“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

ACIT, CC-3, Ludhiana, Opp. Bvm School, Kitchlu Nagar vs. Jain Amar Clothings Pvt. Ltd., Chawal Bazar

In the result, the appeal of the Revenue is dismissed

ITA 17/CHANDI/2024[2014-15]Status: DisposedITAT Chandigarh15 Oct 2024AY 2014-15

Bench: Shri A.D. Jain & Shri Krinwant Sahayआयकर अपील सं./ Ita No. 17/Chd/2024 "नधा"रण वष" / Assessment Year : 2014-15 The Acit, Vs. Jain Amar Clothings Pvt. Ltd., Cc-3, बनाम 992/1, Pipal Building, Opp. Bvm School, Chawal Bazar, Kitchlu Nagar,, Ludhiana Ludhiana "थायी लेखा सं./Pan No: Aabcj8065G अपीलाथ"/ Appellant ""यथ"/ Repsondent

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Shri Rohit Sharma, CIT DR

addition on account of difference of 2.94% was applied on the declared turnover of Rs. 156,05,88,457/- resulting to an addition u/s 68 to the tune of Rs. 4,58,81,301/-. The first & foremost contention of the appellant is that this is an assessment framed

Naresh Bhojrajmal Parwani, Ahmedabad vs. The ACIT, Circle-3(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 1263/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad15 Oct 2024AY 2017-18

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyalassessment Year : 2017-18 Naresh Bhojrajal Parwani Vs. Acit, Cir.3(1) Naresh Textiles Ahmedabad. Sadhu Vaswani Mension Mirghavad Ahmedabad 380001. Pan : Ahupp 8536 D (Applicant) (Responent) : Shri Sakar Sharma, Ar Assessee By Revenue By : Shri Waghe Prasad Roa, Sr.Dr सुनवाई क" तारीख/Date Of Hearing : 15/10/2024 घोषणा क" तारीख /Date Of Pronouncement: 15/10/2024 आदेश/O R D E R आदेश आदेश आदेश

For Respondent: Shri Waghe Prasad Roa, Sr.DR

Section 115BSection 143(3)Section 250Section 44ASection 68

assessee in the appeal read as under: 1. The Ld. CIT(A)-NFAC erred on facts and in law in making addition u/s 68 r.w.s. 115BBE of the Act amounting to Rs.31,72,000/- by treating cash deposited in the bank account representing mainly cash sales without appreciating that neither

Bhavana Lalit Jain, Navi Mumbai vs. Income Tax Officer, WD-15(1)(1), Mumbai

The appeals are allowed

ITA 1016/MUM/2024[2014-15]Status: DisposedITAT Mumbai15 Oct 2024AY 2014-15

Bench: Shri Prashant Maharishi, Am & Shriraj Kumar Chauhan, Jm

Section 10Section 143Section 147Section 148Section 68

where the above addition is confirmed by them. Thus, orders of lower authorities are reversed. The ld. AO is directed to delete the addition u/s 68 of the act and allow assessee exemption u/s 10 (38) of the Act. Thus, ground no 2 & 3 of the appeals are allowed

Vipin Kumar Pitliya HUF, Ratlam vs. ITO, Ratlam

Appeal is allowed for statistical purpose

ITA 507/IND/2023[2017-18]Status: DisposedITAT Indore14 Oct 2024AY 2017-18

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2017-18 Shri Vipin Kumar Pitliya Huf, Ito-1, C/O: Rajesh Heeralal Mehta & Ratlam Co., Chartered Accountants, 203, बनाम/ Manas Bhawan Extn., Vs. 11, Rnt Marg, Near Hotel Shreemaya, Indore.

