“share application money”

Cash Credits & Unexplained ItemsSection 68Section 682,489 judgments

The decision most relied on for share application money is CIT v. Lovely Exports (P) Ltd. (216 CTR 195), cited in 854 judgments on BharatTax.

Leading authorities on share application money

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.

(Central)-1 v. NRA Iron & Steel (P) Ltd.

103 Taxmann.com 48 · 2019 · Supreme Court

696

citing judgments

When assessing cash credits, share capital, or loans, the assessee bears the onus to prove the identity, creditworthiness, and genuineness of transactions. This burden is not discharged merely by documentary evidence if field inquiries reveal accommodation entries or dealings with paper/shell companies.

Commissioner of Income Tax v. Nova Promoters and Finlease (P) Ltd.

342 ITR 169 · 2012 · High Court

658

citing judgments

To make an addition under Section 68 for unexplained cash credits, the Assessing Officer must conduct proper inquiry into the identity, genuineness, and creditworthiness of the creditor, especially concerning share application money. The assessee's initial discharge of burden by providing necessary details shifts the onus back to the AO for further investigation, including the source of source.

Nemi Chand Kothari v. CIT

264 ITR 254 · 2003 · High Court

340

citing judgments

For a cash credit, merely transacting by cheque is insufficient to discharge the assessee's burden of proof. The assessee must prove the identity of the creditors, the genuineness of the transaction, and the creditworthiness of the creditors; upon which, the burden shifts to the revenue.

CIT v. Kamdhenu Steel & Alloys Ltd.

361 ITR 220 · 2014 · High Court

328

citing judgments

When making an addition under section 68, the creditworthiness or financial strength of an investor contributing share capital or share application money can be proved by producing their bank statements showing sufficient balance for the investment. The Supreme Court dismissed the SLP against this decision.

CIT v. Sophia Finance Ltd.

205 ITR 98 · 1994 · High Court

295

citing judgments

To discharge the burden of proof under Section 68 for share capital or share application money, an assessee must establish the identity of the shareholders and the genuineness of the transaction, confirming that the payment was truly made by them.

CIT v. Oasis Hospitalities P. Ltd.

333 ITR 119 · 2011 · High Court

292

citing judgments

When explaining cash credits under Section 68, the assessee must establish the identity of the creditor, their creditworthiness or financial capacity, and the genuineness of the transaction. Merely proving identity does not discharge this initial onus, which shifts to the Assessing Officer once these three elements are prima facie proven.

CIT v. Nipun Builders & Developers

350 ITR 407 · 2013 · High Court

264

citing judgments

For any sum credited in an assessee's books, including share application money, the assessee must prove the identity and creditworthiness of the creditor and the genuineness of the transaction. Failure to discharge this onus under Section 68 renders the amount taxable.

Judgments citing share application money

Income Tax Ward 4(2)(3) Ahmedabad, Ahmedabad vs. Nikulbhai Chaturbhai Patel HUF, Gandhinagar

In the result, the appeal of the assessee is allowed

ITA 267/AHD/2025[2016-17]Status: DisposedITAT Ahmedabad18 Sept 2025AY 2016-17

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Respondent by: Shri Rignesh Das, CIT-DR & Shri HargovindFor Respondent: Shri Rignesh Das, CIT-DR & Shri Hargovind

Section 143(1)Section 143(3)Section 147Section 148Section 250Section 68Section 69

Kumar Jain who stated that he was engaged in the business of providing accommodation entries in the form of bogus unsecured loans, bogus share application money etc. The Department has made addition on the ground that the assessee company had received a sum of 1,00,00,000/- from

Income Tax Ward 4(2)(3) Ahmedabad, Ahmedabad vs. Nikulbhai Chaturbhai Patel HUF, Gandhinagar

