Section 68 of the Income Tax Act

Income-tax Act, 2025: s.102

Section 68 of the Income-tax Act, 1961 corresponds to section 102 (Unexplained credits) of the Income-tax Act, 2025.

Read section 102 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 68 is Pr. CIT v. Abhisar Buildwell (P.) Ltd. (149 Taxmann.com 399), cited in 2,379 of the 29,931 judgments on BharatTax that turn on this section.

Leading authorities on Section 68

Pr. CIT v. Abhisar Buildwell (P.) Ltd.
149 Taxmann.com 399 · 2023 · Supreme Court
2,379
citing judgments

An assessment under section 153A is without jurisdiction if there is an absence of incriminating material for an unabated assessment year.

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. Continental Warehousing Corporation (Nhava Sheva) Ltd.
374 ITR 645 · 2015 · High Court
1,823
citing judgments

In Section 153A proceedings, the scope of assessment extends to abated proceedings, enabling an assessee to raise fresh legal claims that could have been made in regular assessment proceedings.

CIT v. Kelvinator of India Ltd.
320 ITR 561 · 2010 · Supreme Court
1,673
citing judgments

An Assessing Officer cannot initiate reassessment proceedings under Section 147 of the Income Tax Act based on a mere change of opinion. Reassessment is permissible only when there is fresh tangible material leading to the belief of income escapement, not merely a review of existing facts.

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.

GKN Driveshafts (India) Ltd. v. ITO
259 ITR 19 · 2003 · Supreme Court
1,349
citing judgments

When a notice under Section 148 of the Income Tax Act is issued, the Assessing Officer is bound to furnish reasons for reopening upon the assessee's request and must dispose of the assessee's objections to the notice by passing a speaking order.

Dhakeshwari Cotton Mills Ltd. v. CIT
26 ITR 775 · 1954 · Supreme Court
1,061
citing judgments

Corroborative evidence is essential to support evidence found on third-party premises, and an assessment cannot be based on suspicion, surmises, or conjecture.

ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd.
291 ITR 500 · 2007 · Supreme Court
1,030
citing judgments

For initiating reassessment proceedings under Section 147, the Assessing Officer needs only prima facie material providing a reason to believe that income has escaped assessment. Conclusive proof or the sufficiency/correctness of the material is not required at the stage of issuing the notice under Section 148.

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.

Raymond Woollen Mills Ltd. v. ITO
236 ITR 34 · 1999 · Supreme Court
862
citing judgments

For reassessment proceedings under Section 148, the Assessing Officer only needs prima facie material to have a reason to believe income has escaped assessment. Conclusive proof or evaluation of the sufficiency and correctness of such material is not required at the stage of issuing the notice.

Judgments on Section 68

Mantram Commodities Pvt. Ltd., Faridabad vs. ITO Ward 1(5), Faridabad

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

ITA 6170/DEL/2019[2015-16]Status: DisposedITAT Delhi12 Feb 2021AY 2015-16

Bench: Shri R.K. Pandaassessment Year: 2015-16 Mantram Commodities Pvt. Ltd., Vs Ito, Ff-9, Vishnu Place, Ward 1(5), Near Neelam Flyover, Faridabad. Sector-20B, Faridabad. Pan: Aahcm9517C (Appellant) (Respondent) Assessee By : Shri Rajiv Saxena, Advocate Revenue By : Shri Rovin Rawal, Addl.Cit Date Of Hearing : 21.01.2021 Date Of Pronouncement : 12.02.2021 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Orders Dated 29Th March, 2019 Of The Cit(A), Faridabad, Relating To Assessment Year 2015-16. 2. Facts Of The Case, In Brief, Are That The Assessee Is A Private Limited Company & Has Not Conducted Any Business Activity During The Relevant Assessment Year. It Filed Its Return Of Income On 10Th September, 2015 Declaring The Total Income At Rs.1,64,750/-. The Ao, During The Course Of Assessment Proceedings, Noted That The Assessee Company Has Received Rs.42 Lakhs As Share Premium During The Year On Issue Of 60000 Shares At A Premium Of Rs.70/-. He Noticed That The Shares Have Been Allotted On 31St March, 2015 To The Following Companies/Persons:- Name Of Person, No. Of Nominal Premium Amount Of Total Amt. Paid Shares Value Per Per Premium(Rs.) Including Share(Rs.) Share(Rs.) Premium(Rs.) Gangashiv 33125 10 70 2318750 2650000 Contractors Pvt. Ltd. 26875 10 70 1881250 2150000 Amar Shree Industries Pvt. Ltd. Total 60000 4200000 4800000

For Appellant: Shri Rajiv Saxena, AdvocateFor Respondent: Shri Rovin Rawal, Addl.CIT
Section 11USection 133(6)Section 143(3)Section 56(2)(viib)Section 68

Sandi.S.Kamdar L/H Shanthilal Jayanthilal Kamdar, Chennai vs. ITO Corporate Ward-9(3), Chennai

In the result, the appeal filed by the assessee is allowed for statistical purposes and the stay petition is dismissed

ITA 487/CHNY/2020[2014-15]Status: DisposedITAT Chennai11 Feb 2021AY 2014-15

Bench: Shri Duvvuru Rl Reddy & Shri G. Manjunathaआयकर अपील सं./I.T.A. No. 487/Chny/2020 िनधा"रण वष"/Assessment Year: 2014-15 & S.P. No. 123/Chny/2020 [In I.T.A. No. 487/Chny/2020 Sandip S. Kamdar, The Income Tax Officer, Legal Heir Of Shantilal Jayantilal Vs. Non Corporate Ward 9(3), Kamdar, B 42, Mangalram Apartments, Chennai 600 034. 825, Poonamallee High Road, Kilpauk, Chennai 600 010. [Pan:Apsps8383R] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri N. Vijay Kumar, C.A. ""थ" की ओर से/Respondent By : Ms. R. Anita, Jcit सुनवाई की तारीख/ Date Of Hearing : 11.01.2021 घोषणा की तारीख /Date Of Pronouncement : 11.02.2021 आदेश /O R D E R Per Duvvuru Rl Reddy: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 10, Chennai, Dated 22.11.2019 Relevant To The Assessment Year 2014-15. Besides Challenging The Confirmation Of Addition Of ₹.65,39,000/- Under Section 68 Of The Income Tax Act, 1961 [“Act” In Short] The Assessee Has Also Challenged The Ex-Parte Order Passed By The Ld. Cit(A) By Raising Specific Ground.

For Appellant: Shri N. Vijay Kumar, C.AFor Respondent: Ms. R. Anita, JCIT
Section 143(3)Section 68