“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

Sundip Kumar Gupta., Kolkata vs. DCIT, Cir-47, Kolkata.

Appeals of the assessee stand allowed

ITA 1171/KOL/2023[2012-13]Status: DisposedITAT Kolkata02 Jul 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Rakesh Mishrai.T.A. Nos.1170 To1173/Kol/2023 Assessment Years: 2010-11, 2012-13, 2014-15 & 2015-16 Sundip Kumar Gupta..…………………....................…...……………....Appellant Fort Oasis Complex, Flat No.040903, Block-436B, Panditya Road, Kolkata – 700029. [Pan: Aebpg7187B] Vs. Dcit, Circle-47, Kolkata…….……………............................…..…..... Respondent Appearances By: Shri Abhishek Bansal, Ar, Appeared On Behalf Of The Assessee. Shri B. K. Singh, Jcit-Sr. Dr, Appeared On Behalf Of The Revenue. Date Of Concluding The Hearing : April 23, 2024 Date Of Pronouncing The Order : July 02, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Captioned Are Bunch Of Four Appeals Preferred By The Assessee Against The Separate Orders Dated 06.09.2023, 06.09.2023, 15.09.2023 & 06.09.2023, Respectively, 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’). Since The Facts & Issues Involved In All The Appeals Are Identical, Hence, These Appeals Have Been Heard Together & Are Being Disposed Of By This Common Order. At The Request Of Ld. Representatives Of The Parties, Ita No.1170/Kol/2023 Is Taken As The Lead Case For The Purpose Of Narration Of Facts.

Section 147Section 250Section 68

satisfaction. The ld. counsel has submitted that even on merits, the assessee had furnished all the relevant documents to prove the identity and creditworthiness of the creditors and genuineness of the transaction. He referring to the assessment order has submitted that the Assessing Officer has not discussed about a single ... document furnished by the assessee to prove the identity and creditworthiness of the creditors and genuineness of the transaction. He has submitted that the Assessing Officer has made the addition in a mechanical manner by simply relying upon the report of the Investigation Wing without any discussion on merits

Sundip Kumar Gupta., Kolkata vs. DCIT, Cir-47, Kolkata.

Appeals of the assessee stand allowed

ITA 1170/KOL/2023[2010-11]Status: DisposedITAT Kolkata02 Jul 2024AY 2010-11

Section 147Section 250Section 68

Sachdev Steel Works Pvt. Ltd., Kolkata vs. ITO, Cir-1(1), Kolkata.

In the result, the appeal of the assessee stands allowed

ITA 1316/KOL/2023[2012-13]Status: DisposedITAT Kolkata28 Jun 2024AY 2012-13

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.1316/Kol/2023 Assessment Year: 2012-13 Sachdev Steel Pvt. Ltd….….…….…......................…...……………....Appellant Room No.18B, First Floor, Karnani Estate, 209, Acharya Jagdish Chandra Bose Road, West Bengal-700017. [Pan: Aadcs7342D] Vs. Ito, Circle-1(1), Kolkata….....…..........................................…..…..... Respondent Appearances By: Shri Miraj D. Shah, Ar, Appeared On Behalf Of The Appellant. Shri P. P. Barman, Addl. Cit-Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : April 10, 2024 Date Of Pronouncing The Order : June 28, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 20.01.2023 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’). 2. The Assessee In This Appeal Has Agitated Against The Confirmation Of Addition Of Rs.2,48,00,000/- Made By The Assessing Officer Treating The Share Application Money Received By The Assessee As Unexplained Income Of The Assessee Invoking Provisions Of Section 68 Of The Act. 3. At The Outset, The Ld. Counsel For The Assessee Has Invited Our Attention To The Impugned Assessment Order To Submit That The Assessing Officer During The Assessment Proceedings Noted That The I.T.A. No.1316/Kol/2023 Assessment Year: 2012-13 Sachdev Steel Pvt. Ltd Assessee Had Received Share Application/Share Allotment Money From The Following Three Parties: Name Of The Applicants Amount Received Bharat Bhushan Sachdev Huf 3000000/- Shangrila Builders Pvt. Ltd. 4500000/- Spoxy Vincom Pvt. Ltd. 17300000/- Total 24800000/-

