“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

Vivek Chandela, New Delhi vs. ITO, New Delhi

Appeal is allowed for statistical purposes

ITA 976/DEL/2016[2011-12]Status: DisposedITAT Delhi28 Jun 2024AY 2011-12

Bench: Shri G.S. Pannu & Shri Anubhav Sharma[Assessment Year: 2011-12

Section 143(1)Section 143(3)Section 271(1)Section 44ASection 44DSection 68

u/s 44AD of the Act. The AO examined the issue and found absence of evidence to establish the source of income and made addition u/s 68 of the Act. The CIT(A) had partly allowed the appeal, by deleting addition made on account of payments to HDFC against the credit ... card but sustained addition u/s 68 of the Act, for which the assessee has come before the Tribunal raising following grounds: “1. The CIT (Appeal) has not considered the submission before passing order upholding additions of Rs. 56,86,720 which were deposits in the bank out of proceeds from

Smt. Sneha Ankit Salecha, Mumbai vs. Income Tax Office, Ward, 19(3)(4), Mumbai

In the result, appeal of the assessee is allowed

ITA 255/MUM/2024[2014-15]Status: DisposedITAT Mumbai27 Jun 2024AY 2014-15

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

For Appellant: Shri Jalaj Prakash, AdvocateFor Respondent: Shri Mahesh Parwani, Sr. DR

Section 10(38)Section 131Section 68Section 69C

made merely by placing reliance on the Kolkata Investigation Wing report, which are more general in nature, cannot be the basis for making addition u/s 68 of the Act, when the investigation wing has not implicated the assessee. Before us, the Ld D.R placed reliance on the decision rendered ... assessed entire sale proceeds received on sale of shares ad income of the assessee, meaning thereby he Smt. Sneha Ankit Selecha has made addition u/s 68 of the Income tax Act. The responsibility placed upon the assessee u/s 68 of the Act is different, i.e., the initial burden to prove

Naresh Mathurdas Dudhela, Mumbai vs. Income Tax Officer, Mumbai City

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

ITA 244/MUM/2024[2011-12]Status: DisposedITAT Mumbai27 Jun 2024AY 2011-12

Bench: Shri Prashant Maharishi, Am Naresh Mathurdas Dudhela, Income Tax Officer C 604, 6Th Floor, Neena Sargam, 42(3)(3), Mumbai-400 Mahavir Nagar Kandivali West, Vs. Aaykar Bhavan Mumbai-400 067 (Appellant) (Respondent) Pan No. Aacpd9636M Assessee By : Shri Kaushik Makwana, Ar Revenue By : Shri R.R. Makwana, Dr Date Of Hearing: 03.06.2024 Date Of Pronouncement : 27.06.2024

For Appellant: Shri Kaushik Makwana, ARFor Respondent: Shri R.R. Makwana, DR

Section 142(1)Section 143(3)Section 144Section 147Section 148Section 234BSection 271(1)(c)Section 68

confirmed the addition by completely relying on the findings of investigation department. Ground 4: The L.d. CIT (A) erred in confirming to the addition u/s 68 made by Assessing Officer as per the Assessment order without giving an appropriate opportunity to explain the case and passed the order in haste

Skanda Kumar Kasturi, Kurnool vs. Income Tax Officer, Ward-1, Kurnool

In the result, appeal filed by the assessee is allowed

ITA 459/HYD/2024[2017-18]Status: DisposedITAT Hyderabad26 Jun 2024AY 2017-18

Bench: Shri Manjunatha, G.आ.अपी.सं /Ita No.459/Hyd/2024 (निर्धारण वर्ा/Assessment Year: 2017-18) Shri Skanda Kumar Vs. Income Tax Officer Kasturi, Kurnool Ward 1 Pan:Actpk0562A Kurnool (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri K.A. Sai Prasad, Ca रधजस् व द्वधरध/Revenue By:: Smt. P. Sumitha, Dr सुिवधई की तधरीख/Date Of Hearing: 26/06/2024 घोर्णध की तधरीख/Pronouncement: 26/06/2024 आदेश/Order

For Appellant: Shri K.A. Sai Prasad, CAFor Respondent: : Smt. P. Sumitha, DR

Section 133ASection 68

genuineness of the transaction and creditworthiness of the parties. The Assessing Officer and the learned CIT (A) without appreciating the relevant facts made addition u/s 68 of the I.T. Act. 6. The learned DR, on the other hand, supporting the orders of the learned CIT (A) submitted that the averments ... evidence has been filed. Therefore, the Assessing Officer and the learned CIT (A) had rightly rejected the explanation of the assessee and made addition u/s 68 of the I.T. Act, 1961. 7. I have heard both the parties, and considered the relevant assessment order and appellate order in the light

