“genuineness of the transaction”

Cash Credits & Unexplained ItemsSection 68Section 685,938 judgments

The decision most relied on for genuineness of the transaction is Sumati Dayal v. CIT (214 ITR 801), cited in 1,967 judgments on BharatTax.

Leading authorities on genuineness of the transaction

Sumati Dayal v. CIT

214 ITR 801 · 1995 · Supreme Court

1,967

citing judgments

The Revenue is entitled to look behind the apparent form of a transaction to discover its true nature, applying the test of human probabilities and surrounding circumstances. If transactions defy logic or are unnatural, they can be treated as bogus, even if supported by some documentation, especially in cases of cash credits or unexplained investments.

CIT v. Durga Prasad More

82 ITR 540 · 1971 · Supreme Court

1,579

citing judgments

Tax authorities must judge evidence using the test of human probabilities and consider the apparent as real until there are reasons to believe it is not. They can rely on circumstantial evidence and the preponderance of probabilities to determine the genuineness of transactions.

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.

McDowell & Co. Ltd. v. CTO

154 ITR 148 · 1985 · Supreme Court

741

citing judgments

The Supreme Court held that while legitimate tax planning is permissible, transactions structured as a "colourable device" or "subterfuge" solely to avoid tax are impermissible. It mandates a judicial shift to look beyond the form to the substance of a transaction, allowing the lifting of the corporate veil in tax evasion arrangements.

(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.

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.

Umacharan Shaw & Bros. v. CIT

37 ITR 271 · 1959 · Supreme Court

567

citing judgments

An income tax assessment or addition cannot be sustained solely on the basis of suspicion, surmises, or conjectures, as strong suspicion does not amount to proof. The revenue authorities must rely on concrete evidence and material to frame an assessment.

Judgments citing genuineness of the transaction

Goutam Chand Sandeep Pagariya, Chennai vs. ITO, Ncw-8(1), Chennai

In the result, the appeal of the assessee is allowed

ITA 2927/CHNY/2025[2018-19]Status: DisposedITAT Chennai10 Feb 2026AY 2018-19

Bench: Shri Aby T. Varkey & Ms. Padmavathy.Sआयकर अपील सं./Ita No.2927/Chny/2025 िनधा$रण वष$ /Assessment Year: 2018-19

For Appellant: Mr.K.P. Gangi Reddi, C.A ()For Respondent: Ms. R. Anitha, Addl. CIT

Section 133(6)Section 194CSection 250Section 40Section 68Section 69C

assessee but has proceeded to make the addition on the ground that the assessee failed to prove the identity creditworthiness and genuineness of the transactions. We also notice that the assessee has submitted the relevant details with regard to the loan creditors and there is actually a decrease

DCIT Circle 2(3)(1), Mumbai vs. Tata Steel Limited, Mumbai

The appeal of the Revenue is dismissed

ITA 6471/MUM/2025[2010-11]Status: DisposedITAT Mumbai10 Feb 2026AY 2010-11

Bench: Shri Anikesh Banerjee & Shri Makarand Vasant Mahadeokardcit Circle-2(3)(1) Tata Steel Limited 552, 5Th Floor, Aayakar Bombay House, 24, Bhavan, M. K. Road, Vs. Homi Mody Street, Mumbai-400 020 Fort, Mumbai, Gpo, Mumbai-400 001 Pan/Gir No. Aaacb1247M (Applicant) (Respondent) Revenue By Shri Ritesh Misra, Ld. Dr Assessee By Ms. Jasmin Amalasadvala, Ld. Ar Date Of Hearing 27.01.2026 Date Of Pronouncement 10.02.2026

Section 115JSection 131Section 133(6)Section 147Section 148Section 153ASection 250Section 268ASection 68

inputs from the Investigation Wing, undertook detailed inquiries including summons under section 131 and inquiry under section 133(6), which established the non-genuineness of the transactions, cancelation of VAT registration, and lack of real business activity by M/s PK Enterprises? 3. Whether on the facts and in the circumstances

Mc Coy Drugs Private Limited, Mumbai vs. The Income Tax Officer, Ward 10(2)(3), Mumbai

