“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

Riven Health Club Pvt. Ltd., Faridabad vs. ITO Ward-2(2), Faridabad

In the result, the appeals of the assesses are allowed

ITA 103/DEL/2021[2016-17]Status: DisposedITAT Delhi06 Nov 2024AY 2016-17

Bench: Sh. S. Rifaur Rahman & Sh. Sudhir Kumarassessment Year: 2016-17 People Care Hospitals Private Vs Ito Limited, Plot No.1066, Baba Ward- 2 (1) Nagar, Near Janta Barat Ghar, Faridabad Old Faridabad, Haryana 121002 Pan No.Aagcp8745G (Appellant) (Respondent) Assessment Year: 2016-17 Geranium Barkers Pvt. Ltd. Vs Ito 103/B, Near Shyamji Mandir Ward-1 (3) Malerna Road, Adarsh Nagar, Faridabad Ballabgarh Haryana -122004 Pan No.Aafcg3396P (Appellant) (Respondent) Assessment Year: 2016-17 Riven Health Club Pvt. Ltd. Vs Ito Ff-9, Vishnu Place Near Ward- 2 (2) Neelam Flyover Sector-20B Faridabad Faridabad Haryana121001 Pan No. Aagcr1343A (Appellant) (Respondent) Appellants By Sh. Rajeev Saxena, Advocate Ms. Sumangla Saxena, Advocate Sh. Dishant Sethi, Advocate

Section 131oSection 142(1)Section 143Section 143(2)Section 143(3)Section 251(1)Section 271(1)(c)Section 56(2)(viib)Section 68

Discounted Cash Flow Method. 3. That the Ld. CIT(A) has grossly erred in law as well as on facts in sustaining addition u/s 68 of the Act and enhancing the income of appellant on protective basis u/s 56(2)(viib) r.w.r 11UA of IT rules without appreciating the fact ... Coordinate Bench in case of M/s. Dayalu Iron & Steel Pvt. Ltd. (supra) has held as under :- "12. The Ld. A.O while making an addition u/s 68 of the Act raised question over the ne of the transaction source of funds invested. Further held that, the investor companies do not have

Geranium Bakers Private Lmited, Ballabhgarh vs. ITO Ward-1(3), Faridabad

In the result, the appeals of the assesses are allowed

ITA 102/DEL/2021[2016-17]Status: DisposedITAT Delhi06 Nov 2024AY 2016-17

Section 131oSection 142(1)Section 143Section 143(2)Section 143(3)Section 251(1)Section 271(1)(c)Section 56(2)(viib)Section 68

ACIT Central Circle 2(1), Chennai vs. K.C.P.Shivaraman, Karur

In the result, the appeal stands dismissed

ITA 2183/CHNY/2018[2008-09]Status: DisposedITAT Chennai05 Nov 2024AY 2008-09

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.2183/Chny/2018 (िनधा)रण वष) / Assessment Year: 2008-09) Acit Shri K.C.P. Shivaraman बनाम/ Central Circle-2(1), #330, Chinna Andan Koil Road, Vs. Chennai. Karur-639 001. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaxps-4844-F (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri Nilay Baran Som (Cit)-Ld. Dr " थ"कीओरसे/Respondent By : Shri S. Sridhar (Advocate)-Ld. Ar सुनवाईकीतारीख/Date Of Hearing : 10-09-2024 घोषणाकीतारीख /Date Of Pronouncement : 05-11-2024 आदेश / O R D E R

For Appellant: Shri Nilay Baran Som (CIT)-Ld. DRFor Respondent: Shri S. Sridhar (Advocate)-Ld. AR

Section 143(3)Section 147

made in respect thereof. 3.2 The order was subjected to revision u/s 263 vide order dated 08- 08-2014 wherein the issue of addition u/s 68 with respect to an entity M/s Pacific Chennai Infrastructure Pvt. Ltd. was flagged. The same was given effect to vide an assessment order u/s ... identity of the lender, its creditworthiness as well as genuineness of the transactions. The debt was settled subsequently and no case of addition u/s 68 could be made out against the assessee. It is trite law that no addition could be made merely on the basis of suspicion, conjectures

