“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

Income Tax Officer 26(2)(1), Mumbai, Kautilya Bhavan vs. Salim Bros, Null Bazar

In the result appeal of the revenue is allowed for statistical purposes

ITA 3939/MUM/2024[2017-18]Status: DisposedITAT Mumbai16 Jul 2025AY 2017-18

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Anikesh Banerjee, Hon’Ble

For Appellant: NoneFor Respondent: Shri Arun Kanti Datta, CIT, D/R

responsive approach of the assessee the additional evidence/details remained unverified as well as correctness and genuineness of the transaction also remained unexplained. 2. The appellant craves leave to amend or alter or add a new ground which may be necessary. I.T.A. No. 3939/Mum/2024 2 3. None appeared on behalf

Income Tax Officer, Delhi vs. Akash Deep Sethi, Delhi

In the result, the appeal filed by the Revenue is dismissed and at the same time, the cross objections filed by the assessee are also dismissed

ITA 4973/DEL/2024[2021-22]Status: DisposedITAT Delhi16 Jul 2025AY 2021-22

Bench: Shri Challa Nagendra Prasad & Shri S. Rifaur Rahmanincome Tax Officer, Vs. Akash Deep Sethi, Delhi. B-236, Derawal Nagar, Model Town, Delhi – 110 009. (Pan : Abyps8933P) Co No.26/Del/2025 (In Ita No.4973/Del/2024) (Assessment Year: 2021-22) Akash Deep Sethi, Vs. Income Tax Officer, B-236, Derawal Nagar, Delhi. Model Town, Delhi – 110 009. (Pan : Abyps8933P) (Appellant) (Respondent) Assessee By : Shri Ved Jain, Advocate Shri Aman Garg, Ca Ms. Kirti, Ca Revenue By : Shri Ajay Kumar Arora, Sr. Dr Date Of Hearing : 27.05.2025 Date Of Order : 16.07.2025 O R D E R Per S.Rifaur Rahman: 1. This Appeal Is Filed By The Assessee Against The Order Of Ld. Commissioner Of Income-Tax (Appeals)/National Faceless Appeal Centre (Nfac), Delhi

For Appellant: Shri Ved Jain, AdvocateFor Respondent: Shri Ajay Kumar Arora, Sr. DR

Section 133(6)Section 139Section 142(1)Section 143(2)Section 143(3)Section 44A

check basis to the purchases made by the assessee for the value of more than Rs.10 lakhs. Further in order to verify the genuineness of the transaction, notice u/s 133(6) was issued to 12 parties and details of the parties are reproduced at page 4 of the assessment order ... claim the genuineness of the purchases. The AO rejected the basic documents and due to non-response of the suppliers, he doubted the genuineness of the transaction and further observed that the parties have supplied worth of goods between Rs.10 lakhs and Rs.1 crore, they have not filed any return

M/S. Canvas Developers Pvt. Ltd., New Delhi vs. ITO, New Delhi

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

ITA 2416/DEL/2017[2012-13]Status: DisposedITAT Delhi16 Jul 2025AY 2012-13

Bench: Shri M. Balaganesh & Ms Madhumita Roym/S. Canvas Developers Pvt. Ltd, Vs. Ito, C-152, Nirman Vihar, Ward-5(3), New Delhi-92 New Delhi (Appellant) (Respondent) Pan: Aadcc4708E Assessee By : Shri K. V. S. Gupta, Adv Revenue By: Shri Shankar Gupta, Sr. Dr Date Of Hearing 27/06/2025 Date Of Pronouncement 16/07/2025

For Appellant: Shri K. V. S. Gupta, AdvFor Respondent: Shri Shankar Gupta, Sr. DR

Section 131Section 133(6)Section 143(3)Section 263Section 54FSection 68

share premium. The assessee furnished the basic preliminary documents of all the investors before the ld AO. In order to verify the genuineness of the transaction, notice u/s 133(6) of the Act was issued by the ld AO on 10.02.2015 to all the 3 investors. Since, no replies were

Bsas Infortech Limited, Surat vs. Assistant Commissioner of Income Tax, Circle - 1(1)(1), Surat

