“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

Tr Pchamuthu Now Known As Tr Paarivendhar, Chennai vs. ACIT, Central Circle-1(3), Chennai

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

ITA 231/CHNY/2023[1998-99]Status: DisposedITAT Chennai23 Feb 2024AY 1998-99

Bench: Shri Mahavir Singh & Shri Manjunatha.G

For Appellant: Shri. D. Anand, AdvocateFor Respondent: Shri. Nilay Baran Som, IRS, CIT

Section 143(3)Section 148Section 68Section 69

acceptable as the same has become void as per section 67(2) of the Scheme. The credit remains unexplained and therefore, warrants addition u/s 68 of the Income-tax Act, 1961 for the failure of the assessee to prove the source of this credit in his books for the assessment

DCIT Central Circle -2(2), Mumbai vs. Shri Viral Saraf Mittal, Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 1843/MUM/2022[2018-19]Status: DisposedITAT Mumbai23 Feb 2024AY 2018-19

Bench: Shri Aby T Varkey, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bledcit – Central Circle – 2(2) V. Viral Saraf Mittal Room No. 806, 8Th Floor 901/902, Capri Heights Old Cgo Annex Building Palli Hill, Bandra (W) M.K. Road, Mumbai - 400020 Mumbai - 400050 Pan: Azbps0317C (Appellant) (Respondent) Assessee Represented By : Shri Sidharth Kothari Department Represented By : Ms. Kavitha Kaushik

Section 10(38)Section 143(2)Section 68

negated the claim of long term capital gain by holding the transaction in sale of shares as bogus, thereby making addition u/s 68 and disallowing the claim of exemption u/s 10(38) of the Income Tax Act, 1961. In the said case, the AO, based on information received from ... available. The sale transactions have suffered expenditure such as brokerage, service tax, Securities Transaction Tax (STT), stamp duty, SEBI turnover charges etc. (ii) Addition u/s 68 is neither justifiable nor tenable on the facts of the case. Under the mandate of section 68 of the Act, the assessee is required

ITO 28 (1)(1), Mumbai vs. Gahlot Construction, Mumbai

In the result, the appeal of the revenue & CO of the assessee is dismissed

ITA 2475/MUM/2021[2008-09]Status: DisposedITAT Mumbai23 Feb 2024AY 2008-09

Bench: Shri Br Baskaran, Am & Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T. A. No. 2475/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2008-09) Ito-28(1)(1) बिधम/ M/S. Gahlot Construction Room No. 329, Tower No. Plot No-28A, Gahlot Vs. 6, 3Rd Floor, Vashi Railway Complex, Sector-10, Station, Navi Mumbai- Nerul, Navi Mumbai- 400703. 400703. Cross Objection No. 82/Mum/2023 Arising Out Of I.T.A. No.2475/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2008-09) M/S. Gahlot Construction बिधम/ Ito-28(1)(1) Plot No-28A, Gahlot Room No. 329, Tower Vs. No. 6, 3Rd Floor, Vashi Complex, Sector-10, Nerul, Navi Mumbai-400703. Railway Station, Navi Mumbai-400703. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaofm5698J (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Ms. Ritika Agarwal Revenue By: Shri Raj Singh Meel (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 30/01/2024 घोषणा की तारीख /Date Of Pronouncement: 23/02/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Revenue; & The Assessee Has Filed A Cross Objection (Co) Against The Order Of The Ld. Commissioner Of Income Tax (Appeals)/Nfac, Delhi [Hereinafter Referred To As The “Cit(A)”] Dated 30.10.2021 For The Ay. 2008-09. 2. The Main Grievance Of The Revenue Is Against The Action Of The Ld. Cit(A) Deleting The Addition Of Rs.5 Cr Which Was Added By The

For Appellant: Ms. Ritika AgarwalFor Respondent: Shri Raj Singh Meel (Sr. AR)

