← All Phrases

“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

ACIT, CC- 30, New Delhi vs. J H Jewellers LLP, New Delhi

In the result, the appeal of Revenue is dismissed

ITA 809/DEL/2021[2016-17]Status: DisposedITAT Delhi13 Oct 2023AY 2016-17

Bench: Shri Chandra Mohan Garg & M.Balaganeshassessment Year: 2016-17 The Dcit, Central Circle-30, New Delhi M/S. J H Jewellers Llp, 13, Sunder Nagar Market, Kasturba Vs. Nagar, South East, Delhi 110003 Pan Aacfj 3285 G (Appellant) (Respondent) For Revenue: Shri Waseem Arshad, Cit(Dr) For Assessee: Shri U.N Marwah, Ca Shri Parveen Goel, Adv. Date Of Hearing : 23.08.2023 Date Of Pronouncement : 13.10.2023 Order Per Chandra Mohan Garg, J.M. This Appeal Has Been Filed Against The Order Cit(A)-30, New Delhi Dated 25.03.2021 For A.Y. 2016-17. 2. The Grounds Have Been Raised By The Revenue Are As Follows:- 1. The Cit(A) Has Erred In Law & On The Facts In Deleting The Rs.11,24,76,000/- Additions Of Rs. 32,50,00,000/- Made U/S 68 Of The It Act 1961. 2. The Cit(A) Has Erred In Law & On The Facts Of The Case Considering That As Per The Balance Sheet Of These Companies As On 31.03.2016, The Said Fund Were Available In The Balance Sheet Of All The Four Companies Under The Head "Cash & Cash Equivalents" As On 31.03.2015 Which Are Now Reflected In Current Investment In I.E. Investment As Capital In The Appellant Firm As On31.03.2016. Further, Relying On The Submission Of The Assessee That The Said Four Companies Introduced Funds In The Ay 2008-09, The Case Of Maharaja Tie Up, Dynamic Enclave & Shivshakti Commercial Pt Ltd Were Assessed W/S 147 Of The Act For A.Y. 2008-09 Accepting The Share Capital/Share Premium.

For Appellant: Shri U.N Marwah, CAFor Respondent: Shri Waseem Arshad, CIT(DR)
Section 68

Copy of Audited financial statements of all investor • Copy of the assessment order accepting the security premium received by the investor being source of source of the capital contribution received by the appellant 9.3 The appellant has further contended that no addition can be made under section ... would be required to explain the source of credit in the books of accounts but not the source of the source i.e. source of the creditor. 9.9 It has been further observed that the genuineness of the transactions has been proved and the appellant has duly