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

ITA 226/SRT/2024[2016-17]Status: DisposedITAT Surat15 Jul 2025AY 2016-17

Bench: Shri Siddhartha Nautiyal & Shri Bijayananda Pruseth

For Appellant: Shri P M Jagasheth, CAFor Respondent: Shri Ajay Uke, Sr. DR

Section 147Section 148Section 68Section 69

order passed by the CIT(A) confirmed by the ITAT, it appears that CIT(A) was satisfied with respect to the genuineness of the transaction and creditworthiness of Shri Ishwar Adwani and, therefore, deleted the addition of Rs.1,45,00,000/- made by the Assessing Officer. It is required ... appeal proceedings has deleted the additions. During appeal, the assessee was able to produce the confirmation from the creditors in support of genuineness of the transaction, loan agreement with M/s Sandesh Procon LLP, bank statement and audited balance sheet of M/s Sandesh Procon LLP evidencing the above transaction were also

Bsas Infotech Limited, Surat vs. Dy. Commissioner of Income Tax, Circle - 1(1)(1), Surat

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

ITA 225/SRT/2024[2015-16]Status: DisposedITAT Surat15 Jul 2025AY 2015-16

Bench: Shri Siddhartha Nautiyal & Shri Bijayananda Pruseth

For Appellant: Shri P M Jagasheth, CAFor Respondent: Shri Ajay Uke, Sr. DR

Section 147Section 148Section 68Section 69

Bsas Infotech Limited, Surat vs. Dy. Commissioner of Income Tax, Circle -1(1)(1), Surat

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

ITA 224/SRT/2024[2011-12]Status: DisposedITAT Surat15 Jul 2025AY 2011-12

Bench: Shri Siddhartha Nautiyal & Shri Bijayananda Pruseth

For Appellant: Shri P M Jagasheth, CAFor Respondent: Shri Ajay Uke, Sr. DR

Section 147Section 148Section 68Section 69

Manish Ranjan, DCIT, Central Circle-1(2), Ahmedabad vs. Rashmin Kantilal Vakta, Ahmedabad

ITA 866/AHD/2024[2014-15]Status: DisposedITAT Ahmedabad15 Jul 2025AY 2014-15

Bench: Ms.Suchitra R. Kamble & Shri Makarand V.Mahadeokar

For Appellant: Shri S.N. Divetia, AR and Shri Samir Vora, ARFor Respondent: Shri Rignesh Das, CIT-DR

Section 143(1)Section 143(3)Section 147Section 148Section 153CSection 68

accounts. The CIT(A) accepted the explanation, observing that the AO had not brought any contrary material to reject the books or the genuineness of such transactions. Accordingly, addition to this extent was deleted. ITA No.829/Ahd/2024 and three Others Rashmin Kantilal Vakta Vs. DCIT 8 (ii) Inter-Bank Transfers – Rs.12 ... without appreciating the fact that, assessee didn't disclose the transaction in ITR and also failed to corroborate the actual nature and genuineness of the transactions. 2) In the facts and on the circumstances of the case and in law, the ld.ClT(A) has erred in deleting the addition

Manish Ranjan, DCIT, Central Circle-1(2), Ahmedabad, Aaykar Bhawan Ashram Road vs. Rashmin Kantilal Vakta, Ellisbridge Ahmedabad Gujarat

ITA 865/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad15 Jul 2025AY 2013-14

Bench: Ms.Suchitra R. Kamble & Shri Makarand V.Mahadeokar

For Appellant: Shri S.N. Divetia, AR and Shri Samir Vora, ARFor Respondent: Shri Rignesh Das, CIT-DR

Section 143(1)Section 143(3)Section 147Section 148Section 153CSection 68

Rashmin Kantilal Vakta, Ahmedabad vs. The DCIT, Central Circle-1(2), Ahmedabad

ITA 830/AHD/2024[2014-15]Status: DisposedITAT Ahmedabad15 Jul 2025AY 2014-15

Bench: Ms.Suchitra R. Kamble & Shri Makarand V.Mahadeokar

For Appellant: Shri S.N. Divetia, AR and Shri Samir Vora, ARFor Respondent: Shri Rignesh Das, CIT-DR