Appeal are allowed for statistical purposes

ITA 6449/MUM/2025[2013-14]Status: DisposedITAT Mumbai10 Feb 2026AY 2013-14

Bench: Shri Amit Shukla, Jm & Shri Arun Khodpia, Am

For Appellant: Shri K. Shivaram, Sr. Advocate &For Respondent: Assessee by

Section 139(1)Section 143(3)Section 68

verified by the Assessing Officer in the remand report; (iv) The amount was credited to the assessee's bank account, thereby establishing genuineness of the transaction; 2. The failure to furnish ITR of the lender, which was beyond the control of the assessee, ought not to have been made

Ekesh Gaurang Desai, Mumbai vs. Central Circle - 1(1), Mumbai

In the result, the appeal of the assessee bearing ITA No

ITA 6116/MUM/2025[2011-12]Status: DisposedITAT Mumbai10 Feb 2026AY 2011-12

Bench: Shri Anikesh Banerjee & Shri Makarand Vasant Mahadeokarekesh Gaurang Desai Vs Acit Central Circle -1(1), Mumbai C-46, Pandurang Chs, A.B. 321, Aayakar Bhavan, M.K. Road, Nair Road Near Juhu Post Mumbai 400020 Office, Juhu Mumbai-400049 Pan:Aibpd4569L Appellant Respondent Assessee By : Shri Dharangandhi, Adv & Ms. Vinita Nara Adv Respondent By : Shri Ritesh Misra (Cit Dr) Date Of Hearing : 29/01/2026 Date Of Pronouncement : 10/02/2026 O R D E R Per: Anikesh Banerjee (Jm): The Instant Appeal Of The Assessee Filed Against The Order Of The Ld. Commissioner Of Income Tax (Appeal)-47, Mumbai [For Brevity ‘The Ld. Cit(A)’], Order Passed Under Section 250 Of The Income Tax Act 1961 (For Brevity ‘The Act’) For Assessment Year 2011-12, Date Of Order 28.07.2025. The Impugned Order Emanated From The Order Of The Ld. Income-Tax Officer Ward-22(1)(2), Mumbai

For Appellant: Shri DharanGandhi, Adv & Ms. Vinita Nara AdvFor Respondent: Shri Ritesh Misra (CIT DR)

Section 139(1)Section 143(3)Section 153ASection 250

should have submitted documentary evidence to prove the creditworthiness of Mr. Anand Nair and that, in the absence of his bank statement, the genuineness of the transaction cannot be established.’ In this respect, we submit that it is abundantly clear from the facts that the cash of ₹1 crore seized ... appeal, the assessee had taken a loan of Rs.4.87 crores from M/s Height Propcon Pvt. Ltd., for which all necessary evidences establishing identity, genuineness of the transaction, and creditworthiness were furnished vide letter dated 16.12.2019, placed at pages 48 to 66 of the paper book. These included confirmation, ITR, bank

Max Media Technologies Private Limited, Mumbai vs. ITO Ward 12(3)(1), Mumbai

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

ITA 4922/MUM/2025[2013-14]Status: DisposedITAT Mumbai10 Feb 2026AY 2013-14

Bench: Smt. Beena Pillai ()

Section 142(1)Section 143(2)Section 41(1)Section 419

submitted that during the course of assessment proceedings the assessee had furnished the following details to establish the genuineness of the transactions: 1. Name and address of the parties. 2. Copy of ledger accounts of both creditors for the period from 01/04/2008 to 31/03/2013. 3. Copy of invoices for disputed ... further submitted that, the assessee closed its business in the year 2019 and that the assessee discharged its primary onus to establish the genuineness of the transactions recorded in its books of account which were within its knowledge. He submitted that the amount remained outstanding till the closure

DCIT - 19(1), Mumbai, Lalbaugh vs. Bharat Ramji Bhai Manek, Grant Road Mumbai

In the result, the appeal of the revenue bearing ITA No

ITA 4339/MUM/2025[2014-15]Status: DisposedITAT Mumbai10 Feb 2026AY 2014-15

Bench: SHRI ANIKESH BANERJEE (Judicial Member), SHRI MAKARAND VASANT MAHADEOKAR (Accountant Member)