In the result, the appeal of the assessee is allowed

ITA 266/AHD/2025[2014-15]Status: DisposedITAT Ahmedabad18 Sept 2025AY 2014-15

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Respondent by: Shri Rignesh Das, CIT-DR & Shri HargovindFor Respondent: Shri Rignesh Das, CIT-DR & Shri Hargovind

Section 143(1)Section 143(3)Section 147Section 148Section 250Section 68Section 69

Deputy Commissioner of Income Tax, Circle 2(1)(1), Vadodara vs. Truform Techno Products Private Limited, Nagpur

In the result, the appeal of the Revenue is partly allowed

ITA 1776/AHD/2024[2012-13]Status: DisposedITAT Ahmedabad18 Sept 2025AY 2012-13

Bench: Shri Sanjay Garg & Shri Narendra Prasad Sinhaassessment Year: 2009-10

Section 143(2)Section 143(3)Section 147Section 148Section 151Section 68Section 78(2)

further submitted that in some of the bank accounts, credit by way of cheque receipts was appearing just prior to the payment of share application money to the assessee, the source of which was not explained by the assessee. He further submitted that the assessee did not furnish the details

Deputy Commissioner of Income Tax, Circle 2(1)(1), Vadodara vs. Truform Techno Products Private Limited, Nagpur

In the result, the appeal of the Revenue is partly allowed

ITA 1775/AHD/2024[2009-10]Status: DisposedITAT Ahmedabad18 Sept 2025AY 2009-10

Bench: Shri Sanjay Garg & Shri Narendra Prasad Sinhaassessment Year: 2009-10

Section 143(2)Section 143(3)Section 147Section 148Section 151Section 68Section 78(2)

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Raja Shelters Private Limited, Kolkata

ITA 1176/KOL/2025[2014-15]Status: DisposedITAT Kolkata18 Sept 2025AY 2014-15

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubeyita Nos.1174 & 1176/Kol/2025 Assessment Years: 2011-12 & 2014-15 Dcit, Central Circle-4(3), Kolkata.……………………….……….……….……Appellant Vs. Raja Shelters Pvt. Ltd…………………….…………………….....……...…..…..Respondent 25A, S. P. Mukherjee Road, Kol- 700025. [Pan: Aadcr5073Q] Appearances By: Shri Sanat Kr. Raha, Cit-Dr, Appeared On Behalf Of The Appellant. Shri Miraj D. Shah, Ar, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : September 11, 2025 Date Of Pronouncing The Order : September 18, 2025 Order Per Pradip Kumar Choubey: Both The Captioned Appeals Have Been Preferred By The Revenue For The Assessment Years 2011-12 & 2014-15 Against Separate Orders Dated 27.02.2025 & 28.02.2025 Of The Commissioner Of Income Tax (Appeals)-27, Kolkata [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’) Respectively. Since, The Issues Involved In Both The Appeals Are Common & Relate To The Same Assessee, Therefore, These Appeals Have Been Heard Together & Are Being Disposed Of By This Consolidated Order.

Section 127Section 132Section 133ASection 139Section 142(1)Section 143(2)Section 153ASection 250Section 271(1)(c)Section 68

Rs.60,00,000/- for unexplained cash credit u/s 68 of the Act on account of amount received by the assessee in terms of share application money. Raja Shelters Pvt. Ltd 3. Aggrieved by the said order, the assessee preferred appeal before the ld. CIT(A), wherein, the appeal ... deleting the addition made u/s.68 of the Income-tax Act., 1961 amounting to Rs.60,00,000/- received in the guise of bogus share application money, details of which were obtained from the seized material vide GG/3 seized from the office of the assessee. 2. That on the facts

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Raja Shelters Private Limited, Kolkata

In the result, both the captioned appeals of the revenue are

ITA 1175/KOL/2025[2013-14]Status: DisposedITAT Kolkata18 Sept 2025AY 2013-14

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubey

Section 127Section 132(1)Section 133ASection 139Section 142(1)Section 143(2)Section 153ASection 250Section 68