Section 143(1)Section 143(3)Section 147Section 148Section 153CSection 68

Rashmin Kantilal Vakta, Ahmedabad vs. The DCIT, Central Circle-1(2), Ahmedabad

ITA 829/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad15 Jul 2025AY 2013-14

Bench: Ms.Suchitra R. Kamble & Shri Makarand V.Mahadeokar

For Appellant: Shri S.N. Divetia, AR and Shri Samir Vora, ARFor Respondent: Shri Rignesh Das, CIT-DR

Section 143(1)Section 143(3)Section 147Section 148Section 153CSection 68

Harishkumar Khushalray Bhatt, Ahmedabad vs. The ITO, Ward-3(3)(2) Now Ward-3(3)(1), Ahmedabad

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

ITA 2042/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad15 Jul 2025AY 2017-18

Bench: S/Shri T.R. Senthil Kumar & Makarand V.Mahadeokarasstt.Year : 2017-18 Harishkumar Khushalray Bhatt Ito, Ward-3(3)(2) P/1, Chandragupta Apartment Vs. Ahmedabad. Nr. Gordhandas Patel Hospital Vastrapur Ahmedabad. Pan : Abspb 3786 F (Applicant) (Responent) Assessee By : Shri Pritesh L. Shah, Ar : Shri Uday Kishanrao Kakne, Sr.Dr Revenue By सुनवाई क" तारीख/Date Of Hearing : 07/07/2025 घोषणा क" तारीख /Date Of Pronouncement: 15/07/2025 आदेश/O R D E R आदेश आदेश आदेश

For Appellant: Shri Pritesh L. Shah, AR

Section 143(3)Section 144Section 250Section 68Section 69ASection 80G

such as bank statements or ITRs, the DR submitted that the assessee had failed to discharge the burden of proving the creditworthiness and genuineness of the transactions. The DR opposed the assessee’s request for remand on this issue, contending that the failure to establish the three-fold test under ... assessee, and no supporting documentary evidence such as PAN, bank statements, or income tax returns were submitted to demonstrate creditworthiness or genuineness of the transactions. 23. During the course of hearing before us, the learned Authorised Representative (AR) submitted that the cash deposits in bank accounts were duly recorded

Sajal Impex Pvt. Ltd., Kolkata vs. ITO, Ward 12(1), Kolkata

The appeal of the assessee is allowed

ITA 265/KOL/2025[2012-13]Status: DisposedITAT Kolkata15 Jul 2025AY 2012-13

Bench: Shri Duvvuru Rl Reddy & Shri Rakesh Mishraay 2012-13 Income Tax Officer, Sajal Impex Pvt. Ltd. Ward 12(1), 4, Synagogue Street, Vs. Aaykar Bhawan, Kolkata-700001, West Bengal P-7, Chowringhee Square, (Pan: Aahcs5794D) Kolkata-700069, West Bengal (Appellant) (Respondent) Present For: Appellant By : Shri Miraz D Shah, Ar Respondent By : Shri S.B. Chakraborty, Dr Date Of Hearing : 17.06.2025 Date Of Pronouncement : 15.07.2025 O R D E R Per Rakesh Mishra: This Appeal Filed By The Assessee Is Against The Order Of National Faceless Appeal Centre (Nfac), Delhi (Hereinafter Referred To As “The Ld. Cit(A)”) Passed U/S. 250 Of The Income Tax Act, 1961 (Hereinafter Referred To As “The Act”) For Ay 2012-13 Dated 28.11.2024. 02. The Grounds Of Appeal Raised By The Assessee Are Reproduced As Un- Der:

For Appellant: Shri Miraz D Shah, ARFor Respondent: Shri S.B. Chakraborty, DR

Section 133(6)Section 139(1)Section 142(1)Section 147Section 148Section 250Section 68

transaction should be considered as sham. The assessee has received funds from M/s. Divya Drishti Merchants P Ltd. In order to verify the genuineness of the transactions the AO has issued notice u/s. 133(6) of the IT Act on the available mail ID to M/s. Divya Drishti Merchants ... held that the Assessing Officer has aptly held that the appellant failed in discharging its onus of proving the identity, genuineness of the transaction and creditworthi- ness of the investor-companies. In view of the facts of the case mentioned above and the judicial pronouncements discussed above and also relied

