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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

Ismailbhai Savdibhai Hira, Ahmedabad vs. The ITO, Ward-5(3)(1), Ahmedabad

In the result, all the four appeals of the assessee are allowed

ITA 206/AHD/2024[2011-12]Status: DisposedITAT Ahmedabad28 Mar 2025AY 2011-12

Bench: Ms. Suchitra R. Kamble & Shri Makarand V. Mahadeokar, Accountnat Member

Section 132Section 153CSection 271(1)(c)Section 68Section 69

issued thereby recording the reasons for re-opening on 27.02.2015 and thereafter the assessee filed his return of income. The Assessing Officer made addition u/s 68 of the Act in respect of cash/clearing deposits in bank account with Bank of India and also made addition related to the same section

Ismailbhai Savdibhai Hira, Ahmedabad vs. The ITO, Ward-5(3)(1), Ahmedabad

In the result, all the four appeals of the assessee are allowed

ITA 205/AHD/2024[2010-11]Status: DisposedITAT Ahmedabad28 Mar 2025AY 2010-11

Bench: Ms. Suchitra R. Kamble & Shri Makarand V. Mahadeokar, Accountnat Member

Section 132Section 153CSection 271(1)(c)Section 68Section 69

issued thereby recording the reasons for re-opening on 27.02.2015 and thereafter the assessee filed his return of income. The Assessing Officer made addition u/s 68 of the Act in respect of cash/clearing deposits in bank account with Bank of India and also made addition related to the same section

Ismailbhai Savdibhai Hira, Ahmedabad vs. The ITO, Ward-5(3)(1), Ahmedabad

In the result, all the four appeals of the assessee are allowed

ITA 204/AHD/2024[2009-10]Status: DisposedITAT Ahmedabad28 Mar 2025AY 2009-10

Bench: Ms. Suchitra R. Kamble & Shri Makarand V. Mahadeokar, Accountnat Member

Section 132Section 153CSection 271(1)(c)Section 68Section 69

issued thereby recording the reasons for re-opening on 27.02.2015 and thereafter the assessee filed his return of income. The Assessing Officer made addition u/s 68 of the Act in respect of cash/clearing deposits in bank account with Bank of India and also made addition related to the same section

M/S. Om Shanti Housing, Mumbai vs. Income Tax Officer Ward 20(2)(3), Mumbai

In the result appeal filed by the assesse stands allowed

ITA 672/MUM/2025[2017-18]Status: DisposedITAT Mumbai28 Mar 2025AY 2017-18

Bench: Smt. Beena Pillai () & Shri Girish Agrawal ()

Section 143Section 44A

therefore dealt together for sake of convenience I proceed to rule as under. 5.1 From the assessment order I find that AO made addition u/s 68 loan taken from following 8 parties viz. Divyanshi Gems P Ltd Rs. 3,09,00,000/-/-, Manbhawan Exim P Ltd. Rs. 2.00.00.000/- Siddham Gems

ACIT, Mumbai vs. Praful Manilal Shah, Mumbai

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

ITA 3572/MUM/2024[2020]Status: DisposedITAT Mumbai28 Mar 2025

Bench: Smt. Beena Pillai () & Shri Girish Agrawal ()

Section 270ASection 68

bogus liability holding that the assessee has not raised any fresh loan during the AY 2020-21 whereas the AO has not made addition u/s 68 as can be seen from the fact that penalty 2 ITA No.3572/Mum/2024; A.Y. 2020-21 Praful Manilal Shah under section 270A for misreporting

