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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

Acumen Infrastructure Private Limited, New Delhi vs. ACIT Circle-1(2), New Delhi

In the result, appeal of assessee is dismissed

ITA 8702/DEL/2019[2016-17]Status: DisposedITAT Delhi09 Oct 2023AY 2016-17

Bench: Sh. G. S. Pannu & Shri Chandra Mohan Gargacumen Infrastructure Vs. The Acit Private Ltd. Circle – 1(2) C/O. Hote Oyster, B/H Ibp Delhi Pump, Near Big Bazar, Surat, Dumas Road, Piplod, Surat – 395 007 Pan No. Aafca 2256 G (Appellant) (Respondent) Assessee By --None-- Revenue By Ms. Anubhaa Tah, Sr. D.R. Date Of Hearing: 04.10.2023 Date Of Pronouncement: 09.10.2023

Section 40Section 68

Rs.2,18,66,082/- on account of unsecured loan of Rs.1,75,51,113/- plus interest of Rs.43,14,969/- and making addition u/s 68 of the Income Tax Act, 1961 (in short ‘the Act’) to the income of the assessee. It has also been contended by the assessee

ACIT Circle-7(1), New Delhi vs. Delmos Aviation Pvt. Ltd., New Delhi

In the result, Appeal filed by the Revenue is partly allowed for statistical purpose

ITA 7894/DEL/2019[2016-17]Status: DisposedITAT Delhi06 Oct 2023AY 2016-17

Bench: or during the hearing of this appeal.”

Section 143(3)Section 14ASection 41Section 68

confirmation was also filed, but the assessee has not filed copy of the bank statement of Naveen Rao, therefore, the A.O. made the addition u/s 68 of the Act. It is the case of the assessee that the bank statement has been duly uploaded on the e-portal and also

Ruby Singh, New Delhi vs. DCIT, Central Circle-8, New Delhi

In the result, all the seven captioned appeals filed by the assessee stand dismissed in the aforesaid manner

ITA 2881/DEL/2022[2019-20]Status: DisposedITAT Delhi29 Sept 2023AY 2019-20

Bench: Shri Chandra Mohan Garg & Shri M. Balaganesh, Accoutant Member

For Appellant: Shri Gautam Jain, Adv. &For Respondent: Shri Vivek Vardhan, Sr. DR
Section 147Section 148Section 151

assessee further pointed out that unless such fact is established by way of plausible and sustainable adverse material against the assessee, no addition u/s. 68 or any other provisions of the Act can be made in the hands of the assessee. 4.5 On careful consideration of the above submissions, first ... from the relevant part of the Ld. First Appellate order, we note that AO made addition u/s. 68 amounting to Rs. 75 lacs with the following observations and findings:- “3.1 On perusal of the bank A/c statement of the assessee, it has been found that an amount

Ruby Singh, New Delhi vs. DCIT, Central Circle-8, New Delhi

In the result, all the seven captioned appeals filed by the assessee stand dismissed in the aforesaid manner

ITA 2880/DEL/2022[2018-19]Status: DisposedITAT Delhi29 Sept 2023AY 2018-19

Bench: Shri Chandra Mohan Garg & Shri M. Balaganesh, Accoutant Member

For Appellant: Shri Gautam Jain, Adv. &For Respondent: Shri Vivek Vardhan, Sr. DR
Section 147Section 148Section 151

assessee further pointed out that unless such fact is established by way of plausible and sustainable adverse material against the assessee, no addition u/s. 68 or any other provisions of the Act can be made in the hands of the assessee. 4.5 On careful consideration of the above submissions, first ... from the relevant part of the Ld. First Appellate order, we note that AO made addition u/s. 68 amounting to Rs. 75 lacs with the following observations and findings:- “3.1 On perusal of the bank A/c statement of the assessee, it has been found that an amount

Ruby Singh, New Delhi vs. DCIT, Central Circle-8, New Delhi

In the result, all the seven captioned appeals filed by the assessee stand dismissed in the aforesaid manner

