“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

Govindam Brj Infra Projects Private Limited, Jaipur vs. ACIT/DCIT Cir-6, Jpr, Jaipur

The appeals of the assessee are allowed

ITA 1114/JPR/2025[2017-18]Status: DisposedITAT Jaipur15 Oct 2025AY 2017-18

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

For Appellant: Shri Deepak Somani, C.AFor Respondent: Shri Gaurav Awasthi, JCIT

Section 143(3)Section 145(3)Section 234ASection 234BSection 250Section 270A(1)Section 271Section 44A

satisfied with the details furnished by the assessee, then in order to verify the genuineness of the transaction, identity and creditworthiness of the creditors, the AO should have issued summons under section 131 or notices under section 133(6) of the IT Act, 1961 to these creditors. Law is clear ... justified. 10. Accordingly, in view of above discussions, we find that the primary onus on the assessee to prove the identity and creditworthiness of the creditors as well as the genuineness of the transactions stood proved. Accordingly, the addition made by the AO under section

Income Tax Officer, Delhi vs. Mohd Rizwan, Delhi

ITA 3535/DEL/2025[2021-22]Status: DisposedITAT Delhi15 Oct 2025AY 2021-22

Bench: Shri S. Rifaur Rahman & Shri Yogesh Kumar U.S.Income Tax Officer, Delhi. (Appellant)

For Appellant: NoneFor Respondent: Shri Abhijeet Kumar, Sr. DR

Section 144Section 80C

identity of the creditors had not been established, consequently the question of establishment of the genuineness of the transactions or the creditworthiness of the creditors did not and could not arise. The Tribunal did not apply its mind to the facts of this particular case and proceeded on the footing

Paksh Developers Private Limited, Ahmedabad vs. The ACIT, Circle-3(1)(2), Ahmedabad

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

ITA 1472/AHD/2025[2016-17]Status: DisposedITAT Ahmedabad14 Oct 2025AY 2016-17

Bench: Dr. B.R.R. Kumar, Vice-Ms. Suchitra Kamble

For Appellant: Shri SN Divetia, with Shri Samir Vora, ARFor Respondent: Shri Sudhakar Verma, Sr. DR

evidence before the Revenue authorities in support of her claim. We also find that the assessee failed to establish the identity, genuineness, and creditworthiness of the creditors in respect of the unsecured loans even before the Assessing Officer. In view of the above and in the interest of natural justice

Fast-N-Perfect Commercial Pvt Ltd, Kolkata vs. I.T.O. Ward-5(4), Kolkata

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

ITA 1215/KOL/2025[2012-13]Status: DisposedITAT Kolkata14 Oct 2025AY 2012-13

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) & Shri Rajesh Kumari.T.A. No. 1215/Kol/2025 Assessment Year: 2012-2013 Fast-N-Perfect Commercial Pvt. Limited,….…Appellant 23A, N.S. Road, 3Rd Floor, Room No. 10, Kolkata-700001, West Bengal [Pan:Aaacf3691B] -Vs.- Income Tax Officer,………………………...…….Respondent Ward-5(4), Kolkata, Aayakar Bhawan, 6Th Floor, Room No. 27, P-7, Chowringhee Square, Kolkata-700069 Appearances By: Shri Vijay Kumar Singhal, Ca, Appeared On Behalf Of The Assessee Shri Raja Sengupta, Cit, D.R., Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: August 06, 2025 Date Of Pronouncing The Order: October 14, 2025 O R D E R

Section 131Section 142(1)Section 143(1)Section 143(2)Section 14ASection 68

assessee failed to put forward any explanation till the date of passing of order and also to prove the identity and creditworthiness of the creditors and genuineness of the transactions. Finally, ld. Assessing Officer disallowed the share application money of Rs.307,77,40,000/- including share premium of Rs.96

M/S Ankur Developers & Realtors, Mumbai vs. DCIT CC-3(4), Mumbai

In the result, the appeal of the assessee is rejected

ITA 428/MUM/2020[2014-15]Status: DisposedITAT Mumbai14 Oct 2025AY 2014-15

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan () Assessment Year: 2014-15

For Appellant: NoneFor Respondent: Mr. Surendra Mohan, Sr. DR

Section 131Section 132Section 68

Officer concluded that the assessee had failed to discharge the onus cast under section 68 of the Act to establish the identity and creditworthiness of the creditors and genuineness of the loan transactions. Consequently, the entire sum of Rs. 3,50,00,000/- was treated as unexplained cash credit under ... establish, by credible and cogent evidence, the identity M/s Ankur Developers & Realtors 21 of the creditor, the genuineness of the transaction, and the creditworthiness of the creditor. Only when such primary burden is discharged, the onus shifts upon the Revenue. It is in this backdrop that the facts