ITO-10(3)(1), Mumbai vs. Navkiran Developers Pvt. Ltd., Mumbai

ITA 2908/MUM/2024[2010-11]Status: DisposedITAT Mumbai28 Mar 2025AY 2010-11

Bench: Shri Narender Kumar Choudhryassessment Year: 2010-11

For Appellant: Shri Vimal Punmiya, Ld. A.RFor Respondent: Shri V.K. Chaturvedi, Ld. Sr. D.R
Section 132Section 132(4)Section 142(1)Section 147Section 250Section 68

record to negate the documentary evidences. 6.2.2 I have gone through the above. It is evident that the Assessing Officer has made the addition u/s 68 of the I.T. Act. In order to prove the credits, the appellant needs to prove the following a. Identity of the Creditor b. Capacity ... proceedings has submitted that in respect of the following cases, wherein the facts of the case are identical to the appellant's facts, addition u/s 68 was deleted, as under: (1) Hon'ble Jurisdictional ITAT Mumbai in the case of Bharti Lifestyle Pvt. Ltd. Vs. Income Tax Officer

Rekha Rajesh Jogani, Mumbai vs. ITO 19(3)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 2916/MUM/2023[2014-15]Status: DisposedITAT Mumbai28 Mar 2025AY 2014-15

Bench: Shri Saktijit Dey, Hon’Ble & Shri Girish Agrawalassessment Year: 2014-15

For Appellant: Shri. Sashank Mehta, CAFor Respondent: Mr. R. R. Makwana, Addl. CIT
Section 10(38)Section 143(3)Section 274Section 68Section 69C

wing, without pinpointing anything specific towards assessee, in this regard. 4.2. Ld. Assessing Officer, thus completed the assessment by making an addition u/s 68 of the Act towards entire sale consideration of Rs. 45,21,595/- received by the assessee on the transaction of sale of shares in the aforesaid

The Indian Hotels Company Ltd, Mumbai vs. Asst CIT Cir 2(2), Mumbai

Accordingly, Ground No.1 and 4 raised by the Assessee is allowed while all the other grounds raised by the Assessee are dismissed as having being rendered infructuous

ITA 5653/MUM/2011[1998-99]Status: DisposedITAT Mumbai28 Mar 2025AY 1998-99

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri V. Sridharan, Sr. AdvocateFor Respondent: Shri Hemanshu Joshi
Section 143(3)Section 147Section 234BSection 250Section 68

natural justice 6. On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in confirming an addition u/s 68 of the Act, of USD 1.75 million (equivalent to Rs 6,25,61,785) received on account of operating fees, already recognised as income ... earlier year. 7. On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in confirming an addition u/s 68 of the Act, of Rs 1,05,34,940 received on account of operating fees, already recognised as income on accrual basis

Income Tax Officer Indore 5(1), Indore vs. Umang Developers, Indore

Appeals are dismissed

ITA 503/IND/2023[2018-19]Status: DisposedITAT Indore27 Mar 2025AY 2018-19

Bench: Shri Pawan Singh & Shri B.M. Biyani

Section 139Section 143(2)Section 143(3)Section 253(5)

fact, the AO has extracted a list of as many as 11 loans aggregating to Rs. 1,14,39,825/- and made addition u/s 68 treating the same as unexplained due to non-filing of evidences by assessee. 30. During first-appeal, the assessee filed additional evidences ... That apart, the interest is allowable as deduction in terms of section 37 read with section 40(b). Thus, there cannot be any addition u/s 68 qua the interest credited in Partners’ Capital A/cs. Being so, the order passed by CIT(A) deleting the entire addition

Income Tax Officer 5(1), Indore vs. Umang Developers, Indore

Appeals are dismissed

ITA 502/IND/2023[2017-18]Status: DisposedITAT Indore27 Mar 2025AY 2017-18

Bench: Shri Pawan Singh & Shri B.M. Biyani

Section 139Section 143(2)Section 143(3)Section 253(5)

fact, the AO has extracted a list of as many as 11 loans aggregating to Rs. 1,14,39,825/- and made addition u/s 68 treating the same as unexplained due to non-filing of evidences by assessee. 30. During first-appeal, the assessee filed additional evidences ... That apart, the interest is allowable as deduction in terms of section 37 read with section 40(b). Thus, there cannot be any addition u/s 68 qua the interest credited in Partners’ Capital A/cs. Being so, the order passed by CIT(A) deleting the entire addition

