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“identity of creditor”

Cash Credits & Unexplained ItemsSection 68Section 68515 judgments

The decision most relied on for identity of creditor is CIT v. Orissa Corporation Pvt. Ltd. (159 ITR 78), cited in 897 judgments on BharatTax.

Leading authorities on identity of creditor

CIT v. Orissa Corporation Pvt. Ltd.
159 ITR 78 · 1986 · Supreme Court
897
citing judgments

When an assessee provides the identity and address of a creditor or investor for a cash credit or share capital under Section 68, the burden shifts to the Department to establish lack of genuineness or creditworthiness, requiring it to conduct further inquiries; mere non-compliance by third parties to summons cannot be the sole basis for an adverse inference against the assessee.

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.

DCIT v. Rohini Builders
256 ITR 360 · 2002 · High Court
489
citing judgments

An assessee discharges the initial onus under Section 68 for cash credits by providing creditor details like PAN and addresses, proving creditworthiness via banking transactions, and demonstrating genuineness, especially when loans are repaid through cheques.

Roshan Di Hatti v. CIT
107 ITR 938 · 1977 · Supreme Court
477
citing judgments

An assessee bears the onus to prove the identity, creditworthiness, and genuineness of any cash credit or transaction. If the assessee fails to discharge this burden with cogent evidence and explanation, the Assessing Officer is justified in making additions to their income, and no further burden lies on the revenue.

CIT v. Precision Finance Pvt. Ltd.
208 ITR 465 · 1994 · High Court
427
citing judgments

When an assessee seeks to explain a cash credit under Section 68, they must prove the identity of the creditors, their creditworthiness or capacity to advance money, and the genuineness of the transactions. The burden of proof is not discharged merely by filing confirmatory letters or demonstrating banking channel transactions.

CIT v. Divine Leasing & Finance Ltd.
299 ITR 268 · 2008 · High Court
426
citing judgments

An assessee introducing share capital or share premium must establish the identity, genuineness of the transaction, and creditworthiness of the immediate investor or creditor; the burden does not extend to proving the 'source of source' or the financial capacity of the investor's sub-creditors.

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. Gagandeep Infrastructure (P.) Ltd.
394 ITR 680 · 2017 · High Court
303
citing judgments

Under Section 68, an assessee is only required to prove the identity and creditworthiness of the immediate creditor or share subscriber and the genuineness of the transaction. The assessee is not obligated to establish the 'source of the source' of funds or the creditworthiness of sub-lenders, as this information may not be within the assessee's special knowledge.

Judgments citing identity of creditor

ACIT, New Delhi vs. M/S. Vikas Chain Co. Pvt. Ltd., New Delhi

In the result, both the appeals of Revenue are allowed for statistical purposes

ITA 4128/DEL/2014[2008-09]Status: DisposedITAT Delhi13 Oct 2023AY 2008-09

Bench: Shri Chandra Mohan Garg & Shri Girish Agrawalassessment Year: 2008-09 The Acit, Central Circle-23, New Delhi M/S. Vikas Chain Co. Pvt. Ltd., 2608/3, 1St Floor, Bank Street, Vs. Beedonpura Karol Bagh, New Delhi Pan Aaccv 3351 N (Appellant) (Respondent) Assessment Year: 2008-09 The Acit, Central Circle-23, New Delhi M/S. Vikas Diamond Co. Pvt. Ltd., 2608/3, 1St Floor, Bank Street, Vs. Beedonpura Karol Bagh, New Delhi Pan Aaccv 0491 N (Appellant) (Respondent) For Assessee : Dr. Rakesh Gupta Shri Somil Agarwal, Adv. Revenue For : Shri Vivek Vardhan, Sr.Dr Date Of Hearing : 12.09.2023 Date Of Pronouncement : 13.10.2023 Order Per Chandra Mohan Garg, J.M. The Captioned Appeals Have Been Filed By The Revenue Against The Orders Of Ld. Cit-Xxxiii, New Delhi Both Dated 24.02.2014 For Ay 2008-09. Since Ld. Representatives Of Both The Sides Submitted That Regarding Ground No. 1 To 3 Of Revenue The Facts Are Similar & Identical Therefore Both The Appeals Are Being Adjudicated By This Consolidated Order For The Sake Of Brevity & Convenience.

For Appellant: Dr. Rakesh Gupta

persons, namely, Murti Devi, Devender Kumar and Mahinder Pal, Ld. Assessing Officer has commented that the appellant has not proved genuine of transaction, identity of creditors and creditworthiness of the creditors. In response to these objections, Ld. AR argued that all these creditors to whom shares have been allotted, were

ITO, Ward, Phalodi vs. M/S Rama Allure LLP, Jodhpur

In the result, appeal of the revenue is dismissed

ITA 135/JODH/2023[2020-21]Status: DisposedITAT Jodhpur09 Oct 2023AY 2020-21

Bench: The Date, The Appeal Is Finally Heard.”

