“source of source”

Cash Credits & Unexplained ItemsSection 68Section 68810 judgments

The decision most relied on for source of source is Jute Corporation of India Ltd. v. CIT (187 ITR 688), cited in 1,372 judgments on BharatTax.

Leading authorities on source of source

Jute Corporation of India Ltd. v. CIT

187 ITR 688 · 1991 · Supreme Court

1,372

citing judgments

The Commissioner of Income Tax (Appeals) possesses co-terminus powers with the Assessing Officer and can direct the Assessing Officer to perform actions he failed to do, but cannot introduce a new source of income in the assessment. The appellate assessment must be confined to the items of income that were the subject matter of the original assessment.

Totgars Co-operative Sale Society Ltd. v. ITO

322 ITR 283 · 2010 · Supreme Court

1,283

citing judgments

The interest income earned by a cooperative society from investing its surplus funds in fixed deposits with banks is not "derived from" its eligible business activities and is taxable as "income from other sources" under Section 56, thus not qualifying for deduction under Section 80P.

K.P. Varghese v. ITO

131 ITR 597 · 1981 · Supreme Court

989

citing judgments

An addition to income cannot be made merely on the basis of a difference in valuation of assets or a Valuation Officer's report without establishing actual understatement of consideration or the source of unexplained funds through proper enquiry. The Assessing Officer must conduct proper enquiry and satisfy the conditions for making such additions.

GE India Technology Centre Pvt. Ltd. v. CIT

327 ITR 456 · 2010 · Supreme Court

663

citing judgments

Tax must be deducted at source from payments made to a non-resident under Section 195 only if such payment is chargeable to tax in India. The Assessing Officer bears the onus to establish that the payments made are indeed chargeable to tax under the Income Tax Act.

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.

Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT

227 ITR 172 · 1997 · Supreme Court

621

citing judgments

Interest income earned on deposits, particularly before the commencement of business operations or as a requirement for business licensing, is taxable as "income from other sources" under Section 56, and cannot be treated as business income or set off against interest on borrowed funds.

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.

Liberty India v. CIT

317 ITR 218 · 2009 · Supreme Court

571

citing judgments

The Supreme Court clarified that for profits and gains to be eligible for deductions under sections like 10B, 80IA, or 80IB, the income must be "derived from" or have a direct nexus to the eligible business activity. Income from incidental sources like the sale of scrips/licenses or interest on employee loans is generally not considered as derived from the eligible business for such deductions.

Judgments citing source of source

Beekay Steel Industries Ltd., Kolkata vs. DCIT, Central Circle 2(3), Kolkata

In the result, the appeal of the assessee is allowed

ITA 346/KOL/2025[2012-2013]Status: DisposedITAT Kolkata30 Jul 2025AY 2012-2013

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm Beekay Steel Industries Ltd. Dcit, Central Circle-2(3), C/O Subash Agarwal & Aaykar Bhavan Poorva, Associates, Advocates, Siddha 110, Shantipally, Vs. Gibson, 1, Gibson Lane, Suite Kolkata-700107, West Bengal 213, 2Nd Floor, Kolkata-700069 (Appellant) (Respondent) Pan No. Aabcb3205A Assessee By : Shri Siddarth Agarwal, Ar Revenue By : Shri Raja Sengupta, Dr Date Of Hearing: 21.05.2025 Date Of Pronouncement: 30.07.2025

For Appellant: Shri Siddarth Agarwal, ARFor Respondent: Shri Raja Sengupta, DR

Section 131Section 143(1)Section 68

That it is vehemently submitted that as per the Second Proviso to section 68 of the Act, the statutory embargo of proving 'Source of Source' of funds i.e. to discharge burden of proof u/s. 68 of the Act, the source of funds of the share subscribers need ... issue of equity shares was submitted. Despite the Second Proviso to section 68 not applying to the Assessee Company, the source of source was adequately explained along with a cogent explanation for the premium charged on the issue of equity shares during the course of the quasi-judicial

Income Tax Officer Ward-16(3), Delhi ITO vs. Mansarover Exim Pvt. Ltd., Delhi

ITA 1275/DEL/2024[2012-13]Status: DisposedITAT Delhi30 Jul 2025AY 2012-13

Bench: Ms.Madhumita Roy & Shri Manish Agarwal[Assessment Year : 2012-13] Ito, Vs Mansarover Exim Pvt.Ltd., Ward-16(3), 2, First Floor, Pocket-H-34, Delhi Plot No.35, Sector-3, Rohini, New Delhi-110085. Pan-Aaecm9328A Appellant Respondent Revenue By Ms. Amisha S.Gupta, Cit Dr Assessee By Shri Rohit Jain, Adv., Shri Shourya Jain, Ca & Shri Deepesh Jain, Adv. Date Of Hearing 06.05.2025 Date Of Pronouncement 30.07.2025 Order