Kolhapur Timber and Furniture Mart, Kolhapur vs. ACIT, Central Circle, Kolhapur

In the result, the appeal of assessee is allowed

ITA 2697/PUN/2024[2019-2020]Status: DisposedITAT Pune27 Mar 2025AY 2019-2020

Bench: SHRI MANISH BORAD (Accountant Member), SHRI S. S. VISWANETHRA RAVI (Judicial Member)

For Appellant: Shri S. N. PuranikFor Respondent: Shri Manoj Tripathi
Section 115BSection 133ASection 143(2)Section 143(3)Section 234Section 68

appellant raised following grounds of appeal :- “1. Commissioner of Income Tax (Appeals) has erred in confirming the alleged excess stock found in Survey, addition u/s 68. 2 Appellant prays to hold that Sec.68 has no application. Appellant prays to cancel the applicability of Sec.115BBE accepting the same as Business Income

ITO, Ward- 2(1), New Delhi vs. Aj Energy Pvt. Ltd., Delhi

ITA 6338/DEL/2017[2014-15]Status: DisposedITAT Delhi27 Mar 2025AY 2014-15

Bench: Shri S Rifaur Rahman & Shri Sudhir Pareek

For Appellant: Shri Ved Jain, Adv. &For Respondent: Shri Amit Katoch, SR. DR
Section 131Section 133(6)Section 142(1)Section 143(2)Section 68

creditworthiness of the share applicant and the genuineness of the transaction and the Ld. AO could not met any contrary findings then addition U/s 68 cannot be made by the AO. 14. The Ld. AR vehemently argued that in the case of Nova Promoters, which is relied upon

DCIT(CC)-2(4), Mumbai vs. Aveo Pharmaceuticals Private Limited, Mumbai

ITA 3009/MUM/2024[2020-21]Status: DisposedITAT Mumbai26 Mar 2025AY 2020-21

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

For Appellant: None
Section 68Section 69C

addition In the circumstances, such cash receipts are liable to be addition In the circumstances, such cash receipts are liable to be addition u/s 68 of the Act. The expenses whi u/s 68 of the Act. The expenses which are explained by way of the ch are explained

DCIT(CC)-2(4), Mumbai. vs. Aveo Pharmaceuticals Private Limited, Mumbai

ITA 3008/MUM/2024[2021-22]Status: DisposedITAT Mumbai26 Mar 2025AY 2021-22

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

For Appellant: None
Section 68Section 69C

addition In the circumstances, such cash receipts are liable to be addition In the circumstances, such cash receipts are liable to be addition u/s 68 of the Act. The expenses whi u/s 68 of the Act. The expenses which are explained by way of the ch are explained

Kwality Animal Feeds Private Limited, Belgaum vs. ACIT Circle 1 Belgaum, Belgaum

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

ITA 217/PAN/2023[2017-18]Status: DisposedITAT Panaji25 Mar 2025AY 2017-18

Bench: Shri Pavan Kumar Gadale & Shri G D Padmahshalii T A. Nos. 217/Pan/2023 (A.Y. 2017-18) Kwality Animal Feeds Pvt Ltd, Vs Acit-Circle 1, 12, Kwality House, Civil Hospital Road, . Machhe Industrial Area, Belagavi-590001. Machhe, Karnataka. Belgaum-590014, Karnataka. Pan .No. Aabck0589J (अपीलाथ"/Appellant) (""यथ"/Respondent)

Section 68

material on record. The sole crux of the disputed issues envisaged by the Ld.AR that the CIT(A) has erred in sustaining the addition u/s 68 of the Act without providing proper opportunity and overlooking the facts and material evidences. The assesse has filed all the details before the lower