Kalavathi Devi Sharma, Hyderabad vs. ITO, Ward-1, Nanded

In the result, appeal of the assessee is dismissed

ITA 1519/PUN/2024[2016-17]Status: DisposedITAT Pune14 Jul 2025AY 2016-17

Bench: Dr.Manish Borad

For Appellant: NoneFor Respondent: Shri S. Sadananda Singh, JCIT

Section 10(38)Section 147Section 148Section 148ASection 149Section 250Section 68

Investments Ltd. are not that healthy to justify the price of Rs.490/- per share. Now these facts in itself creates suspicion about the genuineness of the transaction because the assessee has not purchased the equity shares through banking channel from the recognised stock exchange. It is a case

Kishor Jethalal Morbia, Mumbai vs. Income Tax Officer 27 (2)(1), Mumbai

In the result, the appeal is accordingly allowed in the above terms

ITA 582/MUM/2025[2018-19]Status: DisposedITAT Mumbai14 Jul 2025AY 2018-19

Bench: Shri Vikram Singh Yadav & Shri Raj Kumar Chauhanvs. Assessing Officer, Kishor Jethalal Morbia Assessment Unit, 304/310, Kailas Plaza, Income Tax Vallabh Baug Lane, Department Ghatkopar (East), Jurisdictional Mumbai-400 075 Assessing Officer, Ito 27(2)(1), Vashi Railway Station, Vashi Navi Mumbai- 400 703 Pan/Gir No. Aabpm4447J (Applicant) (Respondent) Assessee By Shri Anant N. Pai, Ld. Ar Revenue By Shri Hemanshu Joshi, Sr. Dr Date Of Hearing 07.05.2025 Date Of Pronouncement 14.07.2025 आदेश / Order Per Raj Kumar Chauhan, Jm:

Section 250Section 51

very outset submitted that both the lower authorities has not considered the relevant documents submitted by the assessee to prove the genuineness of the transaction and the purchased shares were dematerialized as per the prescribed procedure and thereafter the same has been sold through the stock exchange. During the arguments ... played any role in manipulating the penny scrip. Ld. AR further argued that assessee has filed all the necessary documents to prove the genuineness of the transaction which shows that assessee is trader in shares and has even offered the income from STCG which was made subject

Amol Ceramica Private Limited, Mumbai vs. Income Tax Officer 9.1.2, Churchgate

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

ITA 2013/MUM/2025[21017-18]Status: DisposedITAT Mumbai14 Jul 2025

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhailamol Ceramica Pvt. Ltd., 355, Powai Plaza, Hiranandani Garden Powai, Mumbai - 400076 ............... Appellant Pan : Aaaca4899G V/S Ito – 9(1)(2), 205, Aaykar Bhawan, ……………… Respondent M.K. Road, Church Gate, Mumbai - 400020 Assessee By : Shri R.S. Sharma Revenue By : Shri Aditya M. Rai, Sr.Dr

For Appellant: Shri R.S. SharmaFor Respondent: Shri Aditya M. Rai, Sr.DR

Section 115Section 115JSection 142(1)Section 143(2)Section 143(3)Section 250Section 69A

Accordingly, the assessee was asked to furnish various details to prove the identity and creditworthiness of the loan lender and the genuineness of the transaction. However, the assessee failed to submit ledger confirmation, books of the respective parties, return of income for the assessment year 2017-18, financial statement ... held that the assessee could not discharge 8 the initial burden of proof, i.e., the identity and creditworthiness of the loan lenders and genuineness of the transaction, as the assessee could not submit ledger confirmation from the respective parties, audited accounts, ITR of the respective parties, financial statement