M/S. Stupendors Traders Pvt. Ltd., Kolkata vs. DCIT, Cir-5(1)., Kolkata

Appeal is partly allowed for statistical purposes, having been remanded back to the file of Ld

ITA 326/KOL/2023[2012-13]Status: DisposedITAT Kolkata13 Oct 2025AY 2012-13

Bench: The Ld. Cit(A) Also The Assessee Could Not Succeed & The 2 M/S Stupendors Traders Pvt. Ltd. Following Findings Of Ld. Cit(A) Would Summarize His Stand:

Section 131Section 250Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA SHRI SONJOY SARMA, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A

DCIT, Circle - 19(1), New Delhi vs. Prime Comfort Products Pvt. Ltd., Delhi

Appeal is dismissed

ITA 3582/DEL/2024[2017-18]Status: DisposedITAT Delhi13 Oct 2025AY 2017-18

Bench: Sh. Satbeer Singh Godara & Sh. Manish Agarwal

For Appellant: Sh. Raj Kumar, CA &For Respondent: Sh. Rajesh Kumar Dhanesta, Sr. DR

Section 143(3)Section 14ASection 68

allowing the appeal of the assessee on the fact that the assessee could not 2 Prime Comfort Products Pvt. Ltd. establish the creditworthiness of the creditors and genuineness of transaction in respect of credit of Rs.1,89,00,000/- on account of loan/advances received back by the assessee

DCIT, Central Circle - 4(4), Kolkata vs. M/S. Evernewcommodeal Pvt. Ltd., Kolkata

In the result, ITA No.1535/Kol/2025 of the revenue is dismissed

ITA 1536/KOL/2025[2019-20]Status: DisposedITAT Kolkata10 Oct 2025AY 2019-20

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubeyita Nos.1535 & 1536/Kol/2025 Assessment Years: 2018-19 & 2019-20 Dcit, Central Circle-4(4), Kolkata.…………………………….…….……Appellant Vs. M/S Evernewcommodeal Pvt. Ltd..……………….………...……...…..…..Respondent 11, Pollock Street, Kol- 1. [Pan: Aabce9293P] Appearances By: Shri Altaf Hossain, Addl. Cit-Dr, Appeared On Behalf Of The Appellant. Shri Manish Tiwari, Fca, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : September 17, 2025 Date Of Pronouncing The Order : October 10, 2025 Order Per Pradip Kumar Choubey: Both The Captioned Appeals Have Been Preferred By The Assessee For The Assessment Years 2018-19 & 2019-20 Against Separate Orders Both Dated 25.04.2025 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. Ita No.1535/Kol/2025 Is Taken As Lead Case For Narration Of Facts. Ita No.1535/Kol/2025 - Brief Facts Of The Case Are That U/S 2. 139(1) Of The Act On 10-10-2019 Declaring A Total Income At Rs. 10,02,960/-. The Same Was Processed U/S 143(1) Of The Act. Later, A Search & Seizure Operation U/S 132 Of The Act Was Conducted At "Ladhuram Toshniwal Group" On 08-03-2022 As A Part Of "Jain Group" Of Concerns/ Persons At Various Places & Simultaneously, Business

Section 127Section 132Section 133ASection 142(1)Section 143(1)Section 143(2)Section 147Section 148Section 2Section 250

purpose of section 68 of the Act. The burden of the assessee to prove the genuineness of the transactions as well as the creditworthiness of the creditor must remain confined to the transactions, which have taken place between the assessee and the creditor. In the present case, the assessee

DCIT, Central Circle - 4(4), Kolkata vs. M/S. Evernewcommodeal Pvt. Ltd., Kolkata

In the result, ITA No.1535/Kol/2025 of the revenue is dismissed

ITA 1535/KOL/2025[2018-19]Status: DisposedITAT Kolkata10 Oct 2025AY 2018-19

Section 127Section 132Section 133ASection 142(1)Section 143(1)Section 143(2)Section 147Section 148Section 2Section 250

Hanumanthappa Pathrera Laxmana, Shivamogga vs. Income Tax Officer, Ward-(1) & Tps, Shimogga

In the result, the assessee’s appeal is partly allowed whereas the Revenue’s appeal is dismissed

ITA 247/BANG/2025[2020-21]Status: DisposedITAT Bangalore09 Oct 2025AY 2020-21

Bench: Shri Narender Kumar Chodhry & Shri Waseem Ahmedassessment Year: 2020-21

For Appellant: Shri Atul K Alur, AdvocateFor Respondent: Shri Shivanand H Kalakeri, JCIT (DR)