Rs.15,00,000/- for unexplained cash credit u/s 68 of the Act on account of amount received by the assessee in terms of share application money. 3. Aggrieved by the said order, the assessee preferred appeal before the ld. CIT(A) wherein, the appeal of the assessee has been allowed ... erred in deleting the addition made u/s.68 of the Income-tax Act., 1961amounting to Rs.15,00,000/- received in the guise of bogus share application money, details of which were obtained from the seized material vide GG/3 seized from the office of the assessee

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Raja Shelters Private Limited, Kolkata

ITA 1174/KOL/2025[2011-12]Status: DisposedITAT Kolkata18 Sept 2025AY 2011-12

Section 127Section 132Section 133ASection 139Section 142(1)Section 143(2)Section 153ASection 250Section 271(1)(c)Section 68

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Raja Shelters Private Limited, Kolkata

In the result, both the captioned appeals of the revenue are dismissed

ITA 1173/KOL/2025[2009-10]Status: DisposedITAT Kolkata18 Sept 2025AY 2009-10

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubeyita Nos.1173 & 1175/Kol/2025 Assessment Years: 2009-10 & 2013-14 Dcit, Central Circle-4(3), Kolkata.……………………….……….……….……Appellant Vs. Raja Shelters Pvt. Ltd…………………….…………………….....……...…..…..Respondent 25A, S. P. Mukherjee Road, Kol- 700025. [Pan: Aadcr5073Q] Appearances By: Shri Sanat Kr. Raha, Cit-Dr, Appeared On Behalf Of The Appellant. Shri Miraj D. Shah, Ar, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : September 11, 2025 Date Of Pronouncing The Order : September 18, 2025 Order Per Pradip Kumar Choubey: Both The Captioned Appeals Have Been Preferred By The Revenue For The Assessment Years 2009-10 & 2013-14 Against Separate Orders Dated 21.02.2025 & 25.02.2025 Of The Commissioner Of Income Tax (Appeals)-27, Kolkata [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’) Respectively. Since, The Issues Involved In Both The Appeals Are Common & Relate To The Same Assessee, Therefore, These Appeals Have Been Heard Together & Are Being Disposed Of By This Consolidated Order.

Section 127Section 132(1)Section 133ASection 139Section 142(1)Section 143(2)Section 153ASection 250Section 68

unexplained cash credit u/s 68 of the Act on account of amount received by the assessee in terms of share application money. 3. Aggrieved by the said order, the assessee preferred appeal before the ld. CIT(A) wherein, the appeal of the assessee has been allowed on technical ground pertaining ... erred in deleting the addition made u/s.68 of the Income-tax Act., 1961amounting to Rs.15,00,000/- received in the guise of bogus share application money, details of which were obtained from the seized material vide GG/3 seized from the office of the assessee

Income Tax Officer- 15(1)(1), Mumbai vs. Ellora Hitech Infra Venture Private Limited, Navi Mumbai

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

ITA 4657/MUM/2025[2012-13]Status: DisposedITAT Mumbai18 Sept 2025AY 2012-13

Bench: Ms. Kavita Rajagopal & Smt. Renu Jauhriincome Tax Officer-15(1)(1) Vs. Ellora Hitech Infra Venture Room No. 456, 4Th Floor, Private Limited Aayakar Bhawan, Plot No. 8, Ellora Fiesta, M.K. Road, Sector-11, Opp. Jui Nagar Mumbai-400020. Railway, Sanpada, Navi Mumbai-400706. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aacce2217N Appellant .. Respondent

For Appellant: Smt. Ritika AgarwalFor Respondent: Shri Hemanshu Joshi, Sr. DR

Section 143(3)Section 250Section 69

During the course of appellate proceedings, it was contended by the assessee that the source of cash payment was receipt of share application money in cash from one of the directors, Shri. Vijay Gajra and furnished certain documents in support of its claim. also furnished additional evidence on which