Section 131Section 133(6)Section 142(1)Section 143(2)Section 143(3)Section 250Section 68

proved that any cash was deposited prior to giving cheque to appellant. Further even though appellant was not required to prove sources of source, the bank statement submitted by appellant clearly reflects such sources which is not doubted by A.O. nor any inquiry has been made ... year before us is AY 2012-13 thus, this amendment is not applicable. 15. As observed above, the requirement of explaining ‘Source’ of ‘Source’ in respect of loans is applicable from A.Y. 2023-24 and subsequent years. Reliance in this regard is placed on the judgement

Bhagwati Developers, Bishnupur vs. I.T.O.Ward-26(1), Kolkata

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

ITA 2166/KOL/2024[2012-13]Status: DisposedITAT Kolkata29 Jul 2025AY 2012-13

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) I.T.A. No. 2166/Kol/2024 Assessment Year: 2012-2013 Bhagwati Developers,………………………..…Appellant Chandandaha Bibirhat, P.O. Charashyamdas P.S. Bishnupur, South 24-Parganas-700162 [Pan:Aakfb2520N] -Vs.- Income Tax Officer,……………………………..Respondent Ward-26(1), Kolkata, Aayakar Bhawan, Dakshin, 2, Gariahat Road, Kolkata-700031 Appearances By: Shri Amit Agarwal, Advocate, Appeared On Behalf Of The Assessee Shri Susanta Saha, Sr. D.R., Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: May 21, 2025 Date Of Pronouncing The Order: July 29, 2025 O R D E R

Section 143(3)Section 147Section 250Section 271(1)(c)Section 69A

also explained the source of the partner was gift from her mother but the ld. Assessing Officer asked for the source of source from the mother. Therefore, he pleaded to delete the addition made by the ld. Assessing Officer. He further submitted that the amount of Rs.20

M/S. Amritlaxmi Vincom Pvt. Ltd., Kolkata vs. I.T.O., Ward - 4(3), Kolkata

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

ITA 2553/KOL/2024[2012-2013]Status: DisposedITAT Kolkata28 Jul 2025AY 2012-2013

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) I.T.A. No. 2553/Kol/2024 Assessment Year: 2012-2013 Amrit Laxmi Vincom Pvt. Ltd.,…………….…Appellant 23A, Netaji Subhash Road, Dalhousie, Room No. 10, 1St Floor, Kolkata-700001, West Bengal [Pan:Aaica5974A] -Vs.- Income Tax Officer,…………………..…………..Respondent Ward-4(3), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances By: Shri Sunil Surana, A.R., Appeared On Behalf Of The Assessee Shri L.N. Dash, Addl. Cit(Dr), Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: May 07, 2025 Date Of Pronouncing The Order: July 28, 2025 O R D E R

Section 144Section 147Section 148

that the addition of Rs.13,00,000/- was not justified since the assessee was not required to prove the source of source of loans taken for the year under consideration and further when the party had substantial net worth. (9) For that on the facts

Vijay Israni, Delhi vs. DCIT, Central Circle-6, Delhi

In the result, the assessee’s appeal is allowed for statistical purposes

ITA 752/DEL/2025[2013-14]Status: DisposedITAT Delhi28 Jul 2025AY 2013-14

Bench: Shri Satbeer Singh Godara & Shri Avdhesh Kumar Mishra

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

confirming the addition made on account of unexplained cash credit wherein the assessee being an individual was not required to prove the source of source of the loans received for the year under consideration under the provisions of section 68 of the Income

Chinnasaminaidu Chandrasekar, Hosur vs. Income Tax Department, Hosur

ITA 3119/CHNY/2024[2015-16]Status: DisposedITAT Chennai23 Jul 2025AY 2015-16

Bench: Shri Manu Kumar Giri & Shri S. R. Raghunathaआयकर अपील सं./Ita No.:3119/Chny/2024 निर्धारण वर्ष / Assessment Year: 2015-16 Chinnasaminaidu Chandrasekar, 3-591, Athimugam, Hosur, Krishnagiri – 635 105. [Pan:Bwrpc-0650-C] (अपीलार्थी/Appellant) अपीलार्थी की ओर से/Appellant By प्रत्यर्थी की ओर से/Respondent By Income Tax Officer, Vs. Ward -1, Hosur. (प्रत्यर्थी/Respondent) : Shri. L. Mahesh Kumar, Advocate : Ms. Gouthami Manivasagam, J.C.I.T. सुनवाई की तारीख/Date Of Hearing घोषणा की तारीख/Date Of Pronouncement आयकर अपील सं./Ita No.:3119/Chny/2024 : 26.06.2025 : 23.07.2025 आदेश /Order Per S.R. Raghunatha, Am: This Is An Appeal By The Assessee Against The Order Dated 09.10.2024 Under Section 250 Of Income Tax Act, 1961 (In Short “The Act”) Passed By The Learned Commissioner Of Income Tax (Appeals), Nfac, Delhi, (Ld.Cit(A)) In Relation To