Section 145(3)Section 69C

respect of unsecured loans aggregating to ₹1,35,39,150 on the ground that the assessee had not established the creditworthiness of the creditors. The ld. CIT(A) upheld this view, observing that the assessee had filed only confirmations and ledger extracts which were insufficient. 14.1 It is, however, important ... discharge a primary burden by placing on record evidence to establish the identity of the creditor, the genuineness of the transaction, and the creditworthiness of the creditor. Once such primary evidence is produced, the onus shifts upon the . ITA No.247 & 1066/Bang/2025 Page 7 of 8 Revenue to verify the veracity

Income Tax Officer, Ward-1 & Tps, Shivamogga vs. Hanumanthappa Pathrera Laxmana, Shivamogga

In the result, the assessee’s appeal is partly allowed whereas the Revenue’s appeal is dismissed

ITA 1066/BANG/2025[2020-21]Status: DisposedITAT Bangalore09 Oct 2025AY 2020-21

Bench: Shri Narender Kumar Chodhry & Shri Waseem Ahmedassessment Year: 2020-21

For Appellant: Shri Atul K Alur, AdvocateFor Respondent: Shri Shivanand H Kalakeri, JCIT (DR)

Section 145(3)Section 69C

Pradeep Jain, Jaipur vs. DCIT-Central Circle-2, Jaipur

25. As a result, this appeal deserves to be allowed

ITA 937/JPR/2025[2017-18]Status: DisposedITAT Jaipur08 Oct 2025AY 2017-18

Bench: Learned Cit(A), While Challenging The Assessment Order Dated 27.12.2019, Passed By The Assessing Officer, As Regards Assessment Year 2017-18. That Appeal Came To Be Dismissed.

For Appellant: Shri Avinash Khandelwal, C.AFor Respondent: Smt. Alka Gautam, CIT

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

failed to proof satisfactorily, sources and nature of the credit entries and also not discharged the onus to prove the identity, genuineness and creditworthiness of the creditors. Consequently, Learned CIT(A) sustained the first mentioned addition, and the other addition of interest income on the cash loans and advances

Assistant Commissioner of Income-Tax, Madurai vs. Ramasubbu Minnalkodi, Tirunelveli

The appeal of the Revenue is dismissed

ITA 1632/CHNY/2025[2020-21]Status: DisposedITAT Chennai07 Oct 2025AY 2020-21

Bench: Shri S.S. Viswanethra Ravi & Shri S. R. Raghunatha

For Appellant: Ms. Gouthami Manivasagam, J.C.I.TFor Respondent: Shri. R. Venkata Raman, C.A

Section 133ASection 139(1)Section 142(1)Section 143(2)Section 143(3)

attracted even in relation to the opening balances, where the assessee 713-2 ITA. No: 1632/Chny/2025 has failed to establish the creditworthiness of the creditors in the assessment year in which such balances are first reflected or claimed. The Id.DR further submitted that the reasoning adopted by the Id.CIT

The ACIT Gandhidham Circle, Gandhidham vs. Softel Machines Limited, Gandhidham ( Kutch)

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

ITA 175/RJT/2023[2016-17]Status: DisposedITAT Rajkot30 Sept 2025AY 2016-17

Bench: DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER & DINESH MOHAN SINHA (Judicial Member)

For Appellant: Shri Vimal Desai, Ld. ARFor Respondent: Shri Sanjay Pungalia, Ld. CIT-DR

Section 143(3)Section 250Section 43BSection 68

assessee has neither produced the creditors/persons nor furnished authentic evidence to prove the genuineness of the transaction and identity as well as creditworthiness of the creditors. Thus, assessee has failed to prove the source of share capital received during the year. In order to establish the fact of the receipt

Chirag Nitin Shah, Bhavnagar vs. The ACIT, Circle-1, Bhavnagar

In the result, the appeal of the assessee is allowed

ITA 1398/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad30 Sept 2025AY 2018-19

Bench: DR. BRR Kumar (Vice President), Shri Siddhartha Nautiyal (Judicial Member)

Section 115BSection 143(3)Section 271ASection 68Section 69

cumulatively establish the three essential requirements of section 68 of the Act, namely the identity of the creditor, genuineness of the transaction, and creditworthiness of the creditor. The Counsel submitted that the use of the same bank for the assessee, J. Himatlal & Co. and Chirag Shah HUF explains

Umbrella Hospitality Private Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle 6(2), Mumbai

In the result, the ground no

ITA 1640/MUM/2025[2016-17]Status: DisposedITAT Mumbai30 Sept 2025AY 2016-17

Bench: Shri Vikram Singh Yadav, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri Ajay R. Singh, Adv. & ShriFor Respondent: Shri Vivek Perampurna, (CIT-DR)

Section 132(1)Section 143(1)Section 143(2)Section 143(3)Section 148Section 250Section 68Section 69C

that the assessee has merely provided the relevant extract of bank statement reflecting the transaction than giving complete bank statement to show the creditworthiness of the creditors. Further, the nature of source of funds of these companies are the share premium received from the shareholders who were not traceable