Section 132Section 139Section 147Section 151Section 153CSection 68

opinion that the assessee could not satisfy the nature and source of the loan of Rs.5 cr. And therefore, the AO made an addition u/s 68 of the Act. On appeal, the Ld. CIT(A) has deleted the addition taking note that the assessee during the re-assessment proceedings ... case of CIT v. Smt. P. K. Noorjahan [1999] 237 ITR 570. 10. In a case wherein the AO made the addition u/s 68 of the Act because the lenders of loan to assessee did not turn up before him [AO], the Hon'ble Apex Court in the case

M/S Tjr Properties Pvt. Ltd., Chandigarh vs. ACIT, CC-2, Chandigarh

In the result, the Appeal is partly allowed

ITA 738/CHANDI/2022[2016-17]Status: DisposedITAT Chandigarh22 Feb 2024AY 2016-17

Bench: Shri A.D. Jain & Shri Vikram Singh Yadav

For Appellant: Sh. Rohit Goyal, CA &For Respondent: Smt. Kusum, CIT-DR

Section 132Section 132(1)Section 143(3)Section 153Section 153ASection 153A(1)(b)Section 153DSection 68

wrongly upheld addition of Rs. 20,50,000 u/s 68 of the Income Tax Act. 9. That the learned C.I.T.(A) wrongly upheld Addition u/s 68 of the amount, which was already declared as income in the Profit & Loss Account during the year. 10. That the learned C.I.T ... appellant could not explain the purpose and utilisation of such credits. However, the AO failed to take cognisance of the fact that addition u/s 68 of the Act is to be made if the appellant doesn't offer any explanation regarding the source and nature of credits received

ACIT, CC-3(1), Hyderabad vs. Lepl Projects Limited, Vijayawada

The appeal of the Revenue is allowed for statistical purposes

ITA 345/HYD/2023[2017-18]Status: DisposedITAT Hyderabad22 Feb 2024AY 2017-18

Bench: Shri R.K. Panda & Shri Laliet Kumar

For Appellant: Shri K.C. Devdas, AdvocateFor Respondent: Dr.K.J. Rao, CIT-DR

Section 143(2)Section 143(3)Section 68

cannot be made u/s 68 of the Act, to be genuine in the remand report, no further comments on the said addition u/s 68 of the Act are required to be made. Therefore, the said addition cannot be sustained u/ s 68 of the Act. The next issue raised ... Assessing Officer with respect to the above issue has already been reproduced hereinabove. It was submitted that the ld.CIT(A) had deleted the addition u/s 68 of the Act as the Assessing Officer has opined that the assessee was able to prove the identity, creditworthiness and genuineness of the transaction

Subhash Damodar Annamwar, Mumbai vs. Income Tax Officer 34(3)(4), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3227/MUM/2023[2011-12]Status: DisposedITAT Mumbai22 Feb 2024AY 2011-12

Bench: Shri Aby T Varkey, Jm & Ms Padmavathy S, Am

For Appellant: Shri Bhupendra ShahFor Respondent: Dr. Yogendra T. Wakare

Section 148Section 234Section 271Section 68Section 69C

collected by the Investigation Wing such as the financials supported by the financial statements. Accordingly the AO treated the entire sale consideration as addition u/s 68 of the Act. The AO also made addition u/s. 69C assuming 3% commission was paid to the accommodation entry providers amounting to Rs.12

Roselabs Polymers Limited, Ahmedabad vs. DCIT, Circle-3(1)(2), Ahmedabad

In the result, the appeal filed by the Assessee is dismissed in limine

ITA 425/AHD/2019[2012-13]Status: DisposedITAT Ahmedabad21 Feb 2024AY 2012-13

Bench: Ld. Cit(A) For The Assessment Year 2012-13 An Exparte Appellate Order Was Passed. For The Assessment Year 2012-13 One Shri Sagar Vasoya Appeared Before Ld. Cit(A), However The Assessee Appeal Was Dismissed By A Detailed Speaking Order.