Section 142(1)Section 148Section 156Section 250

Payment Amount Paid Bank Statements of Shri. Srinivas Relative (Daughters Husband) 463426 2(d) Kaveri Grameen Bank 18.07.2014 5,00,000 Source of source Relevant bank statement of Mr Srinivas for Account no SB/01/001716 with Corporation Bank, reflecting the transaction (he had received Rs. 15 lakhs from Shubha

DCIT CC 7(3), Mumbai vs. M/S Tirupati Developers, Mumbai

In the result, both the appeal of the revenue and CO of the assessee are

ITA 2165/MUM/2019[2012-13]Status: DisposedITAT Mumbai21 Jul 2025AY 2012-13

Bench: Ms. Kavitha Rajagopal & Smt. Renu Jauhriआयकर अपील सं./Ita No. 2165/Mum/2019 (निर्धारण वर्ष / Assessment Year :2012-13) Dcit Cc – 7(3), Room No. 655, 6Th Floor, Aayakar Bhavan, M. K. Road, Mumbai-400020 V/S. बनाम M/S. Tirupati Developers. 419, Laxmi Plaza, Laxmi Industrial Estate, New Link Road, Andheri (W.), Mumbai-400053 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaeft6810B Appellant/अपीलार्थी .. Respondent/प्रतिवादी प्रति आपत्ति सं./ Co No. 110/Mum/2021 (Arising Out Of Ita No. 2165/Mum/2019) (निर्धारण वर्ष / Assessment Year :2012-13) M/S. Tirupati Developers. V/S. Dcit Cc – 7(3), 419, Laxmi Plaza, Laxmi बनाम Room No. 655, 6Th Floor, Industrial Estate, New Aayakar Bhavan, M. K. Link Road, Andheri (W.), Road, Mumbai-400020 Mumbai-400053 Appellant/अपीलार्थी .. Respondent/प्रतिवादी स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaeft6810B निर्धारिती की ओर से /Assessee By: Shri Rushabh Mehta राजस्व की ओर से /Revenue By: Shri Biswanath Das सुनवाई की तारीख / Date Of Hearing 18.07.2025 घोषणा की तारीख/Date Of Pronouncement 21.07.2025 Page 2

For Appellant: Shri Rushabh MehtaFor Respondent: Shri Biswanath Das

Section 132Section 143(3)Section 153ASection 250Section 68

Accordingly, the assessee has discharged its onus u/s 68 of the Act by substantiating even the source of source of alleged lender company. On the contrary, the Assessing Officer has solely placed reliance on the statement of Hitesh Thakkar, Jignesh Mavadia and Uday Shankar Mahawar which has been

ACIT, New Delhi vs. M/S. Alodie Estates Pvt. Ltd., New Delhi

In the result, the appeal of the revenue is dismissed

ITA 1730/DEL/2016[2011-12]Status: DisposedITAT Delhi18 Jul 2025AY 2011-12

Bench: Shri Sudhir Kumar & Shri Manish Agarwalassessment Year: 2011-12 Asstt. Commissioner Of Vs. M/S. Alodie Estates Pvt. Ltd. 2Nd Income Tax, Central B-4/43, Floor, Safdarjung Circle-2, New Delhi Enclave, New Delhi-110029 Pan No.Aaica1782G (Appellant) (Respondent)

Section 132Section 139Section 147Section 148Section 68

unexplained income of the assessee. It has also been held that the assessee cannot be presumed to have special knowledge about the source of source or origin of origin and once the assessee points out a depositor from whom he has received money and if the depositor owns ... advancement of money to the assessee, the further enquiry into the source of source or failure to explain source of source cannot result in invoking the provisions of section 68 and it will not, therefore, be for the assessee to explain further

Pramod Kumar Choudhary, Jaipur vs. ITO, Jaipur

In the result, the appeal of the assessee is allowed

ITA 206/JPR/2025[2012-13]Status: DisposedITAT Jaipur09 Jul 2025AY 2012-13

For Appellant: Shri Vinod Kumar Gupta, CAFor Respondent: Shri Gautam Singh Choudhary, JCIT