Mahendra Sharma, Jaipur vs. ITO, Ward-3(1), Jaipur

In the result, the appeal of the assessee is allowed

ITA 654/JPR/2023[2011-12]Status: DisposedITAT Jaipur25 Mar 2025AY 2011-12
For Appellant: Shri Sarwan Kumar Gupta, AdvFor Respondent: Shri Anup Singh, Addl.CIT
Section 143(2)Section 143(3)Section 147Section 148Section 151Section 250Section 68

such notice was issued and therefore order is bad. ACIT vs. Hotel Blue Moon (2010) 321 ITR 362 (SC). 8. Addition u/s 68 : (a) That the learned Authorities below have grossly erred in law and facts in invoking section 68 without jurisdiction and per- sea illegal because this section

Income Tax Officer, Chennai vs. Ambattur Constructions Private Limited, Chennai

Appeal stands dismissed

ITA 288/CHNY/2024[2017-18]Status: DisposedITAT Chennai25 Mar 2025AY 2017-18

Bench: Hon’Ble Shri Aby T. Varkey, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.288/Chny/2024 (िनधा*रणवष* / Assessment Year: 2017-18) Ito M/S. Ambattur Constructions Pvt. Ltd. बनाम/ Corporate Ward-1(1) 86E-2, Industrial Estate, Vs. Chennai. Ambattur, Chennai-600 058. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaca-7390-N (अपीलाथ"/Appellant) : (" थ" / Respondent) & 2. Cross Objection No.47/Chny/2024 (In Ita No.288/Chny/2024) (िनधा*रण वष* / Assessment Year: 2017-18) M/S. Ambattur Constructions Pvt. Ltd. Ito (Merged With Ambattur Infra India Pvt. Ltd.) बनाम/ Corporate Ward-1(1), 86E-2, Industrial Estate, Vs. Chennai. Ambattur, Chennai-600 058. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaca-7390-N (Cross-Objector) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Assessee By : Shri T. Banusekar (Advocate) - Ld. Ar " थ"कीओरसे/Revenue By : Smt. D. Babitha (Jcit) - Ld. Sr. Dr सुनवाईकीतारीख/Date Of Hearing : 23-01-2025 घोषणाकीतारीख /Date Of Pronouncement : 25-03-2025

For Appellant: Shri T. Banusekar (Advocate) - Ld. ARFor Respondent: Smt. D. Babitha (JCIT) - Ld. Sr. DR
Section 143(3)Section 147Section 148Section 68

Accordingly, the same was added as business income u/s 28(ii) and the assessment was finalized. Pertinently, the assessment was reopened to make addition u/s 68 but ultimately Ld. AO has made no such addition and he has ended up making addition u/s 28(ii). Appellate Proceedings 3.1 The assessee ... have valid jurisdiction to reopen the case of the assessee. 5. We also find that pertinently the assessment was reopened to make addition u/s 68 but ultimately Ld. AO has made no such addition and he has ended up making addition u/s 28(ii). In such a case, the ratio

Usha Hitesh Sanghvi, Girgaon S.O, Mumbai vs. ITO-19(3)(5), Mumbai, Lal Baug

Appeal of the assessee is allowed

ITA 6172/MUM/2024[2013-14]Status: DisposedITAT Mumbai25 Mar 2025AY 2013-14

Bench: Shri Saktijit Dey & Shri Prabhash Shankar

For Appellant: Shri Rajkumar Singh, ARFor Respondent: Ms. Kavitha Kaushik (Sr. DR)
Section 10(38)Section 143(3)Section 148Section 68Section 69C

Appeal), NFAC has erred in denying the claim of exemption u/s 10(38) and thereby sustaining the addition u/s 68 at Rs.76,13,000/- made by the Ld. A.O. treating the sale proceeds of listed long-term equity shares, acquired through dealings on recognised stock exchange through registered brokers subjected ... Mumbai Tribunal)(SB).Similar view has been taken recently in January 2021by hon'ble Delhi High Court holding & propounding that no addition u/s 68 in respect of alleged penny stock sale is justified in the case of PCIT vs. Smt. Krishna Devi (ITA No. 125/2020, dt. 15/01/2021, Delhi) as below