Section 142(1)Section 143(2)Section 143(3)

satisfactory". Same principle applies to section 68. For taxing loan creditors u/s 68, the assessee is required to prove: (a) Identity of creditor (b) Genuineness of transaction; and (c) Creditworthiness of creditor. Once an assessee has submitted the documents such as (i) PAN, (ii) income-tax returns of creditors

Girdhari Lal Meena, Jaipur vs. Income Tax Officer, Jaipur

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

ITA 118/JPR/2023[2017-18]Status: DisposedITAT Jaipur05 Oct 2023AY 2017-18

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri S. K. Gogra (C.A.)For Respondent: Sh. Anup Singh (Addl. CIT) a
Section 115BSection 139(1)Section 143(2)Section 143(3)Section 144(1)

Calcutta High Court has held that under the scheme of Section 68" it was necessary for the assessee to prove prima facie the identity of creditors, the capacity of such creditors and lastly the genuineness of transactions" 6.7 Similarly, in the case of CIT v. Precision Finance ... observed that “It is for the assessee to prove the identity of creditors, their creditworthiness and genuineness of transactions.” 8 Girdhari Lal Meena vs. ITO 6.8 While examining the issue of genuineness of the transactions entered into by the assessee, it is also important to keep in mind

Tirupati Developers, Mumbai vs. ITO Ward-17(3)(4), Mumbai

In the result the appeal of the assessee is partly allowed

ITA 1851/MUM/2023[2010-11]Status: DisposedITAT Mumbai27 Sept 2023AY 2010-11

Bench: Shri Amarjit Singh

For Appellant: Shri. Prateek JainFor Respondent: Shri. Prakash Kishinchandani
Section 143(1)Section 147Section 148Section 250Section 69

assessee has obtained bogus loan from the M/s Parvati export which was bogus entity of Shri. Bhawarlal Jain. The assessee claimed that identity of creditors has been established on the basis of the Pan Card, return of income, account confirmation and genuineness of the transactions have been established

Tirupati Developers, Mumbai vs. ITO Ward-17(3)(4), Mumbai

In the result the appeal of the assessee is partly allowed

ITA 1850/MUM/2023[2012-2013]Status: DisposedITAT Mumbai27 Sept 2023AY 2012-2013

Bench: Shri Amarjit Singh

For Appellant: Shri. Prateek JainFor Respondent: Shri. Prakash Kishinchandani
Section 143(1)Section 147Section 148Section 250Section 69

assessee has obtained bogus loan from the M/s Parvati export which was bogus entity of Shri. Bhawarlal Jain. The assessee claimed that identity of creditors has been established on the basis of the Pan Card, return of income, account confirmation and genuineness of the transactions have been established

Apl Metals Limited, Kolkata vs. ACIT, Central Circle - 3(3), Kolkata

ITA 297/KOL/2023[2018-19]Status: DisposedITAT Kolkata15 Sept 2023AY 2018-19

Bench: Dr. Manish Borad, Am & Shri Sonjoy Sarma, Jm I.T.A. No.297/Kol/2023 Assessment Years: 2018-19 Apl Metals Ltd. Vs. Income Tax Officer, National C/O, Subash Agarwal & Faceless Assessment Centre, Associates, Advocates, Siddha Delhi. Gibson, 1, Gibson Lane, Suite 213, 2Nd Floor, Kolkata- 700069. (Pan: Aacca4246P) (Appellant) (Respondent)

Section 115BSection 143(2)Section 143(3)Section 250Section 69C

going beyond the submission of some documents. Sankar Industries 114 ITR 689 (Cal) It has been held that the Assessee must prove identity of creditor, capacity of creditor to advance money and genuineness of transaction mere proof of identity not enough nor is the mere submission of documents enough

Shri Radheshyam Patel, Indore vs. The ITO- 2(3), Indore

ITA 206/IND/2013[2007-08]Status: DisposedITAT Indore12 Sept 2023AY 2007-08

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2007-08 Shri Radheshyam Patel, Ito, Prop. Of M/S. Geetanjali Ward 2(3), बनाम/ & Cold Storage, Indore Bicholi Mardana, Vs. Indore (Assessee / Appellant) (Revenue / Respondent) Pan: Abppp3172N Assessee By Shri S.S. Deshpande, C.A. Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 10.08.2023 Date Of Pronouncement 12.09.2023