Section 143(2)Section 143(3)Section 68Section 69A

facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the addition u/s 68 of the Act as against section 69A of the Act was made by the ld. AO. Thus, the action of the Ld. CIT(A) in changing

Dinesh Prabhudas Hingoo, Jogeshwari (W), Mumbai vs. ACIT Circle-31(1), Mumbai

In the result, the appeal filed by the Assessee stands allowed

ITA 667/MUM/2024[2011-12]Status: DisposedITAT Mumbai11 Oct 2024AY 2011-12

Bench: Shri Narender Kumar Choudhry & Shri Girish Agrawalassessment Year: 2011-12

For Appellant: Shri Ravindra Poojari, A.RFor Respondent: Shri H.M. Bhatt, Sr. D.R

Section 10(38)Section 131Section 143(1)Section 148Section 250

penalty. Whereas the Assessee has been able to discharge its prima-facie onus cast upon him u/s 68 of the Act, therefore the addition u/s 68 of the Act is at all un- sustainable. 10.5 As we have observed above that the Hon’ble Jurisdictional High Court in the case

DCIT 41(4)(1), Room No, Kautilya Bhawan, G Block, Bkc, Mumbai vs. Dinesh Prabhudas Hingoo, Jogeshwari(W), Mumbai

In the result, the appeal filed by the Assessee stands allowed

ITA 1348/MUM/2024[2011-12]Status: DisposedITAT Mumbai11 Oct 2024AY 2011-12

Bench: Shri Narender Kumar Choudhry & Shri Girish Agrawalassessment Year: 2011-12

For Appellant: Shri Ravindra Poojari, A.RFor Respondent: Shri H.M. Bhatt, Sr. D.R

Section 10(38)Section 131Section 143(1)Section 148Section 250

Vashisth Builders and Engineers Pvt. Ltd., New Delhi vs. DCIT, Circle- 26(1), New Delhi

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

ITA 6934/DEL/2018[2012-13]Status: DisposedITAT Delhi11 Oct 2024AY 2012-13

Bench: Shri S. Rifaur Rahman & Shri Sudhir Pareek, Judicialmember Vashisth Builders & Engineers Pvt. Ltd., Vs. Dcit, Circle-26(1), A-52, 2Nd Floor, Fiee Complex, New Delhi Okhla Industrial Area, Phase-2, New Delhi. (Pan: Aabcv3687L) (Appellant) (Respondent) Assessee By : Dr. Rakesh Gupta, Advocate Revenue By : Shir Vivek K. Upadhyay, Sr. Dr. Date Of Hearing : 27.08.2024 Date Of Order : 11.10.2024 O R D E R Per S. Rifaur Rahman, Am : 1. This Appeal Is Filed By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals-10), New Delhi Dated 13.08.2018 For The Assessment Year 2012-13. Aggrieved With The Above Order, Assessee Is In Appeal Before Us By Raising Following Grounds Of Appeal :- I) The Ld. Cit(A) Has Erred In Law & On Facts In Upholding The Assessment Order Passed By The Deputy Commissioner Of Income Tax, Circle 26(1), New Delhi Under Section 143(3) Of The Act, By Making An Addition Of Rs. 7,23,72,000/- Without Appreciating The Facts & 2 Circumstances Of The Case, The Law As Applicable & The Submissions & The Supporting Evidence Produced By The Appellant. Ii) The Ld. Cit(A) Has Erred In Law & On Facts In Upholding The Disallowance / Addition Of Rs. 3,72,000/- Made By The Dcit As Notional Interest On Interest Free Loans Granted By The Appellant Out Of The Interest Expense Claimed By The Appellant Without Appreciating The Facts & Circumstances Of The Case, The Law As Applicable & The Submissions & The Supporting Evidence Produced By The Appellant. Iii) The Ld. Cit(A) Has Erred In Law & On Facts In Upholding The Addition Of Rs. 7,20,000/- Made By The Dcit By Treating The Share Capital Received By The Appellant During The Year As Unexplained Cash- Credit, Without Appreciating The Facts & Circumstances Of The Case, The Law As Applicable & The Submissions & The Supporting Evidence Produced By The Appellant.