Section 250Section 68

Vincom Pvt. Ltd. 17300000/- Total 24800000/- 3.1 The ld. Counsel has further submitted that on being asked to explain about the identity and creditworthiness of the creditors and genuineness of the transaction, the assessee furnished the necessary documents and explained that no fresh share application money was received from

ITO Ward-20(1), New Delhi vs. Poltavsky- Tps Power Services Ltd., New Delhi

In the result, appeal of the Revenue is dismissed

ITA 4884/DEL/2019[2010-11]Status: DisposedITAT Delhi28 Jun 2024AY 2010-11

Bench: SHRI VIKAS AWASTHY (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)

For Appellant: Shri Vivek Vardhan, Sr.DRFor Respondent: Ms. Sangeeta Singh, CA

Section 142(1)Section 143(2)Section 144Section 37Section 68

contention of Department is that the assessee was not able to prove creditworthiness of the creditors and 2 genuineness of the transaction, despite that the First Appellate Authority deleted the addition. 3. The facts of the case as emanating from records are; the assessee company was established in technical collaboration

ACIT, Central Circle, Ghaziabad vs. Anand Educational Society, Ghaziabad

In the result, for statistical purposes the appeal is partly allowed

ITA 140/DEL/2024[2018-19]Status: DisposedITAT Delhi27 Jun 2024AY 2018-19

Bench: Sh. Pradip Kumar Kedia & Sh. Sudhir Kumarassessment Year: 2018-19 Acit Vs. Anand Educational Society Central Circle R-2/83, Sector-2, Raj Ghaziabad Nagar, Ghaziabad – 201002 Pan No.Aabta0477G (Appellant) (Respondent)

Section 12ASection 132Section 142(1)Section 143(3)Section 153ASection 68

assessment proceedings, the assessee was asked to furnish the list of sundry creditors, their PAN, addresses and their confirmations to prove identity and creditworthiness of the creditors and the genuineness of the transactions with them. Ld. AO observes that the assessee has furnished its balance sheet and its annexures including

Shri. Gopal Lokesh, Bangalore vs. Income-Tax Officer, Ward-1(2)(1), Bangalore

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

ITA 752/BANG/2023[2015-16]Status: DisposedITAT Bangalore26 Jun 2024AY 2015-16

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2015-16

For Appellant: Shri Sandeep Chalapathy, CAFor Respondent: Shri Subramanian S., Jt.CIT(DR)(ITAT), Bengaluru

Section 250Section 68

facts in confirming the addition of Rs. 1,05,60,969 towards unsecured loans even though the appellant has proved the identity and creditworthiness of the creditor and genuineness of the transactions. 7. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in not considering

Bright Commodeal Pvt. Ltd., Kolkata vs. ITO, Ward-2, Kolkata

In the result, the appeal of the assessee is allowed

ITA 96/KOL/2024[2012-13]Status: DisposedITAT Kolkata24 Jun 2024AY 2012-13

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma]

Section 131Section 133(6)Section 142(1)Section 143(2)Section 68

returned un- served or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. The relevant portion of the decision is extracted below: “We find considerable force of the submissions of the learned Counsel for the appellant

Veenita Enterprise Pvt. Ltd., Ahmedabad vs. The Dy.Commissioner of Income Tax, Central Circle-1(1), Ahmedabad

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

ITA 1199/AHD/2016[2009-10]Status: DisposedITAT Ahmedabad14 Jun 2024AY 2009-10

Bench: Smt. Annapurna Gupta (Accountant Member), Shri Siddhartha Nautiyal (Judicial Member)

Section 132(4)Section 143(3)Section 147Section 148Section 68

Pune) (TM) held that it is part of the duty of the assessee to furnish evidence regarding the creditworthiness of the creditors. 30. The Delhi ITAT in the case of Anandtex international (P.) Ltd. v. ACIT [2022] 137 taxmann.com 146 (Delhi - Trib.) held that where assessee received share application money