For Appellant: Shri Ronak DoshiFor Respondent: Shri Leyaqat Ali Aafaqui, (SR DR)

Section 10(38)Section 143(3)Section 250

based on artificially rigged prices. Shifting of Onus: In cases of suspicious transactions, especially with penny stocks, the initial onus to prove the genuineness of the transaction, the creditworthiness of the company, and the source of the spectacular gains shifts heavily onto the assessee. The assessee merely provided procedural documents ... facade used to introduce unaccounted income. It is settled principle of law that the primary onus lies on the assessee to substantiate the genuineness of the transaction by furnishing documentary evidence. If the fundamental aspects are satisfied, the burden then shifts to the revenue to bring on record specific material

Rohan Landscape Private Limited, Mumbai vs. The Principle Commissioner of Income Tax, Mumbai

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

ITA 3635/MUM/2025[2020-21]Status: DisposedITAT Mumbai10 Feb 2026AY 2020-21

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 139(1)Section 142(1)Section 143(2)Section 263Section 3

increase in capital creditors 8 Rohan Landscape Private Limited amounting to ₹28,18,91,554, the Principal Commissioner observed that the genuineness of the transactions and their linkage with business activities required verification. On these premises, the Principal Commissioner concluded that the assessment order was erroneous and prejudicial

Choksi Ranchhodlal Kishordas, Ahmedabad vs. The Pr. CIT, Ahmedabad-1, Ahmedabad

In the result, appeal filed by the assessee is allowed

ITA 558/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad09 Feb 2026AY 2013-14

Bench: us, A.Y. 2013-14, in the case of the assessee. According to the Ld. PCIT, the reasons for which the case of the assessee was reopened was not properly inquired into by the AO and, therefore, the assessment order, according to him, was erroneous causing prejudice to the Revenue for not having made any addition on account of income which was believed to have escaped assessment in the case of the assessee. The reopening, it transpires, was resorted to on finding that the assessee had received

For Appellant: Shri Rushin Patel, ARFor Respondent: Shri Rignesh Das, CIT.DR

Section 143(3)Section 147Section 263

find, is also based on his finding that no evidences were furnished by the assessee in support of its explanation of the genuineness of the transaction. This, we find, is an incorrect finding of the Ld.PCIT, since undoubtedly the records reveal the assessee to have furnished all evidences, as noted

Deputy Commissioner of Income Tax, Central Circle-3(3), Kolkata vs. Adhunik Infrastructures Private Limited, Kolkata

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

ITA 1069/KOL/2024[2015-16]Status: DisposedITAT Kolkata09 Feb 2026AY 2015-16

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 131Section 131(1)Section 143(3)Section 148Section 250Section 68Section 69A

account of bogus unsecured loans treated as unexplained cash credit made by the AO since the assessee had failed to establish the genuineness of the transactions and the identity and creditworthiness of the creditors. 2. The Ld. CIT(A) has erred in facts and in law by allowing the appeal ... account of undisclosed income made by the AO since the assessee had failed to establish the genuineness of the transactions and the identity and creditworthiness of the creditors. ITA No.: 1069/KOL/2024 Assessment Year: 2015-16 Adhunik Infrastructures Private Limited. 3. The department craves the right to add, alter, amend

Afzal Pasha, Bengaluru vs. DCIT, Circle-5(1)(1), Bengaluru

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

ITA 233/BANG/2025[2018-19]Status: DisposedITAT Bangalore09 Feb 2026AY 2018-19

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year: 2018-19

For Appellant: Sri B.S. Balachandran, A.RFor Respondent: Sri Balusamy N., D.R

Section 143(2)Section 143(3)Section 250Section 68

than mode of DD/Cheques or ECS. Mr. Ajaz Baig, however, submitted the documentary evidences to prove the identity, creditworthiness of the lender and genuineness of the transactions. However, in respect of balance amount of Rs.2,28,90,059/- of unsecured loans, the assessee merely submitted the PAN & Aadhar copy ... were audited by the Chartered Accountant. Further, with regard to Mr. Ajaz Baig, the assessee had established the identity, creditworthiness as well as genuineness of the transactions as observed by the AO. However, in case of the balance loan creditors, the AO should have given opportunity to cross-examining