For Appellant: Dr. Rakesh Gupta, AdvocateFor Respondent: Shir Vivek K. Upadhyay, Sr. DR

Section 143(3)

Realtors Pvt. Ltd. Rs. 90,00,000/- Total Rs. 7,20,00,000/- In this regard, first submission of assessee is that no addition u/s 68 could have been made in the year under consideration for the reason that out of the above mentioned 8 parties, sum in respect ... subsequent year and therefore, there was no cash-credit in terms of section 68 during the year under consideration. Thus, no addition u/s 68 could have been made qua this amount of Rs. 6,50,00,000/- and since made, may please be deleted

Anjaniputra Dealcom Pvt. Ltd., Kolkata vs. ITO, Ward 1(1), Kolkata

In the result, the appeal of the assessee isallowed for statistical purposes

ITA 878/KOL/2024[2008-09]Status: DisposedITAT Kolkata10 Oct 2024AY 2008-09

Bench: the date of hearing.”

Section 133(6)Section 143(3)Section 148Section 250Section 263Section 68

above order, the assessee preferred an appeal before this Tribunal, raising multiple grounds, including that the Ld. CIT(A) erred in upholding the addition u/s 68 of the Act without considering the explanation and documentary evidence provided by the assessee. The Ld. AR contention is that the assessment order passed

Godavari Multipurpose Articles Pvt. Ltd., Kolkata vs. D.C.I.T., Circle - 7(1), Kolkata

In the result, appeal of the assessee isallowed

ITA 1262/KOL/2024[2012-2013]Status: DisposedITAT Kolkata10 Oct 2024AY 2012-2013

Bench: Shri Manish Borad, Accountant Member Shri Sonjoy Sarma (Judicial Member)

Section 143(3)Section 147Section 148Section 250Section 68

Supreme Court held that in case of explanation offered by the assessee, the Ld. AO must verify the same before making the addition u/s 68 of the Act. 9. On the other hand, the Ld. DR supported the orders of the lower authorities and contended that the reopening was valid ... assessee has sufficientlyexplained the transaction of supported by banking documents and ledger. Further, the AO did not appreciate this evidence and made the addition u/s 68 of the Act without proper examined the facts. On this issue, the judicial precedents as in the case of CIT Vs. Vishal Exports

ITO, Ncrb Jaipur vs. Prakash Agarwal, Jaipur

In the result, the appeal of the revenue is dismissed

ITA 54/JPR/2024[2017-18]Status: DisposedITAT Jaipur10 Oct 2024AY 2017-18

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Anil Kumar Sharma, CAFor Respondent: Sh. Arvind Kumar, CIT-DR

Section 143(2)Section 143(3)Section 40A(3)Section 44ASection 68

assessing the total income at Rs.7,33,52,530/. While completing the assessment, the AO has made an addition u/s 68 r.w.s. 115BBE of the Act to the tune of Rs.79,81,000/- as unexplained cash 3 ITO vs. Prakash Agarwal deposits and disallowance of expenditure u/s ... assessing the total income at Rs 7,33,52,530/-. While completing the assessment, the AO has made an addition u/s 68 of the Act to the tune of Rs 79,81,000/- as unexplained cash deposits and disallowance of cash payment u/s

Nitin Vijay, Jaipur vs. ITO Ward 1(4), Jaipur

ITA 12/JPR/2024[2017-18]Status: DisposedITAT Jaipur10 Oct 2024AY 2017-18

For Appellant: Sh. Rohan Sogani, CAFor Respondent: Sh. Anup Singh, Addl. CIT

Section 115BSection 133(6)Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 44ASection 68

r.w.s. 115BBE. Hon'ble Bench held that where assessee has 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. The relevant para 9 is reproduced hereunder: “In view of the foregoing discussion and taking into consideration ... 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