Sahil Singla, Chandigarh vs. Asstt. Commissioner of Income Tax, CC-2, Chandigarh

In the result, appeal of the Assessee is allowed

ITA 1018/CHANDI/2024[2018-19]Status: DisposedITAT Chandigarh04 Nov 2024AY 2018-19

Bench: SHRI. AAKASH DEEP JAIN (Vice President), SHRI. SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri T.N. Singla, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR

Section 271ASection 68Section 69Section 69A

individual, he was not required to maintain regular books of account as per the relevant provisions of the Income Tax Act. Hence, the addition u/s 68 of the Act cannot be made in the case of the appellant, as the impugned amount of Rs. 1,40,00,00/- was credited

The Deputy Commissioner of Income Tax, Central Circle-2, Visakhapatnam vs. Poosarla Satyavathi, Vizianagaram

In the result, appeal of the revenue is dismissed in limine and Cross objection filed is assessee is dismissed as infructuous

ITA 117/VIZ/2021[2014-15]Status: DisposedITAT Visakhapatnam30 Oct 2024AY 2014-15

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Ble

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 56(2)(viib)Section 68

Appeals) is not correct in giving direction to the Assessing Officer to enhance the assessed income by making further addition u/s 68 of the IT Act, since such direction runs counter to the provisions of law, therefore, the same is liable to be deleted.” 7. At the time of hearing

Linton Projects Private Limited, Vizianagaram vs. The Income Tax Officer, Ward-1, Vizianagaram

In the result, appeal of the revenue is dismissed in limine and Cross objection filed is assessee is dismissed as infructuous

ITA 227/VIZ/2020[2014-15]Status: DisposedITAT Visakhapatnam30 Oct 2024AY 2014-15

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Ble

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 56(2)(viib)Section 68

Income Tax Officer -19(2)(2), Mumbai vs. Kamlesh Gupta and Sons HUF, Mumbai

In the result, the appeal filed by the Revenue Department stands dismissed, whereas the appeal filed by the Assessee stands allowed for statistical purposes

ITA 4187/MUM/2024[2016-17]Status: DisposedITAT Mumbai30 Oct 2024AY 2016-17

Bench: Shri Narender Kumar Choudhry & Shri Gagan Goyalassessment Year: 2016-17

For Appellant: Shri Sumit Mantri, A.RFor Respondent: Shri G. Santosh Kumar, Sr. AR

Section 142(1)Section 144Section 250Section 36(1)(iii)Section 68

held that the addition of the opening balance cannot be made in the current assessment year as it is well settled law that addition u/s 68 of the Act can be made only during the year in which such credit has been received and if the credit balance appearing ... account of the Assessee is not pertaining to the year under consideration then the addition u/s 68 of the Act cannot be made”. 4.1 The Ld. Commissioner by considering the aforesaid facts and circumstances ultimately directed the AO to verify the opening balance of unsecured loans from the returns

Kamlesh Gupta and Sons HUF, Mumbai vs. The Income Tax Officer Ward 19(2)(2), Mumbai

In the result, the appeal filed by the Revenue Department stands dismissed, whereas the appeal filed by the Assessee stands allowed for statistical purposes

ITA 4079/MUM/2024[2016-17]Status: DisposedITAT Mumbai30 Oct 2024AY 2016-17

Bench: Shri Narender Kumar Choudhry & Shri Gagan Goyalassessment Year: 2016-17

For Appellant: Shri Sumit Mantri, A.RFor Respondent: Shri G. Santosh Kumar, Sr. AR

Section 142(1)Section 144Section 250Section 36(1)(iii)Section 68

Heritage Hospitals Ltd, New Delhi vs. DCIT, Circle-11(1), New Delhi

ITA 4090/DEL/2018[2014-15]Status: DisposedITAT Delhi30 Oct 2024AY 2014-15

Bench: Ms. Madhumita Roy & Shri Naveen Chandra

For Appellant: Shri Anand Kumar Pandey, AdvFor Respondent: Shri Sandeep Kumar Mishra, Sr. DR