ITA 2879/DEL/2022[2017-18]Status: DisposedITAT Delhi29 Sept 2023AY 2017-18

Bench: Shri Chandra Mohan Garg & Shri M. Balaganesh, Accoutant Member

For Appellant: Shri Gautam Jain, Adv. &For Respondent: Shri Vivek Vardhan, Sr. DR
Section 147Section 148Section 151

assessee further pointed out that unless such fact is established by way of plausible and sustainable adverse material against the assessee, no addition u/s. 68 or any other provisions of the Act can be made in the hands of the assessee. 4.5 On careful consideration of the above submissions, first ... from the relevant part of the Ld. First Appellate order, we note that AO made addition u/s. 68 amounting to Rs. 75 lacs with the following observations and findings:- “3.1 On perusal of the bank A/c statement of the assessee, it has been found that an amount

Ruby Singh, New Delhi vs. DCIT, Central Circle-8, New Delhi

In the result, all the seven captioned appeals filed by the assessee stand dismissed in the aforesaid manner

ITA 2878/DEL/2022[2016-17]Status: DisposedITAT Delhi29 Sept 2023AY 2016-17

Bench: Shri Chandra Mohan Garg & Shri M. Balaganesh, Accoutant Member

For Appellant: Shri Gautam Jain, Adv. &For Respondent: Shri Vivek Vardhan, Sr. DR
Section 147Section 148Section 151

assessee further pointed out that unless such fact is established by way of plausible and sustainable adverse material against the assessee, no addition u/s. 68 or any other provisions of the Act can be made in the hands of the assessee. 4.5 On careful consideration of the above submissions, first ... from the relevant part of the Ld. First Appellate order, we note that AO made addition u/s. 68 amounting to Rs. 75 lacs with the following observations and findings:- “3.1 On perusal of the bank A/c statement of the assessee, it has been found that an amount

Ruby Singh, New Delhi vs. DCIT, Central Circle-8, New Delhi

In the result, all the seven captioned appeals filed by the assessee stand dismissed in the aforesaid manner

ITA 2877/DEL/2022[2015-16]Status: DisposedITAT Delhi29 Sept 2023AY 2015-16

Bench: Shri Chandra Mohan Garg & Shri M. Balaganesh, Accoutant Member

For Appellant: Shri Gautam Jain, Adv. &For Respondent: Shri Vivek Vardhan, Sr. DR
Section 147Section 148Section 151

assessee further pointed out that unless such fact is established by way of plausible and sustainable adverse material against the assessee, no addition u/s. 68 or any other provisions of the Act can be made in the hands of the assessee. 4.5 On careful consideration of the above submissions, first ... from the relevant part of the Ld. First Appellate order, we note that AO made addition u/s. 68 amounting to Rs. 75 lacs with the following observations and findings:- “3.1 On perusal of the bank A/c statement of the assessee, it has been found that an amount

Ruby Singh, New Delhi vs. DCIT, Central Circle-8, New Delhi

In the result, all the seven captioned appeals filed by the assessee stand dismissed in the aforesaid manner

ITA 2876/DEL/2022[2014-15]Status: DisposedITAT Delhi29 Sept 2023AY 2014-15

Bench: Shri Chandra Mohan Garg & Shri M. Balaganesh, Accoutant Member

For Appellant: Shri Gautam Jain, Adv. &For Respondent: Shri Vivek Vardhan, Sr. DR
Section 147Section 148Section 151

assessee further pointed out that unless such fact is established by way of plausible and sustainable adverse material against the assessee, no addition u/s. 68 or any other provisions of the Act can be made in the hands of the assessee. 4.5 On careful consideration of the above submissions, first ... from the relevant part of the Ld. First Appellate order, we note that AO made addition u/s. 68 amounting to Rs. 75 lacs with the following observations and findings:- “3.1 On perusal of the bank A/c statement of the assessee, it has been found that an amount

Ruby Singh, Delhi vs. DCIT, Central Circle-8, New Delhi

In the result, all the seven captioned appeals filed by the assessee stand dismissed in the aforesaid manner

ITA 2875/DEL/2022[2013-14]Status: DisposedITAT Delhi29 Sept 2023AY 2013-14

Bench: Shri Chandra Mohan Garg & Shri M. Balaganesh, Accoutant Member

For Appellant: Shri Gautam Jain, Adv. &For Respondent: Shri Vivek Vardhan, Sr. DR
Section 147Section 148Section 151

assessee further pointed out that unless such fact is established by way of plausible and sustainable adverse material against the assessee, no addition u/s. 68 or any other provisions of the Act can be made in the hands of the assessee. 4.5 On careful consideration of the above submissions, first ... from the relevant part of the Ld. First Appellate order, we note that AO made addition u/s. 68 amounting to Rs. 75 lacs with the following observations and findings:- “3.1 On perusal of the bank A/c statement of the assessee, it has been found that an amount