Section 133(6)Section 143(3)Section 68

dispute because the same is proved sufficiently by documents brought on record as narrated earlier. In fact, Ld. DR is also accepting the identity of creditors. But then, the law of section 68 requires something more than mere proving identity i.e. the genuineness of transactions and creditworthiness of the creditors

Vrushali Sanjay Shinde, Mumbai vs. DCIT, CC- 1, Thane

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

ITA 198/MUM/2022[2008-09]Status: DisposedITAT Mumbai08 Sept 2023AY 2008-09

Bench: Shri Kuldip Singh, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blevrushali Sanjay Shinde V. Dcit, Central Circle-1 282, Boundary Road B-101, Marigold, Prestige Residency G.B. Road, Kavesar, Thane- 400607 Civil Line, Meerut - 250001 Pan: Ajnps5211K (Appellant) (Respondent) Assessee Represented By : Shri Sankalp Malik Department Represented By : Shri Shanti Subramanian

Section 132Section 142Section 142(1)Section 153ASection 153C

well settled law that in order to discharge his onus u/s 68 of the Act, the assessee is required to substantiate the identity of creditor, the creditworthiness of the creditor and the genuineness of the transaction. It is also a well settled law that filing of mere confirmation from

Aman Exports International, Jaipur vs. DCIT Circle 1, Jaipur

In the result, appeal of the assessee is partly allowed

ITA 147/JPR/2023[2012-13]Status: DisposedITAT Jaipur24 Aug 2023AY 2012-13

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

For Appellant: Sh. Manish Tatiwal (CA)For Respondent: Smt. Runi Pal (Addl. CIT) &
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 148Section 40A(3)

Precision Finance (P.) Ltd. [1994] 208 ITR 465/[1995] 82 Taxman 31, laid down that an assessee is expected to establish Identity of creditors Capacity of creditors to advance money Genuineness of transaction• The Hon'ble Supreme Court in Kale Khan Mohd. Hanif v. CIT [1963] 50 ITR 1 held ... covered under section 40A(3). Ground No. 4 That the assesse provided all relevant documents confirmations to prove genuineness creditworthiness and identity of creditor hence the addition made treating the same as purchase as bad in law and hence no further addition in respect of other disallowance can be made

Shri Naresh Navlani, Indore vs. The DCIT Central Circle -2 Indore, Indore

ITA 391/IND/2022[2019-20]Status: DisposedITAT Indore18 Aug 2023AY 2019-20

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year:2019-20 Shri Naresh Navlani, Dcit/Acit, 39, Sai Bagh Colony, (Central Circle)-2, बनाम/ Khandwa Road, Indore. Vs. Indore (Assessee / Appellant) (Revenue / Respondent) Pan: Aazpn2242G Assessee By Shri S.N. Agarwal, Ca Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 24.05.2023 Date Of Pronouncement 18.08.2023

Section 143(3)Section 68

card. The A/c confirmation is duly signed by creditor and contains full address as well as PAN of creditor. Thus, the identity of creditor is duly proved by these primary documents. The Bank Pass Book clearly shows that the creditor received a sum of Rs. 10,00,000/- through clearing

M/S. Crystal Granite and Marble Private Limited, Ramanagaram vs. Deputy Commissioner of Income-Tax, Circle-2(1)(1), Bangalore

In the result, the appeal of the assessee is allowed for statistical purposes and Stay Petition is dismissed as infructuous

ITA 405/BANG/2023[2017-18]Status: DisposedITAT Bangalore17 Aug 2023AY 2017-18

Bench: Shri George George K & Shri Laxmi Prasad Sahus.P No.29/Bang/2023 Assessment Year: 2017-18

For Appellant: Shri Rajgopal, C.AFor Respondent: Smt. Vidya K, JCIT (DR)
Section 147Section 148Section 148ASection 250

Aneri Fincaps Limited as unexplained cash credit u/s 68 when all ingredients contemplated under section 68 had been duly satisfied on aspect of identity of creditors and genuineness of transactions. Moreover, loans had been granted through banking channels and copy of bank statements also had been provided. vii. The learned ... AneriFincaps Limited as unexplained cash credit u/s 68 when all ingredients contemplated under section 68 had been duly satisfied on aspect of identity of creditors and genuineness of transactions. Moreover, loans had been granted through banking channels and copy of bank statements also had been provided. (Ground

ITO, Ward-8(1), Kolkata vs. M/S Maninya Comfin Pvt Ltd, Kolkata

In the result, appeal of the revenue is partly allowed as per terms indicated hereinabove