Section 143(3)Section 147Section 69

been investment in the property purchased jointly by the appellant during the year under consideration. The only objection was regarding the source of source. 8. Here it is apposite to note that the source of investment i.e. gift was well supported by the gift deeds executed ... rest merely on conjecture, assumption, or suspicion. 11. Furthermore, can the appellant be reasonably expected to bear the onus of proving the "source of source" in relation to the donor(s), particularly when the donors themselves have clearly explained the source of the gift? In this regard

Himgiri Realtors Pvt. Ltd., New Delhi vs. ITO, Ward- 11(3), New Delhi

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

ITA 7080/DEL/2018[2012-13]Status: DisposedITAT Delhi09 Jul 2025AY 2012-13

Bench: Shri S. Rifaur Rahman & Shri Vimal Kumarhimgiri Realtors Private Limited, Vs. Ito, Ward 11 (3), Flat No.818, 8Th Floor, New Delhi. Devika Tower 6, Nehru Place, New Deli – 110 019. (Pan : Aabch6093E) (Appellant) (Respondent) Assessee By : Shri I.P. Bansal, Advocate Shri Vivek Bansal, Advocate Revenue By : Shri Dayainder Singh Sidhu, Cit Dr Date Of Hearing : 04.06.2025 Date Of Order : 09.07.2025 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)-35, New Delhi [Hereinafter Referred To As ‘Ld. Cit (A)] Dated 28.08.2018 For Assessment Year 2012-13 Raising Following Revised Grounds Of Appeal :- “1. That Under The Facts & Circumstances Of The Case, The Impugned Appeal Order Is Bad In Law, Illegal & In Violation Of Rudimentary Principal Of Contemporary Jurisprudence.

For Appellant: Shri I.P. Bansal, AdvocateFor Respondent: Shri Dayainder Singh Sidhu, CIT DR

Section 133(6)Section 142(1)Section 2(22)(e)Section 68

they are applicable to the FY 2011-12 relevant to A Y 2012-13, do not require the assessee to prove the source of source. 2. Ground No.1 raised by the assessee is general in nature, hence does not require any adjudication. 3. With regard to Ground No.2

Vital Care Private Limited, Vadodara vs. The Dy. CIT, Circle-2(1)(1), Vadodara

In the result, the appeal of the assessee is allowed

ITA 527/AHD/2025[2014-15]Status: DisposedITAT Ahmedabad08 Jul 2025AY 2014-15

Bench: Dr. Brr Kumar & Ms. Suchitra Kambleassessment Year 2014-15

For Appellant: Ms. Rangoli Gada, C.AFor Respondent: Shri Suresh Chand Meena, Sr. D.R

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

believed that the assessee has failed to prove the identity, credit worthiness and genuineness of the transaction and could not substantiate the source of source of such transaction. The I.T.A No. 527/Ahd/2025 Vital Care Pvt. Ltd., A.Y. 2014-15 assessing officer treated the same as unexplained cash credits

Paresh Dayashankar Madeka, Rajkot vs. The Income Tax Officer, Ward-2(2)(3), Rajkot

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

ITA 343/RJT/2024[2011-12]Status: DisposedITAT Rajkot03 Jul 2025AY 2011-12

For Appellant: Shri R. D. Lalchandani, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR

Section 143(1)Section 143(3)Section 148

creditworthiness and genuineness of the transactions and this transaction being prior to A.Y.2013-14, the appellant is under no obligation to explain the source of source and origin of origin all these deposits. Reliance is placed in the case of recent decision in the case of CIT v Gagandeep ... creditors. because under law, assessee can be asked to prove source of credits in its books of account but not source of source Held, yes Whether merely because summons issued to some of creditors could not be served or they failed to appear before Assessing Officer, could