Genus Paper & Boards Ltd, Moradabad vs. DCIT Central Circle, Moradabad

In the result, the appeal of the assessee is dismissed

ITA 191/DEL/2020[2013-14]Status: DisposedITAT Delhi12 Jun 2024AY 2013-14

Bench: Shri Kul Bharat & Shri Brajesh Kumar Singh[Assessment Year: 2013-14]

Section 68

Income Tax Act, by alleging that the assessee has not discharged the onus cast upon him to establish the identity and creditworthiness of the creditors and genuineness of the transaction. 4. The additional ground(s), if considered necessary, shall be taken at the time of hearing of appeal

The DCIT, Central Circle-1(2), Ahmedabad vs. M/S. Volga International Ltd., Sarangpur

In the result appeal of the revenue is hereby dismissed

ITA 1538/AHD/2017[2010-11]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2010-11

Bench: Shri Waseem Ahmed & Ms Madhumita Roy

For Appellant: Shri Deepak R Shah, ARFor Respondent: Shri Atul Pandey, Sr.DR

Section 68

required to explain the nature and source of such credit to the satisfaction of the AO. As such the assessee to establish identity & creditworthiness of the creditor and genuineness of transaction furnished necessary documents such PAN, copy of ITR, copy confirmation, bank statement and financial statement etc. However, all this

Ganga Cotton & Allied Industries Ltd., New Delhi vs. ITO Ward - 11(3), New Delhi

In the result, the appeal of the assessee is allowed

ITA 1187/DEL/2019[2014-15]Status: DisposedITAT Delhi06 Jun 2024AY 2014-15

Bench: Shri M Balaganesh & Shri Vimal Kumarasstt. Year: 2014-15 M/S. Ganga Cotton & Allied Vs. Ito Ward-11(3) Industries Ltd., New Delhi 7/2, West Patel Nagar, New Delhi – 110 008 Pan Aaacg3976E (Appellant) (Respondent)

For Appellant: Shri Pulkit Saini, AdvocateFor Respondent: Shri Sandeep Kr. Mishra, Sr. DR

Section 143(3)Section 144Section 68

that though apart from establishing the identity of the creditor, the Assessee must establish the genuineness of the transaction as well as the creditworthiness of his creditor, the burden of the Assessee to prove the genuineness of the transactions as well as the creditworthiness of the creditor must remain confined

Bestline Properties Pvt. Ltd, Mumbai vs. ITO-12(1)(3), Mumbai

In the result, the appeal filed by the assessee is

ITA 3500/MUM/2023[2009-10]Status: DisposedITAT Mumbai31 May 2024AY 2009-10

Bench: Shri Pavan Kumar Gadale & Ms Padmavathy S

Section 148Section 68

appellate authority held that where all material evidence in support of explanation of credits in terms of identity, genuineness of the transaction and creditworthiness of the creditors were available, without any infirmity in such evidence and the explanation required under Section 68 of the Act having been discharged, Assessing Officer

Anil Dhakad, Indore vs. Aasst. Commissioner of Income Tax, Central-I, Indore

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

ITA 454/IND/2023[2021-22]Status: DisposedITAT Indore29 May 2024AY 2021-22

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 115BSection 132Section 132(4)Section 69A

case of introduction of cash credit in the books of accounts and assessee failed to discharge the onus of proving identity, creditworthiness of the creditors and genuineness of the transactions. Once the transactions are recorded in the seized material giving all the details regarding nature and source of the transactions

Anil Dhakad, Indore vs. Asstt. Commissioner of Income Tax, Central-I, Indore

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

ITA 453/IND/2023[2020-21]Status: DisposedITAT Indore29 May 2024AY 2020-21

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 115BSection 132Section 132(4)Section 69A

Anil Dhakad, Indore vs. Asstt. Commissioner of Income Tax, Central-I, Location

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

ITA 452/IND/2023[2019-20]Status: DisposedITAT Indore29 May 2024AY 2019-20

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 115BSection 132Section 132(4)Section 69A