Section 142(1)Section 143(2)Section 143(3)Section 68

through banks neither establishes the identity of the investor nor the genuineness of the transaction. It is settled law, in the context of addition u/s 68, merely filing the primary documents such as ITRs, PAN, RoC etc is not sufficient to discharge the onus to establish creditworthiness of investor companies ... similar facts, the Hon’ble Supreme Court in NDR Promoters Pvt Ltd V PCIT [2019] 109 taxmann.com 53 (SC)had upheld the addition u/s 68 in facts where assessee had failed to produce directors of shareholder companies, though directors had filed confirmations and, therefore, were in touch with assessee. This

Subhash Kumar Kedia, Hyderabad vs. Asst. Commissioner of Income Tax Central Circle-3(1), Hyderabad

In the result, appeal filed by the assessee in ITA

ITA 707/HYD/2020[2015-16]Status: DisposedITAT Hyderabad29 Oct 2024AY 2015-16

Bench: Shri Manjunatha, G. & Shri K. Narasimha Charyआ.अपी.सं /Ita No.707/Hyd/2020 (िनधा"रण वष"/Assessment Year: 2015-16) Shri Subhash Kumar Kedia Vs. Asstt. C. I. T. Hyderabad Central Circle 3(1) Pan:Afvpk8915Q Hyderabad (Appellant) (Respondent) आ.अपी.सं /Ita No. 405/Hyd/2020 (िनधा"रण वष"/Assessment Year: 2015-16) Vs. Shri Bikash Kumar Asstt. C. I. T. Kedia Hyderabad Central Circle 3(1) Pan:Afapk8794E Hyderabad (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri P Murali Mohan Rao, Ca राज" व "ारा/Revenue By:: Shri Vamshi Krishna, Dr सुनवाई की तारीख/Date Of Hearing: 09/10/2024 घोषणा की तारीख/Pronouncement: 29/10/2024 आदेश/Order Per Manjunatha, G. A.M These Two Appeals Filed By Different Assessees Are Directed Against The Separate, But Identical Orders Dated 31/01/2020 Of The Learned Cit (A)-11, Hyderabad Relating To Page 1 Of 33

For Appellant: Shri P Murali Mohan Rao, CAFor Respondent: : Shri Vamshi Krishna, DR

Section 143(3)Section 153ASection 68

basis of information received from third party i.e., DIT (Invn.) Kolkata. (f) The Ld. CIT(A) ought to have appreciated that the addition u/s 68 of the Act has been made by the Assessing Officer not based on the "incriminating material" but based on the analysis of the financial position ... Durga Prasad More v. CIT which are distinguishable on facts and in holding that the Assessing Officer had rightly made the addition u/s 68 of the Act for Rs. 547,80,269/-. 9. (a) Without prejudice to other grounds, the Ld. CIT(A) ought to have appreciated that the consideration

Bikash Kumar Kedia, Hyderabad vs. Asst. Commissioner of Income Tax, Central Circle-3(1), Hyderabad

In the result, appeal filed by the assessee in ITA

ITA 405/HYD/2020[2015-16]Status: DisposedITAT Hyderabad29 Oct 2024AY 2015-16

For Appellant: Shri P Murali Mohan Rao, CAFor Respondent: : Shri Vamshi Krishna, DR

Section 143(3)Section 153ASection 68

Shri Rajesh Pranlal Ghatalia, Mumbai vs. ITO Ward-24(3)(1), Mumbai

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

ITA 2483/MUM/2024[2017-18]Status: DisposedITAT Mumbai29 Oct 2024AY 2017-18

Bench: Shriom Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm Shri Rajesh Pranlal Ghatalia Ito Ward-24(3)(1) Room No. 616, 6Th Floor, 1501/2B Wing, Highland Park Chs 350, Lokhandwala Complex, Vs. Piramal Chamber, Lalbaug, Andheri (W), Mumbai-400 053 Mumbai-400 014