Shri. Gopal Lokesh, Bangalore vs. Income-Tax Officer, Ward-1(2)(1), Bangalore

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

ITA 752/BANG/2023[2015-16]Status: DisposedITAT Bangalore26 Jun 2024AY 2015-16

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2015-16

For Appellant: Shri Sandeep Chalapathy, CAFor Respondent: Shri Subramanian S., Jt.CIT(DR)(ITAT), Bengaluru

Section 250Section 68

reproduction of the assessment order. 4. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in confirming the addition u/s 68 of the Act to the extent of Rs. 22,46,053 as unexplained cash credits without considering the cash withdrawals by the appellant from

Mohana Shantmallappa Biradar, Kalaburagi vs. Income Tax Officer, Ward-1 & Tps, Gulbarga

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

ITA 916/BANG/2024[2017-18]Status: DisposedITAT Bangalore25 Jun 2024AY 2017-18

Bench: Shri Chandra Poojari & Shri Prakash Chand Yadavassessment Year: 2017-18

For Appellant: Smt. Lakshmi S., A.RFor Respondent: Ms. Neha Sahay, D.R

Section 250Section 68

short “The Act”). 2. In this case, the ld. AO vide assessment order dated 19.12.2019 made following additions to the returned income. 1. Addition u/s 68 of the Act - Rs.48,80,000/- Disallowance of expenditure at 20% Interest paid - Rs.1,68,019/- Freight charges- Rs. 85,597/- Misc. expenses

Rupesh Dhirajlal Shah, Mumbai vs. Commissioner of Income-Tax (Appeals), Delhi

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

ITA 151/MUM/2024[2011-2012]Status: DisposedITAT Mumbai25 Jun 2024AY 2011-2012

Bench: Shri Narender Kumar Choudhry & Smt. Renu Jauhrirupesh Dhirajlal Shah Vs. Assessing It Officer-Ward Flat No. 6, 1St Floor, 22(3)(1) Methdoot Building, Piramal Chamber, Gulmohar Cross Road No. Lalbaug, 6, Nr. Lahiri House, Jvpd Parel, Mumbai-400012 Sceheme, Vileparle West, Mumbai-400049 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aafps9285G Appellant .. Respondent

For Appellant: Shri Sanjay ShahFor Respondent: Shri Nagnath Pasale

Section 250Section 68Section 69C

therefore the reopening Page 7 of 11 A.Y. 2011-12 Rupesh Dirajlal Shah was wrongly upheld by the Ld. CIT(A). Lastly, the addition u/s 68 even otherwise deserved to be deleted on merits. 6. We have heard the rival submissions. Ld. AR has relied upon the following decisions

M/S. Harivardhan Steel & Alloys, Thane vs. ITO-2(1), Thane

In the result, the appeal is allowed in aforesaid terms

ITA 4195/MUM/2023[2013-14]Status: DisposedITAT Mumbai25 Jun 2024AY 2013-14

Bench: Shri Pavan Kumar Gadale & Shri Ratnesh Nandan Sahay

Section 143(3)Section 148Section 250Section 46ASection 68

appreciating that the Ld. AO did not provide cross examination of Mr. Vipul Vidur Bhatt thereby violating principles of natural justice and hence, addition u/s 68 of Rs.1,68,00,000/- may be deleted. 2.3. The Ld. CIT(A) erred in confirming the addition of Rs.1,68,00,000/- without ... admitting additional evidences u/s. 46A though Assessee had given cogent explanation for admitting the additional evidences and hence, addition u/s. 68 of Rs.1,68,00,000/- may be deleted. III. Addition u/s 68 of Rs. 11,00,000/- being unsecured loan received from M/s P. Saji Textiles

M/S. Shree Vijayalaxmi Souharda Sahakari Niyamita, Sirsi vs. Income Tax Officer, Ward-1, Sirsi

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

ITA 623/BANG/2024[2017-18]Status: DisposedITAT Bangalore24 Jun 2024AY 2017-18

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2017-18

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Shri Subramanian S., Jt.CIT(DR)(ITAT), Bengaluru

Section 115BSection 139Section 68Section 69A

Govt. of India dated 08.11.2016 the assessee was not authorised to accept cash deposits in SBNs and the AO had made addition u/s. 68. We note that the assessee has filed details of cash deposits from members in their accounts with society along with KYC details and assessee has discharged ... observing that the impugned amount should be treated as income of the assessee u/s 69A of the Act., however the AO made addition u/s 68 of the I.T. Act. The assessee has satisfied the requirement of section 69A of the Act and the AO did not give further opportunity

