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

Savitri Realbuild Pvt. Ltd., Kolkata vs. ITO, Ward - 2(4), Kolkata

Appeal is allowed for statistical purposes in above terms

ITA 2472/KOL/2018[2012-13]Status: DisposedITAT Kolkata13 Sept 2019AY 2012-13

Bench: Shri S.S.Godara & Dr. A.L. Sainiassessment Year :2012-13 Savitri Realbuild Pvt. Ltd. V/S. Income Tax Officer, C/O S.S. Lohai & Co. 27, Ward-2(4), P-7, Brabourne Road, Room Chowringhee Square, No.711, 7Th Floor, Kolkata-69 Kolkat-700 001 [Pan No.Aaqcs 5786 G] .. अपीलाथ" /Appellant ""यथ"/Respondent Shri Brijesh Kr. Singh, Advocate अपीलाथ" क" ओर से/By Appellant Shri C.J. Singh, Jcit, Sr-Dr ""यथ" क" ओर से/By Respondent 05-09-2019 सुनवाई क" तार"ख/Date Of Hearing 13-09-2019 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per S.S.Godara:- This Assessee’S Appeal For Assessment Year 2012-13 Arises Against The Commissioner Of Income Tax (Appeals)-1, Kolkata’S Order Dated 04.09.2018 Passed In Case No.469/Cit(A)-1/Ward-2(4)/2017-18, Involving Proceedings U/S 143(3) Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Parties. Case File Perused. 2. The Assessee’S Sole Substantive Ground Raised In The Instant Appeal Challenges Correctness Of Both The Lower Authorities’ Action Treating Its Share Application Money Raised From Investor Parties As Unexplained Cash Credits U/S 68 Of The Act. Both The Learned Representatives Invite Our Attention To The Assessing Officer’S Assessment Order Dated 13.03.2015 & More Particularly The Last Page Thereof That Neither The Assessee Had Complied With The Summons Issued During The Course Of Scrutiny Nor Has It Filed On Record Any Details For The Purpose Of Factual

Section 143(3)Section 68

S.A.Enterprises, Mumbai vs. Pr. CIT - 32, Mumbai

In the result, the appeal of the assessee is hereby ordered to be allowed

ITA 2419/MUM/2019[2009-10]Status: DisposedITAT Mumbai13 Sept 2019AY 2009-10

Bench: Shri Rajesh Kumar, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.2419/Mum/2019 (ननधधारण वर्ा / Assessment Years: 2009-10) बनधम/ M/S. S. A. Enterprises Pr. Cit-32 Mumbai Bunglow No.70/74, Vs. Sheyas Goral Link Road, Near Gorai Bridge Bus Stop, Borivali (W), Mumbai-400092. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Abafs8654B (अपीलाथी /Appellant) (प्रत्यथी / Respondent) .. Assessee By: Shri Rajiv Khandelwal Revenue By: Shri Laxmi Vara Prasad Gude (Dr) सुनवाई की तारीख / Date Of Hearing: 16/07/2019 घोषणा की तारीख /Date Of Pronouncement: 13/09/2019 आदेश / O R D E R Per Amarjit Singh, Jm: The Assessee Has Filed The Present Appeal Against The Order Dated 27.03.2019 Passed By The Principal Commissioner Of Income Tax-32, Mumbai [Hereinafter Referred To As The “Pcit”] Relevant To The A.Y.2009-10 In Which The Principal Commissioner Of Income Tax-32 Has Invoked The Provisions U/S 263 Of The I.T. Act, 1961. 2. The Assessee Has Raised The Following Grounds Of Appeal: - “The Ground Or Grounds Of Appeal Are Without Prejudice To One Another. 1. On The Facts & In The Circumstances Of The Case & In Law, The Id. Pr. Cit-32, Mumbai Erred In Holding That The Assessment Order Dated 22-12- 2016 Passed U/S.143(3) R.W.S. 147 By The Asst. Cit, 32(3), Mumbai Is Erroneous In So Far As It Is Prejudicial To The Interest Of The Revenue By Invoking The Provisions Of Section 263 Because In His Opinion, The Additions Of Rs.1,05,16,040/- & Rs.3,15,482/- Are Made U/S.68 & 69C Respectively Ought To Have Not Been Set Off Against The Loss Incurred During The Year & Thereby Further Erred In Setting Aside The Assessment Order & Directing The Ao To Complete The Assessment Accordingly

For Appellant: Shri Rajiv KhandelwalFor Respondent: Shri Laxmi Vara Prasad Gude
Section 143(3)Section 263Section 68