ITA 79/KOL/2021[2012-13]Status: DisposedITAT Kolkata03 Aug 2023AY 2012-13

Bench: Dr. Manish Borad, Hon’Ble & Shri Sonjoy Sarma, Hon’Blei.T.A. No. 79/Kol/2021 Assessment Year: 2012-13 Income Tax Officer, Ward-8(1), M/S. Maninya Comfin Pvt. Ltd. Kolkata Vs 9, Lal Bazar Street Lal Bazar Kolkata - 700001 [Pan : Aadcm5088N] अपीलाथ"/ (Assessee ) "" यथ"/ (Respondent) Assessee By : Shri Vinod Kr. Jain, A/R Revenue By : Shri Vijay Kumar, Addl. Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 13/07/2023 घोषणा क" तारीख /Date Of Pronouncement: 03/08/2023 आदेश/O R D E R Per Dr. Manish Borad: This Is An Appeal Preferred By The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals)-4, Kolkata (Hereinafter Referred To As The Ld. Cit(A)”], Passed U/S 250 Of The Income-Tax Act, 1961 (Hereinafter The ‘Act’), Dated 26/09/2018 For The Assessment Year 2012-13. 2. The Assessee Has Raised The Following Grounds Of Appeal:- “1. Whether On The Facts & Circumstances Of The Case, The Ld. Cit(A) Erred In Deleting The Addition Made U/S. 68 Of Rs. 7,96,16,343/- On Account Of Unexplained Cash Credit In The Form Of Share Capital With Premium. 2. Whether On The Facts & Circumstances Of The Case The Ld. Cit(A)-4, Kol., Is Erred In Deleting The Addition Without Considering The Facts That The Source Of Fresh Share Capital Amount Was Not Properly Explained By The Assessee During The Course Of Assessment Proceedings & The Director Of The Assessee Company Did Not Appear Against Summon U/S. 131 To Substantiate The Claim Of The Assessee With Documentary Evidences. 3. Whether On The Facts & Circumstances Of The Case The Ld. Cit(A), Failed To Appreciate That When The Sums Are Credited In The Books Of Accounts

For Appellant: Shri Vinod Kr. Jain, A/RFor Respondent: Shri Vijay Kumar, Addl. CIT, D/R
Section 131Section 143(2)Section 250Section 68

that M/s Gaurav Commerce Pvt Ltd (GCPL) complied with notice u/s 133(6) and filed confirmation of loan and filed copy of ITR. Identity of creditor- It is also seen that GCPL is showing 12/2 Park Mansion, 57A Park street as its city office. This is also the address

Sampat Lal Lodha, Nathdwara vs. ITO, Ward-2, Rajsamand

In the result, both appeals of the assessee are allowed

ITA 2/JODH/2022[2011-12]Status: DisposedITAT Jodhpur02 Aug 2023AY 2011-12
Section 143(1)Section 147Section 68

assessed to tax and also appeared before the ld AO during the assessment proceeding in response to notice issued by him, therefore the identity of creditors cannot be doubted. The creditors had been examined by ld AO in assessee and also accepted such transactions. Further also the creditors have provided

Sampat Lal Lodha, Nathdwara vs. ITO, Ward-2, Rajsamand

In the result, both appeals of the assessee are allowed

ITA 1/JODH/2022[2010-11]Status: DisposedITAT Jodhpur02 Aug 2023AY 2010-11
Section 143(1)Section 147Section 68

assessed to tax and also appeared before the ld AO during the assessment proceeding in response to notice issued by him, therefore the identity of creditors cannot be doubted. The creditors had been examined by ld AO in assessee and also accepted such transactions. Further also the creditors have provided

ACIT, Circle-30(1), New Delhi vs. Bhushan Kumar Jain, New Delhi

In the result, the appeal of the revenue is allowed

ITA 72/DEL/2020[2016-17]Status: DisposedITAT Delhi31 Jul 2023AY 2016-17
For Appellant: Shri Kanav Bali Sr. DRFor Respondent: Shri Satish Kr. Agarwal, CA
Section 68

ITAT, Delhi held that "Section 68 of the Income-tax Act, 1961 - Cash credit (Loan) - Assessment year 2002-03 - Where assessee proved identity of creditors by either furnishing PAN or income-tax assessment number and other relevant details showing genuineness of transaction and creditworthiness of creditors and transaction in books ... circumstances of the case. The ld. CIT(A) has only considered the passport and bank statement of assessee which establish the identity of creditor. We are unable to see any evidence substantiating the financial capacity and position of lender who, as per assessee has undertaken transactions of more than Rs.334