For Appellant: Shri Amit & Dharmil JhaveriFor Respondent: Shri R. R. Makwana

Section 115BSection 143(2)Section 143(3)Section 234ASection 250Section 271(1)(c)Section 68

faceless regime. Ground No 2: Unexplained cash credit u/s 68 worth Rs 2,83,93,367/-  The Ld ITO not justified in making addition u/s 68 for the cash credit treating the same as unexplained cash credit.  The said fact is incorrect as the assessee has already explained the same ... nature of the credit is explained by the assessee and party from whom the same has been received is also placed on record addition u/s 68 is unjustified and unwarrented. Ground No 3: Levying Maximum rate of Tax:  The Ld. ITO not justified in levying the maximum rate

Shri Prakash Jiwandas Wanjari, Nagpur vs. Joint Commissioner of Income Tax, Nagpur

In the result, we are of the considered view that the case on hand does not warrant levy of penalty under Section 271D of the Act

ITA 232/NAG/2022[2011-12]Status: DisposedITAT Nagpur25 Oct 2024AY 2011-12

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Mahavir AtalFor Respondent: Shri Abhay Y. Marathe

Section 143(3)Section 147Section 148Section 269SSection 271DSection 273ASection 80C

credit entries of cash deposit in bank account as cash loans accepted by the appellant, hence he has not make any addition u/s 68 or 69 of the Act. 2.9 The AO in the original assessment accepted the contention of the appellant, the Addl./Joint CIT now has initiated

Deputy Commissioner of Income Tax, Central Circel-1(2, Nagpur vs. M/S. Vibrant Global Capital Ltd., Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 229/NAG/2022[2014-15]Status: DisposedITAT Nagpur25 Oct 2024AY 2014-15

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Kishore P. DewaniFor Respondent: Shri Sandipkumar Salunke

Section 143(3)Section 14ASection 68

order of CIT(A) has made no adverse observation as to receipt of loan from such parties to justify addition u/s 68. No shred of evidence is brought on record or any adverse finding is recorded to discredit legal evidence on record. D) Onus to explain the credits has been ... Department has accepted the decision and appellate order has achieved finality. It substantiates the submission of assessee that no addition u/s 68 can be made P- 35 & 36 of impugned order in appeal. F) Page 60 & 61 of impugned order of CIT(A) indicates remarks of A.O. in remand report

M/S Reform Realty & Logistics Development Private Limited, Chennai vs. DCIT, Central Circle-1(2), Chennao

In the result, the appeal of the assessee is allowed

ITA 437/CHNY/2023[2016-17]Status: DisposedITAT Chennai25 Oct 2024AY 2016-17

Bench: Shri Ss Viswanethra Ravi & Shri Jagadishआयकर अपील सं./Ita No.437/Chny/2023 िनधा8रण वष8 /Assessment Year: 2016-17

For Appellant: Shri Rakesh Joshi, C.A HIFor Respondent: Shri R. Clement Ramesh Kumar, CIT

Section 115BSection 132Section 143(3)Section 153ASection 68

decision of Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell (P.) Ltd. [2023] 454 ITR 212 (SC), addition u/s 68 on the basis of regular books of account cannot be sustained The Ld. AR has argued that the addition has been made on the basis

Ambaji Avenues Private Limited, Mumbai vs. Income Tax Officer, Ward-9(1)(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3922/MUM/2024[2012-13]Status: DisposedITAT Mumbai25 Oct 2024AY 2012-13

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhailassessment Year: 2012-13 Ambaji Avenues Private Limited Income Tax Officer- 9(1)(2), Mumbai A-109, Akshay Mittal Indl. Premises, M.V. Road, Sanjay Vs. Building No. 5, Andheri (W), Mumbai-400059. Pan: Aajca 8264 G (Appellant) (Respondent) Present For: Assessee By : Shri Ramesh Kumar Malpani Revenue By : Shri Manoj Kumar Sinha, Sr. Dr Date Of Hearing : 09.09.2024 Date Of Pronouncement : 25.10.2024 O R D E R Per Amarjit Singh: This Appeal Of The Assessee For The Assessment Year 2012-13 Is Directed Against The Order Dated 19.06.2024 Passed By The Ld. Commissioner Of Income-Tax (Appeal), Nfac, Delhi. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: Shri Ramesh Kumar MalpaniFor Respondent: Shri Manoj Kumar Sinha, Sr. DR

