← All Phrases

“creditworthiness of the creditor”

Cash Credits & Unexplained ItemsSection 68Section 68914 judgments

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

Leading authorities on creditworthiness of the 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.

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.

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.

Kale Khan Mohammad Hanif v. CIT
50 ITR 1 · 1963 · Supreme Court
581
citing judgments

The assessee bears the onus of proving the source and nature of any sum of money or receipt found to have been received by them. If the assessee fails to satisfactorily explain the receipt, the Income-tax Officer is entitled to treat it as taxable income.

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

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.

Judgments citing creditworthiness of the creditor

Assistant Commissioner of Income Tax, Kalyan vs. Chander Arjandas Manwani, Ulhasnagar

In the result, the appeal filed by the Revenue fails and is

ITA 2733/MUM/2025[2018-19]Status: DisposedITAT Mumbai25 Aug 2025AY 2018-19

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Shashank MehtaFor Respondent: Mr. Virabhadra S. Mahajan, Sr.DR
Section 143(3)Section 22Section 56(2)(vii)Section 68

this gift transaction, all three conditions such as identity of the creditor, genuineness of the transaction and the 8 ITA No. 2733/Mum/ 2025 creditworthiness of the creditor are already proved by the assessee before the Assessing Officer. Despite these evidences, Assessing Officer ignored and gave a finding that creditworthiness ... Hence, in the case of this gift transaction, all three conditions such as identity of the creditor, genuineness of the transaction and the creditworthiness of the creditor are already proved by the assessee before the Assessing Officer. Despite these evidences, Assessing Officer in the case of this donor also ignored

Assistant Commissioner of Income Tax, Jalandhar vs. M/S Jasdeep Kaur Chadha, Jalandhar

In the result, the appeal of the assessee is allowed and the revenue appeal is dismissed

ITA 359/ASR/2025[2018-19]Status: DisposedITAT Amritsar22 Aug 2025AY 2018-19

Bench: Sh. Udayan Das Gupta & Sh. Khettra Mohan Roy

Section 143(3)Section 68

However, the Worthy. CIT(A) considered the detailed submissions and documentary evidences filed by the assessee, which proves the identity, genuineness and creditworthiness of the creditors. Though, the CIT(A) has accepted the same and deleted the addition made by the Ld. AO against with regard to 4 above said ... court in the case of Vrindavan farms (supra), when the assessee had filed all the details, the burden of proving the genuineness and creditworthiness of the creditor stood discharged by the assessee. I.T.A. Nos. 250 & 359/Asr/2025 14 Assessment Year: 2018-19 28. As observed above, the requirement of explaining ‘Source

Jasdeep Kaur Chadha-Jalandhar, Punjab vs. Jao the DCIT Circle-4 Jalandhar, Punjab

In the result, the appeal of the assessee is allowed and the revenue appeal is dismissed

ITA 250/ASR/2025[2018-2019]Status: DisposedITAT Amritsar22 Aug 2025AY 2018-2019

Bench: Sh. Udayan Das Gupta & Sh. Khettra Mohan Roy

Section 143(3)Section 68

However, the Worthy. CIT(A) considered the detailed submissions and documentary evidences filed by the assessee, which proves the identity, genuineness and creditworthiness of the creditors. Though, the CIT(A) has accepted the same and deleted the addition made by the Ld. AO against with regard to 4 above said ... court in the case of Vrindavan farms (supra), when the assessee had filed all the details, the burden of proving the genuineness and creditworthiness of the creditor stood discharged by the assessee. I.T.A. Nos. 250 & 359/Asr/2025 14 Assessment Year: 2018-19 28. As observed above, the requirement of explaining ‘Source

Deputy Commissioner of Income-Tax, Madurai vs. Standard Fireworks Private Limited, Sivakasi, Tamilnadu

In the result, appeals filed by the Revenue and Cross-Objections

ITA 584/CHNY/2025[2014-15]Status: DisposedITAT Chennai22 Aug 2025AY 2014-15

Bench: Shri Aby T. Varkey & Shri Jagadish

Section 12ASection 132Section 142(1)Section 143Section 143(2)Section 143(3)Section 148Section 153ASection 68Section 80G

credit in the books to be treated as unexplained, the AO must establish: « Identity of the creditor, e Genuineness of the transaction, and ¢ — Creditworthiness of the creditor. 6.4.12 In this case, all three conditions have been satisfied. The amounts were received through bank-issued demand drafts, ensuring both the identity

Deputy Commissioner of Income Tax, Madurai vs. M/S. Standard Fireworks Private Limited, Sivakasi, Tamilnadu