Section 143(3)Section 68

judgment in the case of ACIT v/s Nakoda Fashion Pvt. Ltd. ITA No. 1716/Ahd/2012 dtd. 18/08/2016 has dealt with the issue of addition u/s 68 of the Act in the hands of a person by means of share capital or application in the company. Although in the said judgment

Roselabs Polymers Limited, Ahmedabad vs. The Deputy Commissioner of Income Tax, Circle-3(1)(2), Ahmedabad

In the result, the appeal filed by the Assessee is dismissed in limine

ITA 28/AHD/2018[2013-14]Status: DisposedITAT Ahmedabad21 Feb 2024AY 2013-14

Section 143(3)Section 68

Darpan Vinimay (P) Ltd., Kolkata vs. Dc/ACIT, Cir-1(1), Kolkata.

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

ITA 832/KOL/2023[2011-12]Status: DisposedITAT Kolkata21 Feb 2024AY 2011-12

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma]

Section 148Section 68

Darpan Vinimay Private Limited 9.Because the demand so raised in the impugned assessment order of Rs.23,06,380/- is on addition u/s 68 of the I.T. Act 1961, which is unsustainable and hence the demand is unrealizable. 10. The appellant craves leave to add further grounds of appeal or alter

Vish Realty Solutions Private Limited, Kolkata vs. I.T.O., Ward-5(3), Kolkata

In the result, appeal of the revenue is dismissed

ITA 250/KOL/2020[2012-13]Status: DisposedITAT Kolkata21 Feb 2024AY 2012-13

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 250/Kol/2020 Assessment Year: 2012-13 Vish Realty Solutions Private Limited Income Tax Officer, Ward-5(3), 55, Ezra Street Vs Kolkata 2Nd Floor Kolkata - 700001 [Pan : Aadcv9938N] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri S. Jhajharia, A/R Revenue By : Shri Vineet Kumar, Addl. Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 16/01/2024 घोषणा क" तारीख /Date Of Pronouncement: 21/02/2024 आदेश/O R D E R Per Dr. Manish Borad: The Present Appeal Is Directed At The Instance Of The Assessee Against The Order Of The Commissioner Of Income Tax (Appeals) -10 (Hereinafter The “Ld. Cit(E)”) Dt. 02/12/2019, Passed U/S 263 Of The Income Tax Act, 1961 (“The Act”) For The Assessment Year 2012-13. 2. The Assessee Has Raised The Following Grounds Of Appeal:- “1. That The Learned Commissioner Of Income Tax (Appeals)-Io, Kolkata Erred In Passing An Order Dated 2Nd Of December, 2019 Under Section 143(3) Of The Income Tax Act, 1961 Dismissing The Appeal Of The Appellant Without Allowing Reasonable Opportunity Of Being Heard. 2. That The Learned Commissioner Of Income Tax (Appeals) - 10, Kolkata Erred In Confirming The Addition Of Share Application Money Ofrs. 5,86,00,000/- Made By The Assessing Officer Under Section 68 Of The Income Tax Act, 1961 On Irrelevant Considerations & Arbitrary Grounds.

For Appellant: Shri S. Jhajharia, A/RFor Respondent: Shri Vineet Kumar, Addl. CIT, D/R

Section 143(2)Section 143(3)Section 14ASection 263Section 68

I.T.A. No. 250/Kol/2020 Assessment Year: 2012-13 Vish Realty Solutions Private Limited funds in the form of share application money and made the addition u/s 68 of the Act. Petty disallowance u/s 14A of the Act of Rs.30,216/- was also made. Income assessed at Rs.5.86 Crores. 4. Aggrieved ... share applicants and genuineness of the transactions but without finding any defect in such details, referred to plethora of judgment wherein, the addition u/s 68 of the Act were confirmed when the assessee could not explain the nature and source of sum received but while concluding the finding has referred