Excel Stone Developers Private Limited, Karnataka vs. DCIT-Circle-2(2)(1), Karnataka

In the result, the Appeal filed by the Assessee is allowed for statistical purposes

ITA 1038/BANG/2025[2017-18]Status: DisposedITAT Bangalore09 Feb 2026AY 2017-18

Bench: Shri Prashant Maharishi, Vice – & Shri Soundararajan K.Assessment Year : 2017-18 M/S. Excel Stone Developers Private Limited, The Dcit, Flat No. 106, Butterfly, Mariyappa Circle 2(2)(1), Layout, Panathur, Vs. Bangalore. Karnataka – 560 103. Pan: Aadce8068N Appellant Respondent

For Appellant: None

Section 147Section 148Section 69Section 69A

received from the customer and balance sum is out of cash withdrawal from the bank. The Assessee was asked to show the genuineness of the transaction. However, Assessee was not able to show any documentary evidence and therefore once again the Assessee was asked to produce the evidence. Assessee submitted

Abdurrehman Shamsulhaq Bapu, Mumbai vs. ITO Ward 1(2)(1), Mumbai

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

ITA 4479/MUM/2025[2016-17]Status: DisposedITAT Mumbai09 Feb 2026AY 2016-17

Bench: Shri Amit Shukla & Shri Girish Agrawalassessment Year: 2016-17

For Appellant: Shri Vimal Punmiya, CAFor Respondent: Shri Satya Pal Kumar, CIT DR

Section 144C(2)Section 144C(3)Section 147Section 148Section 250Section 56(2)(vii)Section 69

incorrect because the entire evidentiary record demonstrates that assessee has fully established the identity of the recipient, the genuineness of the transaction, and the source of the payment. iii. Assessee had already explained before the lower authorities that while Rs. 2,66,70,514 was remitted through Foreign Inward Remittances ... Bapu AY 2016-17 vii. Each payment is routed through proper banking channels, leaving no scope for suspicion regarding either the source or genuineness of the transaction. Importantly, the identity and capacity of the recipient stand conclusively established through the Partnership Deed of Zahra Development (PB-160 to 166), which

DCIT, Central Circle-32, New Delhi, Delhi vs. M/S Sanraj Hospitality Pvt. Ltd., Delhi

Appeal is partly allowed

ITA 37/DEL/2026[2019-20]Status: DisposedITAT Delhi09 Feb 2026AY 2019-20

Bench: Shri Satbeer Singh Godara

Section 147Section 69A

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: “SMC” NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No.37/Del/2026

Ved Infra, Dehgam vs. Income-Tax Officer, Ward-2 Gandhinagar, Gandhinagar

In the result, ground no. 3 raised by the assessee is devoid of merits and liable to be dismissed

ITA 1773/AHD/2025[2023-24]Status: DisposedITAT Ahmedabad06 Feb 2026AY 2023-24

Bench: Shri T.R. Senthil Kumar (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)

Section 143(3)

also made addition of Rs.2,14,000/- being unsecured loan from Ranjnaben A. Barot, since she is non- filer of Return, not proved genuineness of the transaction and creditworthiness of the party. 3.2. The assessee firm had earned book profit before remuneration to partners at Rs.1

Raghavan Nambath Menon, Bengaluru vs. ITO, Ward Intl. Taxation 1(2), Bmtc Building, Koramangala, Bengaluru

In the result, I pass the following:-

ITA 278/BANG/2025[2015-16]Status: DisposedITAT Bangalore06 Feb 2026AY 2015-16

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: CA Suresh Muthukrishnan, A.RFor Respondent: Dr. Divya K.J., CIT D.R

Section 143(2)Section 147Section 148Section 148ASection 149Section 149(1)(b)Section 68

income earned abroad. Lastly, in the absence of any proper and valid documents establishing the genuineness & credit worthiness of the party or genuineness of the transaction, the AO also disbelieved the gift received by his wife from her father. 7.1 On going through the above, we are of the considered