Section 143(3)Section 147Section 148Section 68

reasons recorded wherein the AO has mentioned that earlier assessment was completed u/s 144 r.w.s. 147 of the Act after making an addition u/s 68 of the Act amounting to Rs. 25,00,000/- on account of accommodation entries received by the assessee company from M/s. Harsharatna Finance & Investment

Assistant Commissioner of Income Tax 4(1)(1), Mumbai vs. Ankur Agrawal, Mumbai

In the result, the appeal of the revenue is dismissed

ITA 2308/MUM/2024[2011-12]Status: DisposedITAT Mumbai25 Oct 2024AY 2011-12

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhailassessment Year: 2011-12 Acit 4(1)(1), Mumbai Ankur Agrawal 2401, 2402, Anmol Pride, Opp. Vs. Patel Auto Petrol Pump, Off Sv Road Goregaon West, Mumbai- 400062. Pan: Akopa 7201 P (Appellant) (Respondent)

For Appellant: Shri Neelkanth KhandelwalFor Respondent: Shri Ajay Chandra, CIT, DR

Section 143(1)Section 143(3)Section 147Section 148Section 250Section 271(1)(c)Section 68

assessee with such a liability under Section 68. The AO failed to carry his suspicion to logical conclusion by further investigation and therefore addition u/s 68 was not sustainable.” 16.9 The Hon'ble Punjab & Haryana High Court in a recent judgment in the case of CIT vs Jawaharlal Oswal ... conducted by the AO, cogent material to be brought on record before taking an adverse view against the appellant and making addition u/s 68 of the Act. 21. Judgement of Hon'ble Apex Court in case of NRA Iron & Steel Pvt. Ltd. vs PCIT:- The relevant part is reproduced below

Agarwal Chem Products (India) Pvt Ltd, Mumbai vs. DCIT Circle 6(1)(1), Mumbai

In the result, the appeal of the assessee is allowed for statistical purpose

ITA 3788/MUM/2024[2018-19]Status: DisposedITAT Mumbai24 Oct 2024AY 2018-19

Bench: Shri Amit Shukla & Smt. Renu Jauhriagarwal Chem Products V/S. Dcit Circle 6(1)(1) बनाम (India) Pvt. Ltd. 563, 5Th Floor, 105/106, Parshwa Aayakar Bhawan, Chamber, 17/21 Issaji Maharishi Karve Road, Street Vadgadi, Mumbai-400020 Masjid Bunder, Mumbai-400003 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aadca1085H Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Suchek AnchaliyaFor Respondent: Shri Manoj Kumar Sinha

Section 147Section 148Section 250Section 68Section 69C

assessee. After considering assessee’s reply, the AO held that the assessee could not establish the genuineness of the transactions, and accordingly, an addition u/s 68 was made in respect of Rs. 51,97,500/- being bogus sales made to M/s. Advance Computers and Mobiles

Nitin Agarwal, Delhi vs. ITO, Ward-51(5), Delhi

ITA 1805/DEL/2024[2017-18]Status: DisposedITAT Delhi23 Oct 2024AY 2017-18

Bench: Shri Anubhav Sharma & Shri Brajesh Kumar Singhassessment Year: 2017-18

Section 115BSection 143(3)Section 271ASection 68

substantially established on the basis of financials that there is a direct nexus of the cash sales with the closing stock, then addition u/s 68 of the Act is not justified. During demonetization period it was quite possible that the cash sales would increase for the reason also that customers

Rajesh Doulatram Bhatia, Mumbai vs. ACIT-24(3), Mumbai

ITA 651/MUM/2024[2015-16]Status: DisposedITAT Mumbai22 Oct 2024AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Sunil Kumar Singh ()

Section 131(1)(d)Section 143(3)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SUNIL