Firefox Bikes Private Limited, Gurgaon vs. DCIT Circle 9(1), New Delhi

In the result, the Appeal of the Assessee is partly allowed for

ITA 2879/DEL/2023[2017-18]Status: DisposedITAT Delhi10 Oct 2024AY 2017-18

Bench: Sh. Pradip Kumar Kedia & Shri Yogesh Kumar U.S.I.T.A. No. 2879/Del/2023 (A.Y 2017-18) Firefox Bikes Pvt. Ltd. Dcit 2A 1001, 10Th Floor, Two Horizon Circle 9(1) Vs. Centre, Sector 43 Dlf Phase V, New Delhi Gurgaon, Haryana (Respondent) Pan No. Aabcl0338G (Appellant)

For Appellant: Sh. Sumit Kumar Bansal, CA

Section 115BSection 142Section 143(2)Section 143(3)Section 68

authorities have not considered the same. The Ld. Counsel relying on various Judgments submitted that while making addition u/s 68 of the Act, it is only the credit entry appearing in the books of accounts of the Assessee for the relevant previous year that can be treated as unexplained cash ... been adjusted in the next year and the balance amount of Rs. 20,80,821/- remained unexplained. Therefore, the A.O. made the addition u/s 68 of the Act, taxed as per provision of Section 115BBEE of the Act. In the first Appeal, the Ld. CIT(A) while confirming the said

Sarika Tyagi, Ghazibad vs. DCIT, Central Circle, Ghazaibad

Accordingly, Ground No. 2 raised by the revenue is dismissed

ITA 1414/DEL/2022[2016-17]Status: DisposedITAT Delhi10 Oct 2024AY 2016-17

Bench: Shri M. Balaganesh & Shri Vimal Kumardcit, Vs. Sushil Tyagi, Central Circle, A-2, Ganpati Ghaziabad Apartments, Civil Lines, New Delhi (Appellant) (Respondent) Pan:Aejpt6739A Dcit, Vs. Yogender Singh, Central Circle, J-6A, Sector-23, Ghaziabad Sanjay Nagar, Ghaziabad (Appellant) (Respondent) Pan:Bgcos8548E Yogender Singh, Vs. Dcit, J-6A, Sector-23, Central Circle, Sanjay Nagar, Ghaziabad Ghaziabad (Appellant) (Respondent) Pan:Bgcos8548E Naveen Tyagi, Vs. Dcit, G-302, Vvip Central Circle, Addresses, Raj Nagar Ghaziabad Extention, Ghaziabad (Appellant) (Respondent) Pan:Admpt6420A Sarika Tyagi, Vs. Dcit, H-100, Patel Nagar,- Central Circle, 3, Ghaziabad Ghaziabad (Appellant) (Respondent) Pan:Afapt5986P Assessee By : Shri Rajeev Khandelwal, Ca Shri Gagan Khandelwal, Adv Shri Jaind Jaiswal, Adv Revenue By: Ms. Sapna Bhatia, Cit Dr Date Of Hearing 23/08/2024 Date Of Pronouncement /10/2024

For Appellant: Shri Rajeev Khandelwal, CAFor Respondent: Ms. Sapna Bhatia, CIT DR

Section 132Section 143(2)Section 68

Accordingly, ground No. 1 raised by the revenue is dismissed. 35. Ground No. 2 raised by the revenue is challenging the addition u/s 68 of the Act on account of unsecured loan of ₹7,53,250/- 36. We have heard the rival submissions and perused the material available on record

Yogender Singh, Ghaziabad vs. DCIT, Central Circle, Ghaziabad

Accordingly, Ground No. 2 raised by the revenue is dismissed

ITA 1413/DEL/2022[2017-18]Status: DisposedITAT Delhi10 Oct 2024AY 2017-18

For Appellant: Shri Rajeev Khandelwal, CAFor Respondent: Ms. Sapna Bhatia, CIT DR