Anil Dhakad, Indore vs. Asstt. Commissioner of Income Tax, Central-I, Indore

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

ITA 451/IND/2023[2018-19]Status: DisposedITAT Indore29 May 2024AY 2018-19

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 115BSection 132Section 132(4)Section 69A

Sunita Tyagi, Ghaziabad vs. ITO Ward 2(2)(3), Ghaziabad

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

ITA 3775/DEL/2023[2012-13]Status: DisposedITAT Delhi28 May 2024AY 2012-13

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia[Assessment Year : 2012-13] Sunita Tyagi, Vs Ito, R-7/120, Raj Nagar, Ward-2(2)(3), Ghaziabad, Ghaziabad. Uttar Pradesh-201002. Pan-Aaupt3785H Appellant Respondent Appellant By Shri Sahil Sharma, Adv & Shri Sanjay Parashar, Adv. Respondent By Shri Gurpreet Singh, Sr. Dr Date Of Hearing 16.05.2024 Date Of Pronouncement 28.05.2024 Order Per Kul Bharat, Jm The Present Appeal Filed By The Assessee Is Directed Against The Order Passed By Ld. Cit(A), National Faceless Appeal Centre (“Nfac”), Delhi Dated 30.11.2023 For The Assessment Year 2012-13. The Assessee Has Raised Following Grounds Of Appeal:-

Section 133(6)Section 144Section 148Section 151

application seeking admission of additional evidences was filed vide application dated 12.04.2021. The assessee had also filed various documents, disclosing the creditworthiness of the creditor who had advanced loan to the assessee. Under these facts, we are of the considered view that the Ld.CIT(A) ought to have been adverted

Dy. Commissioner of Income Tax Central Circle-4(4), Mumbai vs. Iris Computers Limited, Delhi

In the result, appeal filed by the revenue is accordingly dismissed

ITA 3918/MUM/2023[2017-18]Status: DisposedITAT Mumbai27 May 2024AY 2017-18

Bench: Shri. Prashant Maharshi & Shri. Raj Kumar Chauhandy. Commissioner Of Income Tax Vs. Iris Computers Limited, Central Circle-4(4), Mumbai Delhi. Room No. 1918, Air India Building, A-155, Road No. 4, New Nariman Point – 400 021. Delhi, Mahipalpur – 110037. Pan: Aaaci9670H (Appellant) (Respondent)

Section 139(1)Section 142(1)Section 143(2)Section 250

behalf of the assessee. The Ld. DR vehemently argued that the material brought on record by the assessee to show the creditworthiness of the creditor and genuineness of the transaction are not the correct and relevant documents, therefore the impugned order of the Ld. CIT(A) is liable ... record by the appellant to Dy. Commissioner of Income Tax Central Circle-4(4); A.Y: 2017-18 dispute the genuineness of transaction and creditworthiness of the creditors with respect to the unsecured loan of Rs. 15 Crores by Shri Sanjiv Krishen. We find no reason to doubt the correctness

Gem Forgings Pvt. Ltd., Kolkata vs. DCIT, Cir. 8(1), Kolkata

In the result, the appeals in ITA No

ITA 1426/KOL/2023[2014-15]Status: DisposedITAT Kolkata22 May 2024AY 2014-15

Bench: Shri Rajesh Kumar, Am& Shri Sonjoy Sarma, Jm]

Section 131Section 133(6)Section 143(3)Section 147Section 148Section 148(2)Section 250Section 68

Gem Forgings Pvt. Ltd., Kolkata vs. DCIT, Cir. 8(1), Kolkata

In the result, the appeals in ITA No

ITA 1425/KOL/2023[2013-14]Status: DisposedITAT Kolkata22 May 2024AY 2013-14

Bench: Shri Rajesh Kumar, Am& Shri Sonjoy Sarma, Jm]

Section 131Section 133(6)Section 143(3)Section 147Section 148Section 148(2)Section 250Section 68