Balaka Vinimay Pvt. Ltd., Kolkata vs. ITO, Ward-2(1), Kolkata

In the result, appeals of the assessee in ITA No

ITA 161/KOL/2024[2008-09]Status: DisposedITAT Kolkata21 Jun 2024AY 2008-09

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 160 & 161/Kol/2024 Assessment Year: 2008-09 Balaka Vinimay Pvt. Ltd. Income Tax Officer, Ward – 2(1), 9/12, Lal Bazar Street Vs Kolkata Kolkata - 700001 [Pan : Aadcb2610B] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri A.K. Tibrewal, A/R & Saurav Gupta, A/R Revenue By : Shri Abhijit Kundu, Cit, Sr. D/R सुनवाई क" तारीख/Date Of Hearing : 09/04/2024 घोषणा क" तारीख /Date Of Pronouncement: 21/06/2024 आदेश/O R D E R Per Dr. Manish Borad: The Instant Appeals Are Directed At The Instance Of The Assessee Against The Separate Orders Of The National Faceless Appeal Centre, Delhi, (Hereinafter The “Ld. Cit(A)”). Ita No. 160/Kol/2024 Is Against The Order Of The Ld. Cit(A) Dt. 29/11/2023, Passed U/S 250 Of The Income Tax Act, 1961 (Hereinafter ‘The Act’) Arising Out Of The Penalty Order Passed By The Ld. Assessing Officer U/S 271(1)(C) Of The Act & Ita No. 161/Kol/2023, Is Against The Order Of The Ld. Cit(A) Dt. 28/11/2023, Arising Out Of The Order Of The Ld. Assessing Officer Passed U/S 143(3) R.W.S. 254 Of The Act, For Assessment Year 2008-09. 2. Though The Assessee Has Raised Various Grounds In Both These Appeals, But The Effective Issue Raised In Ita No. 161/Kol/2024 Is Against The Addition Made U/S 68 Of The Act For Unexplained Share Capital Confirmed By The Ld. Cit(A) & In Ita No. 160/Kol/2024 Is Against The Levy Of Penalty U/S 271(1)(C) Of The Act On The Addition Made

For Appellant: Shri A.K. Tibrewal, A/R and Saurav Gupta, A/RFor Respondent: Shri Abhijit Kundu, CIT, Sr. D/R

Section 142(1)Section 143(3)Section 147Section 148Section 250Section 263Section 271(1)(c)Section 68

submission of supporting evidences & above facts, it cannot be concluded as to how the order passed by the AO is erroneous and addition u/s 68 of the Act should not be made to the total income of the assessee. In view of this, I hereby, uphold the action ... respond to the notice of the ld. Assessing Officer dt. 13/02/2020, and accordingly the action of the ld. Assessing Officer making addition u/s 68 of the Act was confirmed. 6. Aggrieved the assessee is now in appeal before this Tribunal. 7. The ld. Counsel for the assessee referred to various

Balaka Vinimay Pvt. Ltd., Kolkata vs. ITO, Ward-2(1), Kolkata

In the result, appeals of the assessee in ITA No

ITA 160/KOL/2024[2008-09]Status: DisposedITAT Kolkata21 Jun 2024AY 2008-09

For Appellant: Shri A.K. Tibrewal, A/R and Saurav Gupta, A/RFor Respondent: Shri Abhijit Kundu, CIT, Sr. D/R

Section 142(1)Section 143(3)Section 147Section 148Section 250Section 263Section 271(1)(c)Section 68

Jitendra Udaylal Jain, Maharashtra vs. National Faceless Appeal Centre (NFAC), Delhi

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

ITA 4543/MUM/2023[2011-12]Status: DisposedITAT Mumbai21 Jun 2024AY 2011-12

Bench: Shri Pavan Kumar Gadale & Shri Girish Agrawal

Section 10(38)Section 143(1)Section 234ASection 271(1)(c)Section 68Section 69C

same need to be allowed. Therefore, we do not countenance the action of the lower authorities and direct the deletion of the addition u/s 68 of the Act. 19. The Ld. AR has also brought to our notice that the similar case came up before the Tribunal (LTCG claim ... hold that, the Ld. CIT(A) had erred both on facts and in law in upholding the AO’s action of making addition u/s 68 of the Act, in relation to the proceeds derived on sale of shares of KGN and AGSSL alleging it to be bogus. We therefore direct