In the result, appeals filed by the Revenue and Cross-Objections

ITA 583/CHNY/2025[2013-14]Status: DisposedITAT Chennai22 Aug 2025AY 2013-14

Bench: Shri Aby T. Varkey & Shri Jagadish

For Appellant: Mr.S. Sridhar, AdvocateFor Respondent: Mr.M. Mohan Babu, Addl.CIT
Section 12ASection 132Section 142(1)Section 143Section 143(2)Section 143(3)Section 148Section 153ASection 68Section 80G

credit in the books to be treated as unexplained, the AO must establish: • Identity of the creditor, • Genuineness of the transaction, and • Creditworthiness of the creditor. 6.4.12 In this case, all three conditions have been satisfied. The amounts were received through bank-issued demand drafts, ensuring both the identity

Income Tax Officer, Non Corporate Ward-3(1) Cbe, Coimbatore vs. Ksk Cold Storage, Mettupalayam

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

ITA 3330/CHNY/2024[2017-18]Status: DisposedITAT Chennai20 Aug 2025AY 2017-18

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपीलसं./I.T.A.No.3330/Chny/2024 िनधा"रण वष"/Assessment Year: 2017-18 The Income Tax Officer, Vs. Ksk Cold Storage, Non Corporate Ward 3(1), 685, Jadayampalayam Village, Coimbatore. Mettupalayam, Coimbatore 641 301. [Pan:Aarfk3964G] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से/ Appellant By : Shri Shiva Srinivas, Cit ""थ" की ओरसे/Respondent By None : सुनवाई की तारीख/Date Of Hearing : 30.07.2025 घोषणा की तारीख /Date Of Pronouncement : 20.08.2025 आदेश /O R D E R Pers.S. Viswanethra Ravi: This Appeal Filed By The Appellant-Revenue Is Directed Against The Order Dated 28.10.2024 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi For The Assessment Year 2017-18. 2. When The Appeal Was Taken Up For Hearing On 30.07.2025, We Find No Representation On Behalf Of The Assessee. Further, The Notice Issued By This Tribunal To The Assessee Returned Unserved With An Endorsement “No Such Person In This Address”. Therefore, The Assessee Is Called Absent & Set Exparte & We Proceed To Decide The Appeal On Merits After Hearing The Ld. Dr Basing On The Material Available On Record.

For Appellant: Shri Shiva Srinivas, CIT
Section 147Section 148Section 68Section 69

only objection of the Appellant-Revenue is that the assessee failed to furnish ITRs of the partners to establish the genuineness, identity and creditworthiness of the creditor. The ld. CIT(A) has rightly observed that this is not a case of unexplained cash credits or addition under section ... which would require the assessee to establish the genuineness, identity and creditworthiness of the creditor. We find that against the addition made by the Assessing Officer under section 69 of the Act, the assessee is required to furnish source of the investment and in this case, the assessee has established

Surajgovind Estates Pvt. Ltd., Kolkata vs. D.C.I.T., Circle - 4(2), Kolkata

Appeal of the assessee is allowed for statistical purposes

ITA 1186/KOL/2024[2015-2016]Status: DisposedITAT Kolkata19 Aug 2025AY 2015-2016

Bench: him and explaining relevant entries in their books of accounts. Needless to say, none of the investors appeared before the Ld. AO in response to such summons. These factors prompted the Ld. AO to make the impugned addition which duly gave credit to amounts shown against two non-resident investors viz. Ms. Pushpa Patel and Mr. Mahendra Kumar Rajivbhai Patel.

Section 131Section 133(6)Section 250Section 68

satisfaction of the Assessing Officer, so as to discharge the primary onus. ii. The Assessing Officer is duty bound to investigate the creditworthiness of the creditor/ subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders

Devngi Jewellwers Pvt. Ltd., Surat vs. DCIT, Circle-1(1)(1), Surat

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

ITA 672/SRT/2024[2017-18]Status: DisposedITAT Surat13 Aug 2025AY 2017-18

Bench: Shri Dinesh Mohan Sinha & Shri Bijayananda Pruseth, Accountant Mmber आयकरअपीलसं./Ita No.672/Srt/2024 Assessment Year: (2017-18) (Hybrid Hearing) Devngi Jewellers Pvt. Ltd. Vs. Dcit, 109 -110, Shreyas Diamond Centre, Circle – 1(1)(1), Mini Bazar, Varachha Road, Surat Surat - 395006 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Aabcd3227A (Appellant) (Respondent) Appellant By Shri Sapnesh R. Sheth, Ca Respondent By Shri Ravi Kant Gupta, Cit-Dr Date Of Hearing 31/07/2025 Date Of Pronouncement 13/08/2025

Section 115BSection 142(1)Section 144Section 145(3)Section 250Section 68

further observed by the CIT(A) that section 68 of the Act required an assessee to prove three ingredients: the identity, creditworthiness of the creditors and the genuineness of the transaction. In the instant case, the assessee failed to prove the aforementioned ingredients. Resultantly, the credit in the appellant