Dodhia Filaments Private Limited, Bhiwandi vs. DCIT-CC-3, Thane

ITA 795/MUM/2025[2013-14]Status: DisposedITAT Mumbai17 Sept 2025AY 2013-14

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 143(3)Section 147Section 250Section 68

made by the Ld. Assessing Officer in the impugned assessment order on account of share application money received by the assessee from M/s Agomoni Commercial P Ltd, M/s Bagdevi Suppliers P Ltd, M/s Prayagpour Vyapar P Ltd and M/s Value Added Merchants P Ltd, that was treated as unexplained cash ... assessee’s case and in law, the Ld. Commissioner of Income Tax 4 (Appeals) erred in upholding the addition u/s 68 of share application money of Rs 1,50,00,000/-: a) by holding share application money as accommodation entries, without there being any evidence of cash paid

Dodhia Synthetics Limited, Bhiwandi vs. DCIT-CC-3, Thane

ITA 2204/MUM/2025[2020-21]Status: DisposedITAT Mumbai17 Sept 2025AY 2020-21

Section 143(3)Section 147Section 250Section 68

made by the Ld. Assessing Officer in the impugned assessment order on account of share application money received by the assessee from M/s Agomoni Commercial P Ltd, M/s Bagdevi Suppliers P Ltd, M/s Prayagpour Vyapar P Ltd and M/s Value Added Merchants P Ltd, that was treated as unexplained cash ... assessee's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition u/s 68 of share application money of Rs 1,50,00,000/-: a) by holding share application money as accommodation entries, without there being any evidence of cash paid at the time

Dodhia Synthetics Limited, Bhiwandi vs. DCIT-CC-3, Thane

The appeal of the assessee is Allowed on the

ITA 2190/MUM/2025[2013-14]Status: DisposedITAT Mumbai17 Sept 2025AY 2013-14

Section 143(3)Section 147Section 250Section 68

made by the Ld. Assessing Officer in the impugned assessment order on account of share application money received by the assessee from M/s Agomoni Commercial P Ltd, M/s Bagdevi Suppliers P Ltd, M/s Prayagpour Vyapar P Ltd and M/s Value Added Merchants P Ltd, that was treated as unexplained cash ... assessee's case and in law, the Ld. Commissioner of Income Tax 4 (Appeals) erred in upholding the addition u/s 68 of share application money of Rs 1,50,00,000/-: a) by holding share application money as accommodation entries, without there being any evidence of cash paid

Dodhia Synthetics Limited, Bhiwandi vs. DCIT-CC-3, Thane

ITA 2189/MUM/2025[2013-14]Status: DisposedITAT Mumbai17 Sept 2025AY 2013-14

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 143(3)Section 147Section 250Section 68

DCIT, Central Circle -3, Thane vs. Dodhia Synthetics Limited, Bhiwandi

ITA 2106/MUM/2025[2015-16]Status: DisposedITAT Mumbai17 Sept 2025AY 2015-16

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 143(3)Section 147Section 250Section 68

DCIT, Central Circle -3, Thane vs. Dodhia Synthetics Limited, Bhiwandi

The appeal of the assessee is Allowed on the

ITA 2105/MUM/2025[2014-15]Status: DisposedITAT Mumbai17 Sept 2025AY 2014-15

Section 143(3)Section 147Section 250Section 68

made by the Ld. Assessing Officer in the impugned assessment order on account of share application money received by the assessee from M/s Agomoni Commercial P Ltd, M/s Bagdevi Suppliers P Ltd, M/s Prayagpour Vyapar P Ltd and M/s Value Added Merchants P Ltd, that was treated as unexplained cash ... assessee's case and in law, the Ld. Commissioner of Income Tax 3 (Appeals) erred in upholding the addition u/s 68 of share application money of Rs 1,50,00,000/-: a) by holding share application money as accommodation entries, without there being any evidence of cash paid