Section 132Section 143(2)Section 68

Naveen Tyagi, Ghaziabad vs. DCIT, Central Circle, Ghaziabad

Accordingly, Ground No. 2 raised by the revenue is dismissed

ITA 1412/DEL/2022[2016-17]Status: DisposedITAT Delhi10 Oct 2024AY 2016-17

For Appellant: Shri Rajeev Khandelwal, CAFor Respondent: Ms. Sapna Bhatia, CIT DR

Section 132Section 143(2)Section 68

DCIT Central Circle, Ghaziabad vs. Yogender Singh, Ghaziabad

Accordingly, Ground No. 2 raised by the revenue is dismissed

ITA 1387/DEL/2022[2017-18]Status: DisposedITAT Delhi10 Oct 2024AY 2017-18

For Appellant: Shri Rajeev Khandelwal, CAFor Respondent: Ms. Sapna Bhatia, CIT DR

Section 132Section 143(2)Section 68

DCIT, Central Circle, Ghaziabad vs. Sushil Tyagi, Delhi

Accordingly, Ground No. 2 raised by the revenue is dismissed

ITA 1386/DEL/2022[2011-12]Status: DisposedITAT Delhi10 Oct 2024AY 2011-12

For Appellant: Shri Rajeev Khandelwal, CAFor Respondent: Ms. Sapna Bhatia, CIT DR

Section 132Section 143(2)Section 68

Golden Moment Pvt Ltd, New Delhi vs. ACIT Circle, Karnal

In the result, the appeal of the assessee is allowed

ITA 8021/DEL/2019[2015-16]Status: DisposedITAT Delhi10 Oct 2024AY 2015-16

Bench: Shri Saktijit Dey, Hon’Ble & Shri M. Balaganeshgolden Moment Pvt. Ltd, Vs. Acit, C/O. R. C. Rai & Associates, Karnal 203, 2Nd Floor, Akash Deep Building, 26A, Barakhamba Road, (Appellant) (Respondent) Pan:Aadcg4401D Assessee By : Shri R. C. Rai, Ca Ms. Nagma, Adv Revenue By: Shri Shyam Manohar Singh, Sr. Dr Date Of Hearing 13/08/2024 Date Of Pronouncement 10/10/2024

For Appellant: Shri R. C. Rai, CAFor Respondent: Shri Shyam Manohar Singh, Sr. DR

Section 131Section 133(6)Section 143(2)Section 143(3)Section 41(1)

above observations and respectfully following the judicial precedent, we find that there is no case made out by the revenue for making an addition u/s 68 of the Act. Accordingly, the Ground Nos. 6 raised by the assessee is allowed. 14. In the result, the appeal of the assessee

M/S. K B Developers, Kolkata vs. D.C.I.T., Circle - 43, Kolkata

In the result, the appeal of the assessee is allowed

ITA 1504/KOL/2024[2015-2016]Status: DisposedITAT Kolkata09 Oct 2024AY 2015-2016

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 142(1)Section 143(1)Section 263Section 68

therefore, respectfully following the above decision hold that the sundry creditor disallowed by the AO by accepting corresponding expenses is incorrect and the addition u/s 68 of the Act on account of sundry creditor is unsustainable in law and accordingly we set aside the order

Subros Limited, Delhi vs. DCIT Circle 22(2), Delhi

In the result, the appeal being ITA No

ITA 3579/DEL/2023[2020-21]Status: DisposedITAT Delhi09 Oct 2024AY 2020-21

Bench: Shri S.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Salil Agarwal, Sr. AdvocateFor Respondent: Ms. Kirti Sankratyayan, Sr. DR

Section 115JSection 143(2)Section 35

filed confirmation from Rajesh Enterprises and Hindustan Metals. However, the above submissions were rejected by the Assessing Officer and proceeded to make the addition u/s 68 of the Act. 19. Aggrieved with the above order, assessee preferred an appeal before the ld. CIT (A) and ld. CIT (A) after considering