Doctor Bawitlung Zothankima, Aizawl vs. DCIT, Silchar

Appeal of the assessee is partly allowed for statistical purposes

ITA 212/GTY/2024[2021-22]Status: DisposedITAT Guwahati11 Aug 2025AY 2021-22

Bench: SHRI MANOMOHAN DAS, JUDICIAL MEMBER SHRI SANJAY AWASTHI (Accountant Member)

Section 10(26)Section 250Section 68Section 69A

proof has been furnished regarding the source of this amount other than a bland letter from appellant's son. The identity and creditworthiness of the creditor is not established. The nature of the receipt is also not conclusively established. Therefore, this amount is to be treated as unexplained money

ITO, Ward-6(2), Kolkata vs. Raghuvir Retailers Pvt. Ltd., Kolkata

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

ITA 1129/KOL/2025[2012-13]Status: DisposedITAT Kolkata11 Aug 2025AY 2012-13

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubeyi.T.A. No. 1129/Kol/2025 Assessment Year: 2012-2013 Income Tax Officer,………………..……………..Appellant Ward-6(2), Kolkata, Aayakar Bhawan, 6Th Floor, P-7, Chowringhee Square, Kolkata-700069 -Vs.- Raghuvir Retailers Pvt. Limited,.……….....Respondent Mandawa Shikhar, 151, Sarat Bose Road, Kolkata-700026 [Pan:Aaecr8231M] Appearances By: Shri S.B. Chakraborthy, Sr. D.R., Appeared On Behalf Of The Revenue Shri Abhisek Bansal, A.R., Appeared On Behalf Of The Assessee

Section 133(6)Section 142(1)Section 143(2)Section 147Section 148Section 68

made u/s 68 of the Act without going into the merits of the case based on unexplained fund deposits, unestablished identity, genuineness and creditworthiness of the creditors. The only economic rationale behind such transaction is to provide accommodation entries for brining back the unaccounted money/fund of the clients to their

Assistantcommissionerof Incometax, Central Circle-3(2), Kolkata, Aayakar Bhawan Poorva vs. M/S. Anubandh Financial Services Private Limited, Kolkata

In the result, both the appeal filed by the Revenue as well as the Cross Objections filed by the assessee are partly allowed for statistical purposes

ITA 2390/KOL/2024[2009-10]Status: DisposedITAT Kolkata11 Aug 2025AY 2009-10

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 131Section 143(3)Section 148Section 250Section 253Section 68

page 8 para 6.13 of the assessment order in which it is held that the assessee failed to produce evidence for the creditworthiness of the creditors and genuineness of the credits for the share capital and the premium received. A query was raised by the Bench as to what ... case required entail a deeper scrutiny. It would be incorrect to state that the onus to prove the genuineness of the transaction and creditworthiness of the creditor stands discharged in all cases if payment is made through banking channels. Whether or not onus is discharged depends upon facts of each

ITO 5(2)(1), Mumbai vs. Motiwala and Sons Gold and Diamonds Pvt. Ltd., Byculla

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

ITA 1896/MUM/2025[2022-23]Status: DisposedITAT Mumbai11 Aug 2025AY 2022-23

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

Section 133(6)Section 142(1)Section 250Section 69C

books of accounts, merely producing a ledger cannot be considered as proof. The assessee did not produce any substantive evidence to prove the creditworthiness of the Creditor and genuineness of the transaction. Owing to the failure of the assessee in this regard, it became necessary to gather further evidence about

DCIT Central Circle-8(1), Mumbai vs. Shivshankar Ramswaroop Sharma, Mumbai

In the result, all the appeals filed by the revenue are dismissed and the assessee’s appeals are partly allowed

ITA 2730/MUM/2025[2014-15]Status: DisposedITAT Mumbai08 Aug 2025AY 2014-15

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 132Section 132(4)Section 143(3)

legal requirement under section 68 is threefold: the assessee must establish the identity of the creditor, the genuineness of the transaction, and the creditworthiness of the creditor. On all three counts, the assessee has discharged the initial burden. In the absence of any rebuttal by the Revenue, sustainable

Shri Shiv Shankar Sharma, Mumbai vs. Assistant Commissioner of Income Tax, Central Circle 4(3), Mumbai

In the result, all the appeals filed by the revenue are dismissed and the assessee’s appeals are partly allowed

ITA 2682/MUM/2025[2013-14]Status: DisposedITAT Mumbai08 Aug 2025AY 2013-14

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 132Section 132(4)Section 143(3)

legal requirement under section 68 is threefold: the assessee must establish the identity of the creditor, the genuineness of the transaction, and the creditworthiness of the creditor. On all three counts, the assessee has discharged the initial burden. In the absence of any rebuttal by the Revenue, sustainable