Pundits Business Pvt Ltd, Mumbai vs. ITO, Ward-2(4), Thane

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

ITA 2133/MUM/2023[2013-2014]Status: DisposedITAT Mumbai28 Sept 2023AY 2013-2014

Bench: Shri Aby T. Varkey & Shri Gagan Goyal & Pundits Business Pvt. Ltd. 301, Stanford Plaza, Near Oberoi Spring, Opposite City Mall Lane, Andheri (West) Maharashtra-400 058 ...... Appellant Vs. Ito, Ward-2(4), Ashar It Park, 6Th Floor, Road No. 16Z, Wagle Industrial Estate, Thane Pan – 400 604 ..... Respondent

For Appellant: NoneFor Respondent: Shri H. M. Bhatt, Ld. DR
Section 147Section 148Section 250Section 68

expenses @ 10% amounting to Rs. 7, 00,048/-. 4. The Ld. CIT (A) has erred in law and in facts in confirming the addition u/s 68 of the Act on account of share application money received amounting to Rs 2, 17, 00,000/- treating the same as non genuine

M/S.Vibgyor Texotech Private Limited, Mumbai vs. ACIT-8(3)(2), Mumbai

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

ITA 489/MUM/2019[2011-12]Status: DisposedITAT Mumbai27 Sept 2023AY 2011-12

Bench: Shri S. Rifaur Rahman, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Shri Vranda U. Matkari
Section 10ASection 143(3)Section 144Section 147Section 148Section 250Section 264ASection 40

Shoba Gupta v. ITO in ITA No. 461/Hyd/2013 for AY 2009-10 has discussed this issue in detail and held that addition u/s 68 of the Act can be made along with estimation of income unless the assessee establish that unexplained cash credit was arising out of the profit

M/S.Vibgyor Texotech Private Limited, Mumbai vs. ACIT-8(3)(2), Mumbai

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

ITA 1514/MUM/2018[2008-09]Status: DisposedITAT Mumbai27 Sept 2023AY 2008-09

Bench: Shri S. Rifaur Rahman, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Shri Vranda U. Matkari
Section 10ASection 143(3)Section 144Section 147Section 148Section 250Section 264ASection 40

Shoba Gupta v. ITO in ITA No. 461/Hyd/2013 for AY 2009-10 has discussed this issue in detail and held that addition u/s 68 of the Act can be made along with estimation of income unless the assessee establish that unexplained cash credit was arising out of the profit

Surjit Kaur, Jaipur vs. ITO Ward 4(3), Jpr, Jaipur

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

ITA 401/JPR/2023[2017-18]Status: DisposedITAT Jaipur27 Sept 2023AY 2017-18

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

For Appellant: Shri Mahendra Gargieya, AdvocateFor Respondent: Mrs. Monisha Choudhary, Addl. CIT
Section 115BSection 142(1)Section 144Section 145(3)Section 234ASection 234BSection 3Section 68

unexplained cash credit: The ld. AO erred in law as well as on the facts of the case in making addition u/s 68 of the Act, of a huge amount of Rs. 57,22,400/- being the credit appearing in bank account during the demonetization period

Income Tax Officer, Ward-3(2)(6), Surat vs. Rajal Rajendraabhai Patel, Surat

In the result, the appeal of the Revenue is dismissed

ITA 36/SRT/2023[2017-18]Status: DisposedITAT Surat26 Sept 2023AY 2017-18

Bench: Shri Pawan Singh, Jm & Dr. A.L. Saini, Am आयकर अपील सं./Ita No.36/Srt/2023 (िनधा"रणवष" / Assessment Year: (2017-18) (Physical Court Hearing) Income Tax Officer, Ward- Rajal Rajendrabhai Patel 3(2)(6), Surat, Room No.109, 1St Shop No.3, Labhunagar, Aai Vs. Floor, Anvil Building, Income Mata Road, Magob Dumbal, Tax Officer, Surat-395009 Surat-394101 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Awmpp 3195 K (अपीलाथ" /Assessee) (""थ"/Respondent)