Metal Industries, Hyderabad vs. ITO, Ward 6(3), Hyderabad

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

ITA 605/HYD/2023[2017-18]Status: DisposedITAT Hyderabad20 Feb 2024AY 2017-18

Bench: Shri Laliet Kumar & Shri Rifaur Rahmanassessment Year: 2017-18 Metal Industries, Vs. The Income Tax Officer, B-44, Industrial Estate, Ward – 6(3), Sanathnagar, Hyderabad. Hyderabad – 500018. Telangana. Pan : Aawfm8494Q. (Appellant) (Respondent) Assessee By: Shri Hari Agarwal, C.A. Revenue By: Shri Shakeer Ahamed, Sr.Ar Date Of Hearing: 25/01/2024 Date Of Pronouncement: 20/02/2024

For Appellant: Shri Hari Agarwal, C.AFor Respondent: Shri Shakeer Ahamed, Sr.AR

Section 142(1)Section 143(2)Section 143(3)Section 250Section 44ASection 68

Rs.22,23,935/- and Rs.53,50,000/- as on 31.03.2017, totaling to Rs.85,34,105/- was also considered by the Assessing Officer for addition u/s 68 of the Income Tax Act. Thus, Assessing Officer completed the assessment interalia making an addition of Rs.1,29,03,105/- (Rs.43,69,000/- + Rs.85

Reliance Corporation, Mumbai vs. Dy. CIT Central Circle - 1, Thane

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

ITA 2725/MUM/2023[2013-14]Status: DisposedITAT Mumbai20 Feb 2024AY 2013-14

Bench: Shri B.R. Baskaran (Am) & Shri Sandeep Singh Karhail (Jm)

Section 147Section 68

three years and confirmed the remaining two additions. The details of disallowances confirmed by Ld CIT(A) are tabulated below:- Asst. Year Addition u/s 68 Commission Interest Expenses disallowed ... Bombay High Court has held in the case of CIT vs. Orchid Industries (P) Ltd (397 ITR 136)(Bom) that the addition u/s 68 could not be made once the assessee had produced the documents to prove the cash credits. It was further held that non-appearance of the share

Reliance Corporation, Mumbai vs. Dy. CIT Central Circle - 1, Thane

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

ITA 2724/MUM/2023[2011-12]Status: DisposedITAT Mumbai20 Feb 2024AY 2011-12

Bench: Shri B.R. Baskaran (Am) & Shri Sandeep Singh Karhail (Jm)

Section 147Section 68

Reliance Corporation, Mumbai vs. Dy. CIT, Central Circle - 1, Thane

ITA 2723/MUM/2023[2014-15]Status: DisposedITAT Mumbai20 Feb 2024AY 2014-15

Bench: Shri B.R. Baskaran (Am) & Shri Sandeep Singh Karhail (Jm)

Section 147Section 68

M/S. Lectrodryer Marketing Private Limited., Kolkata vs. ITO, Ward-9(1), Kolkata.

In the result, the appeal of the assessee stands allowed

ITA 849/KOL/2023[2010-11]Status: DisposedITAT Kolkata19 Feb 2024AY 2010-11

Bench: Shri Sanjay Garg & Shri Rajesh Kumari.T.A. No.849/Kol/2023 Assessment Year: 2010-11 M/S Lectrodryer Marketing Pvt. Ltd..........................…………………….……Appellant 5, Clive Row, Room No.60A, 3Rd Floor, Kolkata-1. [Pan: Aaacl5914H] Vs. Ito, Ward-9(1), Kolkata………..…..…….…..….........…........……...…..…..Respondent Appearances By: Shri Miraj D. Shah, Ar, Appeared On Behalf Of The Appellant. Shri B. K. Singh, Jcit- Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : January 02, 2024 Date Of Pronouncing The Order : February 19, 2024 Order Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 14.06.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’).

