025 Date Of Pronouncement 06.08.2025

Section 10(38)Section 143(3)Section 147Section 148Section 68

Income as per ITR Rs.2,07,380/- Add:-Addition on account of LTCG u/s 68 as discussed above 10 Rs.9,60,000/- Add:-Addition u/s 68 as discussed above para 11 Rs.15,48,000/- Add:-Addition u/s 68 as discussed above para 12 Rs.20,62,375/- Taxable income Rs.47 ... basis of which the assessment was reopened and was added u/s 68 of the Act and had also made other additions u/s 68 of the Act in respect of unexplained money andcheque deposit amounting to Rs.15,48,000/-and u/s 69 of the Act in respect of unexplained 27 purchase

Kapoor Abhushan Palace Pvt. Ltd., New Delhi vs. ITO Ward 14(2), New Delhi

Appeal of the assessee is allowed

ITA 1729/DEL/2024[2017-18]Status: DisposedITAT Delhi06 Aug 2025AY 2017-18

Bench: Shri Mahavir Singh & Shri Manish Agarwal

Section 143(2)Section 143(3)Section 145(3)Section 250Section 68

year.” 9. From the perusal of the provisions of section 68 of the Act it is very clear that assessing officer can make addition u/s 68 only under two circumstances, i.e. (ij) Appellant does not offer any explanation about nature and source of such credit; or (ii) Explanation offered ... well as the sales. Since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. This view is also supported by the decision of Hon'ble Delhi High Court in the case

DCIT, Circle-34(1), Delhi vs. Mukeah Kumar Singla, Delhi

In the result, the appeal of the Revenue in ITA No

ITA 2225/DEL/2023[2016]Status: DisposedITAT Delhi06 Aug 2025

Bench: Ms. Madhumita Roy & Shri Naveen Chandra

For Appellant: NoneFor Respondent: Shri Manoj Tiwari, Sr. DR
Section 68Section 69C

assessment order and the submission made by the appellant were carefully examined and perused. It is observed that the AO made addition u/s 68 without mentioning the details of lenders in Page 3 of 7 ITA No. 2225/DEL/2023 [A.Y. 2016-17] Amit Behal Vs. ACIT which the confirmations, ledger accounts ... where the confirmation and bank account details were not provided for the loan received amounting to Rs. 2,44,461/-. Accordingly, the addition u/s 68 can be sustained only to The extent of Rs. 2,44,461/-. Page 4 of 7 ITA No. 2225/DEL/2023 [A.Y. 2016-17] Amit Behal

Shri Gunjan Kumar Bihani, Raipur vs. Income Tax Officer, Ward-3 (4), Raipur

In the result, the captioned appeal filed by the assessee is allowed in terms of the aforesaid observations

ITA 122/RPR/2025[2015-16]Status: DisposedITAT Raipur05 Aug 2025AY 2015-16

Bench: Shri Partha Sarathi Chaudhury & Shri Arun Khodpiaआयकर अपील सं. / Ita No.122/Rpr/2025 "नधा"रण वष" / Assessment Year : 2015-16 Shri Gunjan Kumar Bihani Ashoka Ratan, Khamhardih, Shankar Nagar, Raipur-492 009 (C.G) Pan: Ajupb5787C

For Appellant: Shri Sakshi Gopal Agrawal, CAFor Respondent: Dr. Priyanka Patel, Sr. DR
Section 124(3)Section 127Section 142(1)Section 143(2)Section 143(3)

Rs.20,01,997/- by applying peak credit theory instead of deleting the entire addition since the Id. AO had made the addition u/s 68 highly arbitrarily, unjustifiable and uncalled for. 4. Without prejudice to ground no. 1 & 2, the Id. CIT(A),NFAC has erred in determining the peak credit

Sameer Gehlaut, London vs. DCIT, Mumbai

In the result, appeal of the assessee is partly allowed

ITA 2532/MUM/2025[2017-18]Status: DisposedITAT Mumbai05 Aug 2025AY 2017-18

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Anikesh Banerjee, Hon'Ble

For Appellant: Shri Gautam Jain, A/RFor Respondent: Shri Satyaprakash R. Singh, CIT D/R
Section 144Section 147Section 251Section 251(1)Section 251(1)(a)Section 28

Finance Bill and also from the memorandum explaining the Finance Bill. 6.1. Secondly, this is not the case where the AO has made addition u/s 68 of the Act as unexplained cash credit and the onus is upon the assessee to prove the identity, genuineness of the transactions and creditworthiness

Shri Dinesh Sethi, Ludhiana vs. ITO, Ludhiana

The appeals are dismissed

ITA 338/CHANDI/2017[2006-07]Status: DisposedITAT Chandigarh04 Aug 2025AY 2006-07

Bench: Shri Rajpal Yadav & Shri Manoj Kumar Aggarwalआयकर अपील सं./ Ita No. 376/Chd/2014 & "नधा"रण वष" / Assessment Year : 2006-07 Shri Janesh Sethi, Legal Heir Of बनाम The Ito, Late Shri Dinesh Sethi, Ward – 1(1), Vs Prop. M/S R.S. Trading Corp., Ludhiana. C-434, Urban Estate Focal Point, Ludhiana. "थायी लेखा सं./Pan /Tan No: Aaqpk1200Q अपीलाथ"/Appellant ""यथ"/Respondent "नधा"रती क" ओर से/Assessee By : Shri Sudhir Sehgal, Advocate राज"व क" ओर से/ Revenue By : Shri Manav Bansal, Cit Dr तार"ख/Date Of Hearing : 23.06.2025 उदघोषणा क" तार"ख/Date Of Pronouncement : 04.8.2025

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Shri Manav Bansal, CIT DR
Section 131Section 142(1)Section 144Section 147Section 148Section 271(1)(c)Section 69A

Goyal, which is supported by an affidavit placed at page 60 of the paper book filed before the CIT(A) and, thus, the addition u/s 68 is not required to be made. vii) Copy of the bank account of 'M/s Shirdi Overseas Import & Export' is placed at pages

Sh. Dinesh Sethi, Ludhiana vs. ITO, Ludhiana

The appeals are dismissed

ITA 376/CHANDI/2014[2006-07]Status: DisposedITAT Chandigarh04 Aug 2025AY 2006-07

Bench: Shri Rajpal Yadav & Shri Manoj Kumar Aggarwalआयकर अपील सं./ Ita No. 376/Chd/2014 & "नधा"रण वष" / Assessment Year : 2006-07 Shri Janesh Sethi, Legal Heir Of बनाम The Ito, Late Shri Dinesh Sethi, Ward – 1(1), Vs Prop. M/S R.S. Trading Corp., Ludhiana. C-434, Urban Estate Focal Point, Ludhiana. "थायी लेखा सं./Pan /Tan No: Aaqpk1200Q अपीलाथ"/Appellant ""यथ"/Respondent "नधा"रती क" ओर से/Assessee By : Shri Sudhir Sehgal, Advocate राज"व क" ओर से/ Revenue By : Shri Manav Bansal, Cit Dr तार"ख/Date Of Hearing : 23.06.2025 उदघोषणा क" तार"ख/Date Of Pronouncement : 04.8.2025

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Shri Manav Bansal, CIT DR
Section 131Section 142(1)Section 144Section 147Section 148Section 271(1)(c)Section 69A

Goyal, which is supported by an affidavit placed at page 60 of the paper book filed before the CIT(A) and, thus, the addition u/s 68 is not required to be made. vii) Copy of the bank account of 'M/s Shirdi Overseas Import & Export' is placed at pages