For Appellant: Shri Sapnesh R. Sheth, C.AFor Respondent: Shri Ashok B. Koli, CIT-DR
Section 133(6)Section 142(1)Section 143(3)Section 69A

assessee. When the assessee had regular cash sales and deposit of cash in bank accounts and if nothing incriminating is found contrary then addition u/s 68 of such cash sale would tantamount to double taxation, as the assessee has offered entire cash sales for taxation. This way ld Counsel defended

M.K.S.Engineering Company Pvt. Ltd., Jabalpur vs. Pr. Commissioner of Income Tax - 1, Jabalpur

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

ITA 11/JAB/2021[2010-11]Status: DisposedITAT Jabalpur22 Sept 2023AY 2010-11

Bench: Shri Om Prakash Kantshri Pavan Kumar Gadaleshri Saurabh Baderiya, Vs Acit, 1752, Saraswati Colony, Central Circle, Cherital Ward, Jabalpur, Jabalpur M.P.-482002. (Appellant) (Respondent) Pan No. Ahipb3208Q Assessee By Shri Rahul Bardia, Fca Revenue By Shri Saad Kidwai, Cit Dr Date Of Hearing 21/09/2023 Date Of Pronouncement 22/09/2023

Section 132Section 153ASection 153DSection 68

light of above facts and case laws as discussed above, I am of the considered view that the AO was justified to make addition u/s 68 of the IT Act. Therefore, the addition made by the AO amounting to Rs.26,99,878/- is Confirmed. Therefore, the appeal on these grounds

Assistant Commissioner of Income Tax Circle-Satna, Satna vs. M/S. Ram Kumar Suresh Kumar, Satna

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

ITA 136/JAB/2018[2013-14]Status: PendingITAT Jabalpur22 Sept 2023AY 2013-14

Bench: Shri Om Prakash Kantshri Pavan Kumar Gaaleasst. Commissioner Of Vs Shri Ram Kumar Income Tax, Circle-Satna, Suresh Kumar, Satna Birla Road, Satna (Appellant) (Respondent) Pan No. Aaffr3899D Revenue By Shri Shravan Kumar Gotru, Cit Dr Assessee By Shri Rahul Bardia, Fca Date Of Hearing 13/09/2023 Date Of Pronouncement 22/09/2023 O R D E R Per Om Prakash Kant, A.M.: This Appeal By The Revenue Is Directed Against Order Dated 12.03.2018 Passed By Ld. Commissioner Of Income Tax(Appeals)-1, Jabalpur [In Short “Ld.Cit(A)”] For The Assessment Year 2013-14, Raising Following Grounds:

Section 133(6)Section 68

therefore, corresponding amount of the money for cash purchase becomes unexplained in the hands of the assessee. Therefore, without prejudice to the addition u/s 68 of the Act, alternatively, the addition u/s 69A of the Act is justified. 6.4 Therefore, we feel it appropriate to set aside the order

Assistant Commissioner of Income Tax (Central), Bilaspur vs. M/S Jagannathdas Harichandmal Jewellers Pvt. Ltd, Raigarh

In the result appeal of revenue is partly allowed in terms of our observations herein above