Section 147Section 250Section 68

therefore, treated the aforesaid receipt of Rs.60,00,000/- as unexplained income of the assessee and made the impugned addition u/s 68 of the Act. 2 I.T.A. No.849/Kol/2023 Assessment Year: 2010-11 M/s Lectrodryer Marketing Pvt. Ltd. 5. In appeal before the CIT(A), the assessee reiterated its submissions, however

Rajesh Agarwal, Vidhyadhara Nagar Jaipur vs. Income Tax Officer WD 4(1), ITO Jaipur

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

ITA 22/JPR/2024[2014-15]Status: DisposedITAT Jaipur19 Feb 2024AY 2014-15

For Appellant: Shri C.M. Batwara (Adv.)

Section 143(2)Section 143(3)Section 249(2)Section 68Section 69C

supporting to the appellant and erred in not following the binding precedent of the jurisdictional Income Tax Appellate Tribunal (Jaipur Bench) Rajasthan. 2. Addition U/S 68 of I.T. Act (a) That the learned CIT Appeal erred in dismissing of the appeal without considering facts, evidence and the written argument ... assessment was completed vide order u/s 143(3) of the Act dated 25.12.2016 assessing the income at Rs. 33,69,440/- after making additions u/s 68 of Rs. 24,20,883/- and u/s 69C of Rs. 1,51,253/- of the Act. 4. Aggrieved from the above order

M/S Tjr Properties Pvt. Ltd., Chandigarh vs. ACIT, CC-2, Chandigarh

In the result, the Appeal is partly allowed

ITA 4/CHANDI/2023[2015-16]Status: DisposedITAT Chandigarh16 Feb 2024AY 2015-16

Bench: Shri A.D. Jain & Shri Vikram Singh Yadav

For Appellant: Sh. Rohit Goyal, CA &For Respondent: Smt. Kusum, CIT-DR

Section 132Section 132(1)Section 143(3)Section 153ASection 153A(1)(b)Section 153DSection 68

appellant could not explain the purpose and utilisation of such credits. However, the AO failed to take cognisance of the fact that addition u/s 68 of the Act is to be made if the appellant doesn't offer any explanation regarding the source and nature of credits received

Seema Gupta, Meerut vs. ITO, Ward-2(5), Meerut

The appeal of the assessee is allowed

ITA 2823/DEL/2023[2009-10]Status: DisposedITAT Delhi16 Feb 2024AY 2009-10

Bench: Dr. B.R.R. Kumar & Shri Anubhav Sharma

For Appellant: Shri Rohit Aggarwal, CAFor Respondent: Shri Shyam Singh, Sr. DR

Section 142(1)Section 144Section 147Section 148Section 68Section 69

have been maintained by the appellant and, therefore, no unexplained cash credit could be said to have been found recorded therein for making addition u/s 68 of the Act. 4. That the confirmation of addition of Rs.11,48,016/- u/s 69 of Act, as unexplained investment, is unjust, illegal

Seema Gupta, Meerut vs. ITO, Ward 2(5), Meerut

The appeal of the assessee is allowed

ITA 2822/DEL/2023[2009-10]Status: DisposedITAT Delhi16 Feb 2024AY 2009-10

Bench: Dr. B.R.R. Kumar & Shri Anubhav Sharma

For Appellant: Shri Rohit Aggarwal, CAFor Respondent: Shri Shyam Singh, Sr. DR

Section 142(1)Section 144Section 147Section 148Section 68Section 69

Dreamtech Constructions Pvt. Ltd., New Delhi vs. DCIT Circle-7(1), New Delhi

In the result, Appeal filed by the assessee in ITA No

ITA 91/DEL/2021[2012-13]Status: DisposedITAT Delhi16 Feb 2024AY 2012-13

Bench: or at the time of hearing of the appeal.”

Section 143(3)Section 68

general in nature. The Ground No. 3 is regarding non issuance of show cause notice during the assessment proceedings qua the subject addition u/s 68 of the Act. The above said issue has already been adjudicated for the Assessment Year 2011-12. Considering the fact that there is no necessity ... income in their returns and the assessee has failed to prove the burden caste upon him u/s 68 of the Act, therefore, the addition u/s 68 of the Act has been rightly made which has been confirmed by the Ld. CIT(A). 23. We have heard both the parties