ACIT19(3), Mumbai vs. Yogeshkumar Pravinkumar Shah, Mumbai

ITA 6163/MUM/2025[2014-15]Status: DisposedITAT Mumbai06 Feb 2026AY 2014-15

Bench: Shri Pawan Singh, Jm & Shri Arun Khodpia, Am

For Respondent: Revenue by

Section 143(3)

fact that in such cases, where there was a suspicious or bogus trade, the onus is on the assessee to establish the genuineness of the transaction and the claim was not manipulated. The reliance is placed on judgment of Honble Culcutta High Courts decision in the case

Jyoti Ahuja, Delhi vs. ITO Ward-44(1), Delhi

In the result appeal filed by the assessee is allowed

ITA 4270/DEL/2025[2022-23]Status: DisposedITAT Delhi06 Feb 2026AY 2022-23

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

For Appellant: NoneFor Respondent: Sh. Ajay Kumar Arora, Sr. DR

Section 132Section 143(2)

furnished written submission from time to time. The Assessing Officer observed that the case of assessee was selected for scrutiny to verify the genuineness of the transactions uploaded through VRU, identity of parties related with transaction and whether the assessee has shown correct income in the ITR. After considering

ACIT, New Delhi vs. Arjun Enterprises Private Limited, Mumbai

In the result, ground No.5 & 6 raised by the revenue are dismissed

ITA 4257/DEL/2025[2018-19]Status: DisposedITAT Delhi06 Feb 2026AY 2018-19

Bench: Satbeer Singh Godara & Shri S. Rifaur Rahmanacit , Vs. Arjun Enterprises Pvt. Ltd. New Delhi 711, Filix Commercial Complex, Opp Asian Paints L.Bs Marg Bhandup W Mumbai 400078 Maharashtra (Pan: Aahca 1448 A)

For Appellant: NoneFor Respondent: Sh. Jitender Singh, CIT DR

Section 133(6)Section 143(2)Section 40Section 68

order at page 2 and 3 of the assessment order, for the sake of brevity it is reproduced below:- 7. To verify the genuineness of the transactions, notice u/s 133(6) of the Act was issued to the creditors requiring them to provide the nature of business carried

Zeliant Corp, Delhi vs. Income Tax Officer, Ward 36(1), Delhi

The appeal of the assessee is allowed in above

ITA 2201/DEL/2025[2017-18]Status: DisposedITAT Delhi06 Feb 2026AY 2017-18

Bench: Shri M. Balaganesh

Section 133(6)Section 142(1)Section 144(1)(b)Section 144ASection 153(1)Section 2(31)Section 2(31)(iv)Section 250Section 282Section 69A

relatives were also provided to whom the notice u/s 133(6) of the Act were sent to find out identity, creditworthiness and genuineness of the transaction. It is stated that none of the response to the notice u/s 133(6) of the Act fulfilled the criteria to prove the genuineness

ACIT, New Delhi vs. Sparsh Property Private Limited, Delhi

In the result, the Revenue’s appeal as well as Assessee’s cross objection stand dismissed

ITA 5849/DEL/2024[2016-17]Status: DisposedITAT Delhi06 Feb 2026AY 2016-17

Bench: Shri Mahavir Singh & Shri Krinwant Sahayacit, Vs. M/S Sparsh Property Room No. 261-A, 2Nd Floor, Private Limited, E-2, Jhandewalan Extn., 43, Community Center, New Delhi – 110 055 New Friends Colony, S.O. Zakir Nagar, South East Delhi, New Delhi – 110 025 (Pan: Aabcs8660C) (Appellant) (Respondent) C.O. No. 56/Del/2025 (Ita No. 5849/Del/2024) (Ay 2016-17)

For Appellant: Sh. Biren Shah, CA & Sh. Rohit Aggarwal, CAFor Respondent: Sh. Mahesh Kumar, CIT(DR)

Section 132Section 143(1)Section 148Section 68

assessee has submitted some assessment orders of SFPL wherein such entity is accepted to be genuine entity by the AO, which establish the genuineness of the transaction. It is noted that during the assessment proceedings, notice u/s. 133(6) was issued to ANM and SFPL and in response