ITA 106/RPR/2022[2012-13]Status: DisposedITAT Raipur22 Sept 2023AY 2012-13

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अपील सं./Ita No.106/Rpr/2022 िनधा"रण वष" /Assessment Year: 2012-13 The Assistant Commissioner Of Vs M/S. Jagannathdas Harichandmal Income Tax (Central), Bilaspur Jewellers Pvt. Ltd. Sadar Bazar, Raigarh (C.G.) Pan: Aaccj2840G (अपीलाथ" /Appellant) (""यथ" / Respondent) .. िनधा"रती क" ओर से /Assessee By : Shri Sunil Kumar Agrawal, Ca राज"व क" ओर से /Revenue By : Shri Choudhary N.C. Roy, Sr. Dr सुनवाई क" तार"ख / Date Of Hearing : 14/07/2023 घोषणा क" तार"ख/Date Of Pronouncement : 22/09/2023 आदेश / O R D E R Per Arun Khodpia, Am : The Captioned Appeal Is Filed By The Revenue Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals)-3, Bhopal, Dated 16.03.2022 Which In Turn Arises From The Order By Ld. Assessing Officer U/S 143(3) R.W.S. 147 Dated 30.12.2018 For A.Y.2012-13. The Grounds Of The Appeal Raised By The Revenue Are As Under: “ 1. Whether On The Fact & In The Circumstances Of The Case In Law, While Holding Assessment Passed U/S 147 R.W.S. 143(3) Of Act As Invalid & Void-Ab-Initio, The Ld. Cit(A) Completely Ignored The Fact That During The Course Of Survey, The Assessee Failed To Discharge Its Burden In Establishing 'The Identity, Creditworthiness & Genuineness Of The Transactions As Required U/S 68 Of The Income Tac Act. Ld. Cit(A) Erred In Ignoring That Reassessment Proceeding Are Based On Fresh Facts/Information Rather Than Change Of Opinion. 2. Whether On The Fact & In The Circumstances Of The Case In Law, The Ld.Cit(A) Erred In Ignoring That Confirmation Of Concealment Of Income/Disclosure Made In Statement Recorded During Survey U/S 133A Of Act Is An Information, Though Not Conclusive, Which May Be Used In Regular Assessment Or Reassessment Proceedings.

For Appellant: Shri Sunil Kumar Agrawal, CAFor Respondent: Shri Choudhary N.C. Roy, Sr. DR
Section 133ASection 143(3)Section 147Section 148Section 68

then AO investigated the issue under consideration in depth and found the share application money as genuine and therefore, did not make any addition u/s 68 of the Act on this account. 3.1.3 Thereafter, after a gap of three years, survey proceedings u/s 133A of the Act were carried

Mehboob Amirali Kamdar, Mumbai vs. ITO Ward 42(1)(3), Mumbai

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

ITA 1969/MUM/2023[2013-14]Status: DisposedITAT Mumbai21 Sept 2023AY 2013-14

Bench: Shri B.R. Baskaran (Am) & Shri Narender Kumar Choudhry (Jm)

Section 68

There should not be any dispute that when there was no actual receipt of money from Kukreja Constructions, the question of making any addition u/s 68 will not arise. Since the assessee has not furnished proper details as discussed above in order to substantiate its claim ... information/explanation in this regard. If there is no actual receipt of money as submitted by the assessee, then the question of making addition u/s 68 of the Act will not arise. After examining the issue, the AO may take appropriate decision. 10. In the result, the appeal filed

Shri Mohd Manzoor, Rajouri vs. Income Tax Officer Ward -2 (3), Jammu

In the result, the appeal of the assessee bearing ITA No

ITA 166/ASR/2022[2017-18]Status: HeardITAT Amritsar21 Sept 2023AY 2017-18

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 144Section 250oSection 28Section 44ASection 69A

earlier, is unexplained. h) IN THE HIGH COURT OF DELHI SANJIV KHANNA AND CHANDER SHEKHAR, JJ ITA NO 315/2005 JAYA AGGARWALVSINCOME TAX OFFICER Addition u/s 68 for cash withdrawn and cash deposited - Assessee withdrew Rs.2 lakhs to buy immovable property in cash from bank account and re-deposited cash ... from the amount withdrawn after more than 7 months as the deal could not be finalized. HC held that addition u/s 68 of amount re-deposited was unjustified, noting that one should not consider and reject an explanation as concocted and contrived by applying the prudent man's behavior test

Assistant Commissioner of Income Tax, Central Circle-1(1), Nagpur vs. M/S Nitin Coal Pvt. Ltd., Nagpur

Appeal is dismissed in above terms

ITA 91/NAG/2018[2012-13]Status: DisposedITAT Nagpur21 Sept 2023AY 2012-13

Bench: Shri Satbeer Singh Godara & Shri Gd Padmahshali

For Appellant: NoneFor Respondent: Shri Rishi Kumar Bisen, DR
Section 143(3)Section 68

circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate that the two key ingredients in making addition u/s 68 namely creditworthiness of creditors and genuineness of the transactions were not proved to the satisfaction of the A.O.” 4. The Revenue could hardly dispute