ACIT, Circle-2, Guwahati vs. Arman Ali, Guwahati

In the result, the appeal of the Revenue is dismissed

ITA 79/GTY/2024[2017-18]Status: DisposedITAT Guwahati10 Jul 2025AY 2017-18

Bench: Shri Manomohan Das, Hon’Ble & Shri Sanjay Awasthi, Hon’Ble

For Appellant: Shri Manish Jain, CAFor Respondent: Shri Kaushik Ray, JCIT

Section 142(1)Section 143(2)Section 250Section 68

same. The ld. Assessing Officer [AO] inter alia observed that, the assessee has not established the identity, creditworthiness of the lenders or the genuineness of the transactions. The ld. AO disallow the entire amount of unsecured loans on suspicion of them being own money of the assessee disguised as unsecured

Jitendra Sharma, ACIT, Circle-19(1), Mumbai vs. Kashyap Mahesh Vora, Mumbai

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

ITA 4322/MUM/2024[2012]Status: DisposedITAT Mumbai10 Jul 2025

Bench: BEFOR SHRI ANIKESH BANERJEE (Judicial Member), SMT. RENU JAUHRI (Accountant Member)

For Appellant: Shri K. Gopal a/w Shri AkhileshFor Respondent: Shri Hemanshu Joshi, SR DR

Section 143(3)Section 147Section 250Section 68Section 69C

Regarding the onus of proof in such matters, the Assesee has discharged his burden by submitting all the requisite documents to prove the genuineness of the transactions in alleged penny stocks. The Hon’ble Supreme Court in the case of CIT (Central) Kolkata vs Daulat Ram 8 Shri Kashyap Mahesh ... Rs.59,36,000/-, along with the commission of rs.1,18,720/- allegedly paid to the entry provider. The assessee, in support of the genuineness of the transaction, submitted all relevant documents, including contract notes, broker’s ledger confirmation, demat account statements showing delivery of shares, and proof of transactions undertaken

Shyama Shree, Asansol vs. I.T.O., Ward - 1(1), Asansol

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

ITA 967/KOL/2025[2013-2014]Status: DisposedITAT Kolkata09 Jul 2025AY 2013-2014

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 143(3)Section 147Section 148Section 250Section 69A

assessee had failed to discharge the primary onus to prove the identity, creditworthiness of the creditor and the genuineness of the transaction therefore, the Ld. CIT(A) treated a sum of ₹ 10,65,77,400/- as nothing but unexplained money u/s 69A of the Act and accordingly, confirmed the addition

R.D.Enterprises, Mumbai vs. DCIT, Circle 17(3), Mumbai

In the result, ground no. 1, 2 & 3 of the appeal are allowed

ITA 2980/MUM/2025[2017-18]Status: DisposedITAT Mumbai09 Jul 2025AY 2017-18

Bench: Shri Pawan Singh & Shri Prabhash Shankar(Physical Hearing) R.D. Enterprises Dcit, Circle – 17(3), Mumbai. C-65, Mittal Court, Nariman Point, Vs Kautilya Bhavan, G Block, Mumbai – 400001. Bandra (East), [Pan No. Aaafr1977R] Mumbai – 400051. Appellant / Assessee Respondent / Revenue

Section 115BSection 14ASection 153(3)Section 254(1)Section 68

that not only during assessment but during first appellate stage, the assessee file complete details to substantiate the facts about identity, creditworthy and genuineness of the transaction of loan. On the submissions of the assessee, the ld CIT(A) called remand report from assessing officer. During remand proceedings, the assessing ... crore. The assessing officer also issued notice to related parties, Dhairesh Kantilal Sanghvi and Jeeken Jayantibhai Kharawala to verify the genuineness of loan transaction. The 4 R.D. Enterprises reply was given by assessee and furnished complete details of lenders. Reply was also filed by lenders namely Dhairesh Kantilal Sanghvi

DCIT, New Delhi vs. S K Integrated Consultants, Delhi

ITA 4862/DEL/2024[2015-16]Status: DisposedITAT Delhi09 Jul 2025AY 2015-16

Bench: Shri Anubhav Sharma & Shri Manish Agarwal

For Appellant: Shri Amit Goel, CA &For Respondent: Shri Narpat Singh, Sr. DR

Section 143(3)Section 263Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: G : NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH