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“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

G.S.Auto International Limited, Ludhiana vs. Asstt. Commissioner of Income Tax, Central Circle-II, Ludhiana

In the result, the appeal of the assessee stands allowed

ITA 391/CHANDI/2023[2012-2013]Status: DisposedITAT Chandigarh17 May 2024AY 2012-2013

Bench: Shri Sanjay Garg & Shri Vikram Singh Yadavआयकर अपील सं./ Ita No.391/Chandi/2023 "नधा"रण वष" / Assessment Year : 2012-13 G.S. Auto International बनाम Acit, Central Circle-Ii, Limited Ludhiana G.S. Estate, G T Road, Ludhiana. "थायी लेखा सं./Pan No: Aaacg6090R अपीलाथ"/Appellant ""यथ"/Respondent "नधा"रती क" ओर से/Assessee By : Shri P. K. Goel, Ca & Shri Sunil Arora, Advocate. राज"व क" ओर से/ Revenue By : Shri Rohit Sharma, Cit, Dr सुनवाई क" तार"ख/Date Of Hearing : 01.04.2024 उदघोषणा क" तार"ख/Date Of Pronouncement : 21.05.2024 आदेश/Order Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 05.04.2023 Of The Commissioner Of Income Tax (Appeals)-5, Ludhiana [Hereinafter Referred To As The ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: Assessment Year : 2012-13 G.S. Auto International Limited Page 2 Of 6

For Appellant: Shri P. K. Goel, CA and Shri SunilFor Respondent: Shri Rohit Sharma, CIT, DR
Section 153ASection 250Section 68Section 69

addition failed to appreciate that the appellant being a company in which public are substantially interested1S not required to prove the source of source as per provisions of Sec. 68 of the Act. 8. That the Ld. CIT(A)-5 while sustaining the addition on account of Warrant/Application

Dev Darshan Designs Pvt. Ltd., Kolkata vs. ITO, Ward 14(1), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 34/KOL/2024[2014-15]Status: DisposedITAT Kolkata15 May 2024AY 2014-15

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.34/Kol/2024 Assessment Year: 2014-15 Dev Darshan Designs Pvt. Ltd.……….......................…...……………....Appellant P-40, 1St Floor, Kajinajrul Islam Avenue, Kolkata-700157. [Pan: Aadcd1890P] Vs. Ito, Ward-14(1), Kolkata….……............…..........................…..…..... Respondent Appearances By: Shri Sunil Surana, Ar, Appeared On Behalf Of The Assessee. Shri P. P. Barman, Addl. Cit-Dr, Appeared On Behalf Of The Department. Date Of Concluding The Hearing : April 09, 2024 Date Of Pronouncing The Order : May 15, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 07.11.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Agitated Against The Confirmation Of Addition Of Rs.2,67,60,000/- Made By The Assessing Officer On Protective Basis In Respect Of The Loan Amount Received By The Assessee From One Of Its Director & His Relatives. 3. The Brief Facts Of The Case Are That The Assessee Filed Its Return Of Income For The Assessment Year Under Consideration Declaring A Total

Section 143(2)Section 250Section 68

creditors, genuinity of the transaction and Creditworthiness of the parties. The same has not been disputed. The Ld AO has doubted the source of source, It is submitted that the assessee is not required to prove the source of source in case of loans