Harsh Comtrade Pvt Ltd, Surat vs. Income Tax Officer, Ward 5(4), Kolkata

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

ITA 225/KOL/2024[2012-13]Status: DisposedITAT Kolkata01 Jul 2025AY 2012-13

Bench: Shri George Mathanआयकर अपील सं/Ita No.225/Kol/2024 (नििाारण वर्ा / Assessment Year :2012-2013) Harsh Comtrade Private Limited, Vs Ito, Ward-5(4), Kolkata 1/A, Stuti Apartment, Near Ashok Panhouse, City Light, Surat, Gujarat Pan No. :Aabcg 8847 C (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) : Shri Mehul Shah, Ar नििााररती की ओर से /Assessee By राजस्व की ओर से /Revenue By : Shri S.B. Chakraborthy, Addl. Cit-Sr.Dr सुनवाई की तारीख / Date Of Hearing : 01/07/2025 घोषणा की तारीख/Date Of Pronouncement : 01/07/2025 आदेश / O R D E R This Is An Appeal Filed By The Assessee Against The Order Of The Ld Cit(A), National Faceless Appeal Centre (Nfac), Delhi, Dated 28.12.2023, Passed In Din & Order No.Itba/Nfac/S/250/2023-24/1059161646(1) For The Assessment Year 2012-2013. 2. Shri Mehul Shah, Ld. Ar Appeared On Behalf Of The Assessee & Shri S.B.Chakraborthy, Ld.Sr. Dr Appeared On Behalf Of The Revenue. 3. At The Time Of Hearing, Ld. Ar Submitted That He Has Filed Written Submissions Before The Tribunal Which Has Been Placed In The Paper Book At Pages 90 To 104 Which Reads As Follows :- Before Income Tax Appellate Tribunal, Kolkata - 'Smc' Bench In The Case Of Harsh Comtrade Pvt. Ltd Sub: Written Submission For A.Y. 2012-13 Ref: Assessee'S Appeal No. 225/Kol/2024 Date Of Hearing: 21.08.2024 May It Please To Your Honour 1. In This Case, The Case Is Re-Opened On The Basis Of Reasons For Reopening Recorded On 23.03.2018. The Same Is Reproduced

For Respondent: Shri S.B. Chakraborthy, Addl. CIT-Sr.DR

Section 148

Roopam Sarees Pvt. Ltd, the Ld CIT(A) using his power co-terminus with the power of AO has scrutinized the source of source in the hands of Roopam Sarees Pvt Ltd and such source of source in the bank account of Harsh Comtrade

DCIT, Circle-1(3), Surat, Anavil Business Centre, Adajan vs. Shri Asfaq Hajiyunus Noorani, Rander

In the result, appeal of the revenue is dismissed

ITA 716/SRT/2023[2018-19]Status: DisposedITAT Surat30 Jun 2025AY 2018-19

Bench: Ms Suchitra Raghunath Kamble & Shri Bijayananda Prusethआयकर अपील सं./Ita No.716/Srt/2023 Assessment Year: (2018-19) (Hybrid Hearing) Dcit, Vs. Asfaq Hajiyunus Noorani, Circle – 1(3), 1, Abdullah Park, Gorat Road, Surat Rander, Surat - 395009 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Aaopn6148A (Appellant) (Respondent) Appellant By Shri Mukesh Jain, Cit-Dr Respondent By Shri Suresh K. Kabra, Ca Date Of Hearing 05/06/2025 Date Of Pronouncement 30/06/2025

Section 133(6)Section 250Section 250(2)Section 68

genuine in the face of details submitted by the assessee. We find that the appellant had explained even the source of source in most cases. The AO has not considered all the details and evidences submitted by the assessee during assessment proceedings. The source of funds utilized

Dy. Commissioner of Income-Tax-1(1)(1), Mumbai vs. M/S. Chopra Strips Limited, Rajasthan

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

ITA 6818/MUM/2024[2012]Status: DisposedITAT Mumbai30 Jun 2025

Bench: Shri Narender Kumar Choudhry & Smt. Renu Jauhriआयकर अपील सुं./Ita No. 6818/Mum/2024 (नििाारण वर्ा / Assessment Year :2012-13) Dcit-1(1)(1), Mumbai V/S. M/S. Chopra Strips Ltd. बिाम Room No. 579A, 5 Th Floor, D-194-195, Boranada Agro Aayakar Bhawan, Mumbai- Food Park, Jodhpur, 400020 Rajasthan-342008 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaccc3063C Appellant/अपीलार्थी .. Respondent/प्रनिवादी निर्ााररती की ओर से /Assessee By: Shri Vinod Kumar Bindal/Shri Satish Gupta राजस्व की ओर से /Revenue By: Shri Yogesh Kumar, Sr. Dr.

For Appellant: Shri Vinod Kumar Bindal/ShriFor Respondent: Shri Yogesh Kumar, Sr. DR

Section 143(1)Section 143(3)Section 148Section 68

satisfactory either on account of non-submission of some document/evidence or on account of cash deposit in the bank account of "source of source" just prior to payment by "such source of source" person to the "source" person of the appellant. From the submission made ... evidence is at the stage of assessment proceedings where AO or DDIT to whom commission was given might have tried to establish source of source was bogus and originated or connected to sources close to the appellant. However no such findings were gathered or noted