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

Om Prakash Dudani, Asansol vs. ITO, WD-2(4), Asansol

In the result, the appeal of the assessee is treated as allowed for statistical purpose

ITA 993/KOL/2019[2008-09]Status: DisposedITAT Kolkata19 Nov 2019AY 2008-09

Bench: Shri P.M. Jagtap(Kz)] I.T.A. No. 993/Kol/2019 Assessment Year: 2008-09 Shri Om Prakash Dudani.....................................…………………………..............................Appellant 24A, 3Rd Floor, Kamala Nagar, Delhi – 110 007 [Pan: Acxpd 3299 B] Vs Ito, Ward-2(4), Asansol...................…………………………………………………...............Respondent Parmar Building, G.T. Road, Asansol – 713 304. Appearances By: Shri R.N. Ram, Ar Appearing On Behalf Of The Assessee. Shri Jayanta Khanra, Jcit, Sr. Dr Appearing On Behalf Of The Revenue. Date Of Concluding The Hearing : November 19, 2019 Date Of Pronouncing The Order : November 19, 2019 Order This Appeal Filed By The Assessee Is Directed Against The Order Of Ld. Cit(A), Asansol Dated 12.12.2018 Whereby He Sustained Partly The Penalty Imposed By The Ao U/S 271(1)(C) Of The Income Tax Act, 1961. 2. The Assessee In The Present Case In An Individual Who Filed His Return Of Income For The Year Under Consideration On 25.08.2008 Declaring A Total Income Of Rs. 3,98,737/-. In The Assessment Completed U/S 143(3) Vide An Order Dated 16.12.2010, The Total Income Of The Assessee Was Determined By The Ao At Rs. 15,35,085/- After Making Inter Alia Addition Of Rs. 5,93,500/- U/S 40(A)(Ia) Of The Act For Non-Deduction Of Tax At Source From ‘Godown Rent’ & ‘Office Rent’ & Addition Of Rs. 4,83,837/- U/S 68 By Treating The Loans Received By The Assessee From His Friends & Relatives As Unexplained Cash Credit. On Confirmation Of The Said Two Additions By The Ld. Cit(A) In The Quantum Proceedings, Show Cause Notice U/S 271(1)(C) Was Issued By The Ao & Since The Explanation Offered By The 2 I.T.A. No. 993/Kol/2019 Assessment Year: 2008-09 Shri Om Prakash Dudani

Section 143(3)Section 271(1)Section 271(1)(c)Section 40Section 68