Shiv Shankar Sharma, Mumbai vs. Assistant Commissioner of Income Tax, Central Circle 4(3), Mumbai

In the result, all the appeals filed by the revenue are dismissed and the assessee’s appeals are partly allowed

ITA 2162/MUM/2025[2019-20]Status: DisposedITAT Mumbai08 Aug 2025AY 2019-20

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 132Section 132(4)Section 143(3)

legal requirement under section 68 is threefold: the assessee must establish the identity of the creditor, the genuineness of the transaction, and the creditworthiness of the creditor. On all three counts, the assessee has discharged the initial burden. In the absence of any rebuttal by the Revenue, sustainable

Shiv Shankar Sharma, Mumbai vs. Assistant Commissioner of Income Tax, Central Circle 4(3), Mumbai

In the result, all the appeals filed by the revenue are dismissed and the assessee’s appeals are partly allowed

ITA 2161/MUM/2025[2018-19]Status: DisposedITAT Mumbai08 Aug 2025AY 2018-19

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 132Section 132(4)Section 143(3)

legal requirement under section 68 is threefold: the assessee must establish the identity of the creditor, the genuineness of the transaction, and the creditworthiness of the creditor. On all three counts, the assessee has discharged the initial burden. In the absence of any rebuttal by the Revenue, sustainable

DCIT, Central Circle - 8 (1), Mumbai vs. Shiv Shankar Sharma, Mumbai

In the result, all the appeals filed by the revenue are dismissed and the assessee’s appeals are partly allowed

ITA 1690/MUM/2025[2021-22]Status: DisposedITAT Mumbai08 Aug 2025AY 2021-22

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 132Section 132(4)Section 143(3)

legal requirement under section 68 is threefold: the assessee must establish the identity of the creditor, the genuineness of the transaction, and the creditworthiness of the creditor. On all three counts, the assessee has discharged the initial burden. In the absence of any rebuttal by the Revenue, sustainable

DCIT, Central Circle-8(1), Mumbai vs. Shiv Shankar Sharma, Mumbai

In the result, all the appeals filed by the revenue are dismissed and the assessee’s appeals are partly allowed

ITA 1689/MUM/2025[2020-21]Status: DisposedITAT Mumbai08 Aug 2025AY 2020-21

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 132Section 132(4)Section 143(3)

legal requirement under section 68 is threefold: the assessee must establish the identity of the creditor, the genuineness of the transaction, and the creditworthiness of the creditor. On all three counts, the assessee has discharged the initial burden. In the absence of any rebuttal by the Revenue, sustainable

Raghav Kumar Dhoot, Jaipur vs. DCIT Central Circle 1, Jaipur

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

ITA 491/JPR/2025[2018-19]Status: DisposedITAT Jaipur06 Aug 2025AY 2018-19
For Appellant: Shri C.M. Agarwal, C.AFor Respondent: Shri Rajesh Ojha, CIT- DR
Section 143(2)Section 143(3)Section 153ASection 292BSection 68

asked to submit the complete details of creditors, i.e. name, address, PAN, return of income and bank statements to establish the identity and creditworthiness of the creditors and genuineness of transaction. It was also show-cause as to if these details are not submitted by the assessee, then ... primary onus to explain the credits is on the assessee by way of furnishing complete details of creditors to establish the identity and creditworthiness of the creditors and genuiuneness of transactions. Now with regard to the peak-working made by the assessee and the copy of cash book enclosed with

Ravindar Reddy Miryala, Hyderabad vs. DCIT., Central Circle-1(3), Hyderabad

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

ITA 567/HYD/2025[2019-20]Status: DisposedITAT Hyderabad06 Aug 2025AY 2019-20

Bench: Shri Vijay Pal Rao & Shri Manjunatha G.आ.अपी.सं /Ita No.567/Hyd/2025 (निर्धारण वर्ा/Assessment Year: 2019-20) Ravindar Reddy Miryala Vs. Deputy Commissioner Hyderabad Of Income Tax Pan : Ahypm2324C Central Circle-1(3) Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: None रधजस् व द्वधरध/Revenue By: Shri Gurpreet Singh, Dr सुिवधई की तधरीख/Date Of Hearing: 30/07/2025 घोर्णध की तधरीख/ 06/08/2025 Date Of Pronouncement: आदेश / Order

For Appellant: NoneFor Respondent: Shri Gurpreet Singh, DR
Section 144Section 250(6)Section 68

Income Tax Act, 1961 (“the Act”), when the assessee has failed to discharge his onus of proving the identity and creditworthiness of the creditors as well as the genuineness of the transactions. Thus, it is manifest from the assessment order that there was no compliance on behalf of the assessee