← All Phrases

“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

Mrs. Nisha Ashish Gupta, Mumbai vs. ITO-31(2) (4), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1519/MUM/2021[2014-15]Status: DisposedITAT Mumbai23 Jan 2024AY 2014-15

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.1519/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2014-15) Mrs. Nisha Ashish Gupta बिधम/ Ito-31(2)(4) 1501, Anmol Enclave, Opp Pratyakshakar Bhavan, C- Vs. Patel Auto, Goregaon West, 13, Bandra Kurla Mumbai-400062. Complex, Bandra (East), Mumbai-400051. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Adlpg0969J (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Vishnu Agarwal/Shri Amit Agarwal Revenue By: Shri Ashok Kumar Ambastha (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 21/12/2023 घोषणा की तारीख /Date Of Pronouncement: 23/01/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals)/Nfac, Delhi Dated 18.08.2021 For The Assessment Year 2014-15. 2. The Main Grievance Of The Assessee Is Against The Action Of The Ld. Cit(A) Upholding The Action Of The Ao Disallowing The Long Term Capital Gain (Ltcg) Claimed By The Assessee In Respect Of Sale Of Shares M/S. Sunrise Asian Limited (Hereafter “M/S. Sunrise”) Of Rs.98,81,550/- U/S 68 Of The Income Tax Act, 1961 (Hereinafter “The Act”). & Thus Denying Deduction U/S 10(38) Of The Act As Well As Upholding Addition Of Rs.1,97,631/- As Commission For Arranging The Bogus Ltcg (2% Of Commission) U/S 69C Of The Act.

For Appellant: Shri Vishnu Agarwal/Shri AmitFor Respondent: Shri Ashok Kumar Ambastha (Sr
Section 10(38)Section 132(4)Section 147Section 68Section 69C

Nisha Ashish Gupta by entry operators for converting unaccounted money of beneficiaries like assessee in the garb of LTCG/loss, disbelieved the genuinity of the transaction. The AO in the assessment order explained the modus operandi followed by the entry operators for providing accommodation entries to beneficiaries like assessee ... this, all that the Commissioner observed is that the Assessee transacted through brokers at Calcutta, which itself raises doubt about the genuineness of the transactions and the financial result and performance of the Company was not such as would justify the increase in the share prices. Therefore, he reached

Purus Builders Private Limited, New Delhi vs. ITO Ward-20(2), New Delhi

In the result, the appeal of the assessee is dismissed

ITA 368/DEL/2021[2012-13]Status: DisposedITAT Delhi23 Jan 2024AY 2012-13

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharmaassessment Year: 2012-13 Purus Builders Private Ltd., Vs Ito, A-404, Mayfair Apartment, Ward-20(2), Plot No.96, New Delhi. Patpar Ganj, New Delhi – 110 092. Pan: Aaecp1713C (Appellant) (Respondent) Assessee By : None Revenue By : Shri Sumesh Swani, Sr. Dr Date Of Hearing : 23.01.2024 Date Of Pronouncement : 23.01.2024 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Assessee Against Order Dated 26.08.2020 Of The Commissioner Of Income Tax (Appeals), Delhi-36 (Hereinafter Referred As Ld. First Appellate Authority Or In Short ‘The Ld. Faa’) In Appeal No.Cit(A), Delhi-36/10130/2016-17 Arising Out Of The Appeal Before It Against The Order Dated 27.03.2015 Passed U/S 143(3)/144 Of The Income Tax Act, 1961 (Hereinafter Referred As ‘The Act’) By The Ito, Ward-20(2), New Delhi (Hereinafter Referred To As The Ld. Ao). 2. As The Case Was Called For Hearing, None Has Appeared For The Assessee. Record Shows That Notices Have Been Issued Repeatedly & Also Representative Have Appeared & Sought Adjournment. None Has Appeared Today. No Notice Is Justified. The Ld. Dr Was Heard Who Supported The Findings Of The Ld. Tax Authorities Below.

For Appellant: NoneFor Respondent: Shri Sumesh Swani, Sr. DR
Section 131Section 131(2)Section 133(6)Section 143(3)Section 68

returns of shareholder companies. 5. However, the tax authorities below have found them to be insufficient to establish the identity, credit worthiness and genuineness of the transaction. 6. We find no error in the findings of the ld. tax authorities as merely, on the basis of documents relied

The Dy. Commissioner of Income Tax, Central Circle-5(1), Mumbai vs. M/S Speco Infrastructure, Mumbai

In the result, Appeal of the LD AO is dismissed

ITA 2324/MUM/2023[2013-2014]Status: DisposedITAT Mumbai22 Jan 2024AY 2013-2014

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm The Dy. Commissioner Of Income Ms Speco Infrastructure Tax, C-110, Shyam Kamal, 27, Central Circle 5(1), Tejpal Road, Agarwal Market, Room No.1928, 19 Th Floor, Air Vs. Ville Parle, East India Building, Nariman Point, Mumbai-400 057 Mumbai-400 021 (Appellant) (Respondent) Pan No. Acefs4960M Assessee By : Shri Jaiprakash Bairagra, Ar Revenue By : Shri Ram Krishna Kedia, Sr. Ar Date Of Hearing: 12-01-2024 Date Of Pronouncement : 22.01.2024

For Appellant: Shri Jaiprakash Bairagra, ARFor Respondent: Shri Ram Krishna Kedia, SR. AR
Section 132Section 143(2)Section 143(3)Section 147Section 148Section 148ASection 37(1)Section 68

respect of unsecured loans ignoring the facts that the assessee has not proved the genuineness of the transaction, the identity of most of the creditors, and credit-worthiness of the parties to the satisfaction of the AO, so as to discharge the primary onus?" 3. "Whether on the facts ... respect of interest expenses on unsecured loans ignoring the facts that the assessee has not proved the genuineness of the transaction, the identity of most of the creditors, and credit- worthiness of the parties to the satisfaction of the AO, so as to discharge the primary onus?" 4. "The appellant

DCIT, CC-5(1), Mumbai vs. Hetal N. Shah (Leagal Heir of the Assessee Shri Nitin Rajmal Shah), Mumbai

In the result, we admit the appeal of the AO as it has been replaced by bringing the legal heir of deceased assessee on record but dismissed the appeal on the merits of the addition

ITA 1080/MUM/2023[2012-13]Status: DisposedITAT Mumbai22 Jan 2024AY 2012-13

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm Hetal Nitin Shah Dcit Legal Heir Of Nitin Rajmal Central Circle 5(1) Room No.1928, 19 Th Floor, Shah Air India Building, 301, Chandramani, Vs. Nariman Point, Hanuman Road, Mumbai-400 021 Vile Parle(E), Mumbai-400 057 (Appellant) (Respondent) Pan No. Aadps5476M Assessee By : Shri Jaiprakash Bairagra, Ar Revenue By : Shri Ashok Kumar Ambastha, Dr Date Of Hearing: 16.11.2023 Date Of Pronouncement : 22.01.2024

For Appellant: Shri Jaiprakash Bairagra, ARFor Respondent: Shri Ashok Kumar Ambastha
Section 131Section 132Section 133ASection 143Section 143(3)Section 68

done by making adequate enquiry and proving that the evidences placed by the assessee of identity and creditworthiness of the parties and the genuineness of the transaction are not valid. In the present case, the assessee has placed all these evidences showing the identity and creditworthiness of the parties ... well as the genuineness of the transaction along with the repayment of the loan. The learned assessing officer has not carried out any enquiry on such evidences. Therefore, the assessee has discharged initial onus cast upon him under section 68 of the act, therefore the addition under section 68 cannot