Assistant Commissioner of Income Tax, Central Circle -3, Surat vs. Bharatbhai Kanjibhai Kakadiya, Surat

In the result, deletion of unsecured loan of Rs

ITA 391/SRT/2023[2016-17]Status: DisposedITAT Surat24 Mar 2025AY 2016-17

Bench: Shri Pawan Singh & Shri Bijayananda Prusethआयकर अपील सं./Ita No.391/Srt/2023 Assessment Year: (2016-17) (Physical Court Hearing) Assistant Commissioner Of Bharatbhai Kanjibhai Kakadiya Income-Tax, Central Circle-3, Vs. 27, Hans Society, Varachha Road, Surat, Room No.507, 5Th Floor, Varachha, Surat-395 006 Aatyakar Bhawan, Majura Gate,Surat-395 001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Afmpk 5646 M (अपीलाथ"/Appellant) (""थ" /Respondent) आयकर अपील सं./Ita No.312/Srt/2023 Assessment Year: (2016-17) Bharatbhai Kanjibhai Kakadiya Assistant Commissioner Of 27, Hans Society, Varachha Road, Vs. Income-Tax, Central Circle-3, Varachha, Surat-395 006 Surat, Room No.507, 5Th Floor, Aatyakar Bhawan, Majura Gate,Surat-395 001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Afmpk 5646 M (अपीलाथ"/Appellant) (""थ" /Respondent)

Section 132(4)Section 147Section 250Section 44ASection 68

PCIT vs. Ambe Tradecorp (P.) Ltd. (2022) 145 taxmann.com 27 (Guj) and submitted that once repayment of loan is accepted by the Department, addition u/s 68 cannot be made. The submission of the assessee is reproduced at pages 14 to 21 of the appellate order. The decision ... furnished requisites material showing identity of loan givers and that assessee was not beneficiary as loan was repaid in subsequent year, no addition u/s 68 could be made on account of such loan. The repayment of loans in the present case has been accepted

Bharatbhai Kanjibhai Kakadiya, Surat vs. Assistant Registrar, Central Circle-3, Surat

In the result, deletion of unsecured loan of Rs

ITA 312/SRT/2023[2016-17]Status: DisposedITAT Surat24 Mar 2025AY 2016-17

Bench: Shri Pawan Singh & Shri Bijayananda Prusethआयकर अपील सं./Ita No.391/Srt/2023 Assessment Year: (2016-17) (Physical Court Hearing) Assistant Commissioner Of Bharatbhai Kanjibhai Kakadiya Income-Tax, Central Circle-3, Vs. 27, Hans Society, Varachha Road, Surat, Room No.507, 5Th Floor, Varachha, Surat-395 006 Aatyakar Bhawan, Majura Gate,Surat-395 001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Afmpk 5646 M (अपीलाथ"/Appellant) (""थ" /Respondent) आयकर अपील सं./Ita No.312/Srt/2023 Assessment Year: (2016-17) Bharatbhai Kanjibhai Kakadiya Assistant Commissioner Of 27, Hans Society, Varachha Road, Vs. Income-Tax, Central Circle-3, Varachha, Surat-395 006 Surat, Room No.507, 5Th Floor, Aatyakar Bhawan, Majura Gate,Surat-395 001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Afmpk 5646 M (अपीलाथ"/Appellant) (""थ" /Respondent)

Section 132(4)Section 147Section 250Section 44ASection 68

PCIT vs. Ambe Tradecorp (P.) Ltd. (2022) 145 taxmann.com 27 (Guj) and submitted that once repayment of loan is accepted by the Department, addition u/s 68 cannot be made. The submission of the assessee is reproduced at pages 14 to 21 of the appellate order. The decision ... furnished requisites material showing identity of loan givers and that assessee was not beneficiary as loan was repaid in subsequent year, no addition u/s 68 could be made on account of such loan. The repayment of loans in the present case has been accepted