Shri Darshan K Vakharia, Mumbai vs. Income Tax Officer, Ward 2(1), Mumbai

Appeal is allowed

ITA 1540/MUM/2023[2012-2013]Status: DisposedITAT Mumbai28 Jul 2023AY 2012-2013

Bench: Shri Br Baskaran, Am & Shri N. K. Choudhry, Jm आयकरअपीलसं./ I.T.A. No. 1540/Mum/2023 (निर्धारणवर्ा / Assessment Year: 2012-13) & आयकरअपीलसं./I.T.A. No. 1539/Mum/2023 (निर्धारणवर्ा / Assessment Year: 2013-14)

For Appellant: Shri. Vimal PunmiyaFor Respondent: Shri. Nagnath B. Pasale
Section 132Section 132(4)Section 147Section 250

accommodation entries provided by Mr. Vipul Vidur Bhat in the form of loan. The onus is on the borrower/the Assessee to prove the identity of creditors, credit worthiness of the creditors and genuineness of the transaction. However, in this case the Assessee has failed to discharge its onus. Mere filing

Shri Darshan K Vakharia, Mumbai vs. Income Tax Officer, Ward 2(1), Mumbai

Appeal is allowed

ITA 1539/MUM/2023[2013-2014]Status: DisposedITAT Mumbai28 Jul 2023AY 2013-2014

Bench: Shri Br Baskaran, Am & Shri N. K. Choudhry, Jm आयकरअपीलसं./ I.T.A. No. 1540/Mum/2023 (निर्धारणवर्ा / Assessment Year: 2012-13) & आयकरअपीलसं./I.T.A. No. 1539/Mum/2023 (निर्धारणवर्ा / Assessment Year: 2013-14)

For Appellant: Shri. Vimal PunmiyaFor Respondent: Shri. Nagnath B. Pasale
Section 132Section 132(4)Section 147Section 250

accommodation entries provided by Mr. Vipul Vidur Bhat in the form of loan. The onus is on the borrower/the Assessee to prove the identity of creditors, credit worthiness of the creditors and genuineness of the transaction. However, in this case the Assessee has failed to discharge its onus. Mere filing

Chiragbhai S. Gadhiya, Surat vs. I.T.O., Ward-3(2)(6), Surat

In the result, this appeal of assessee is allowed

ITA 240/SRT/2021[2016-17]Status: DisposedITAT Surat28 Jul 2023AY 2016-17

Bench: Shri Pawan Singh(Physical Hearing) Chiragbhai S. Gadhiya, I.T.O., 79, Mani Nagar Society, Nana Ward-3(2)(6), Vs. Varachha, Nr. Sarthana Jakat Naka, Surat. Surat-395006. Pan No. Ajypg 7927 K Appellant/ Assessee Respondent/ Revenue

Section 133(6)Section 143(3)Section 254(1)Section 68

flow for the year. The assessee submitted that the Assessing Officer made addition on the ground that the assessee failed to establish the identity of creditor, capacity to advance money and genuineness of transaction. The cash book submitted by assessee is rejected and addition under Section 68 of unexplained cash

Ketan Tokershi Shah, Mumbai vs. DCIT, CC--2, Thane

The appeal of the assessee is allowed

ITA 1107/MUM/2023[2016-17]Status: DisposedITAT Mumbai26 Jul 2023AY 2016-17

Bench: Vikas Awasthy () & Ms. Padmavathy S. ()

Section 143(2)Section 68

onus of explaining the nature and source of said credit entry, is on the assessee and the assessee is required to prove the identity of creditor, genuineness of transaction and the creditworthiness of the creditor by way of filing the supporting documents. In the present case, the appellant

Assistant Commissioner of Income Tax Circle-1, Jammu vs. M/S Mohd Asraf Sheikh, Jammu

In the result, the appeal of the Revenue is allowed

ITA 212/ASR/2019[2015-16]Status: DisposedITAT Amritsar26 Jul 2023AY 2015-16

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

For Appellant: Sh. Vinay Jamwal, CAFor Respondent: Smt. Ratinder Kaur, Sr. DR
Section 68

shown large sundry creditors in the course of scrutiny proceeding. The AO has provided sufficient opportunities to the appellant assesse to prove the identity of creditor, creditworthiness and genuineness of transactions with supporting evidences, such as the bank statement and 3 Asstt. CIT v. Mohd. Ashraf Sheikh ... make an attempt by providing simple certificate to certify the mode of transaction entry, yet the assessee has failed to the prove the identity of creditors by not providing any documents such as ITR, PAN and bank account 4 Asstt. CIT v. Mohd. Ashraf Sheikh statement. In the absence