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

M/S. Swaransathi Vyapaar Pvt. Ltd., Kolkata vs. ITO, Ward - 5(1), Kolkata

In the result, appeal of the assessee is allowed in part

ITA 767/KOL/2018[2012-13]Status: DisposedITAT Kolkata09 Nov 2018AY 2012-13

Bench: Sri J. Sudhakar Reddy & Sri S.S. Viswanethra Ravi) Assessment Year: 2012-13 M/S. Swaransathi Vyapaar Pvt. Ltd...….……...........…………..……………….…...……..….…….......Appellant 51, Nalini Seth Road 4Th Floor Kolkata – 700 001 [Pan : Aaqcs 8852 D] Vs. Income Tax Officer, Ward-5(1), Kolkata.……........…………………………..………….…............Respondent Appearances By: Shri Soumitra Choudhury, Advocate & Joydeep Chakraborty, Advocate, Appeared On Behalf Of The Assessee. Shri C.J. Singh, Sr. D/R. Appearing On Behalf Of The Revenue. Date Of Concluding The Hearing : October 31Th, 2018 Date Of Pronouncing The Order : November 9Th , 2018 Order Per J. Sudhakar Reddy, Am :- This Appeal Filed By The Revenue Is Directed Against The Order Of The Learned Commissioner Of Income Tax (Appeals)-19, Kolkata, (Hereinafter The ‘Ld. Cit(A)’), Dt. 24/01/2018, Passed U/S 250 Of The Income Tax Act, 1961 (Hereinafter The ‘Act’), Relating To Assessment Year 2012-13. 3. The Assessee Is A Company & During The Previous Year It Has Raised Share Capital Amounting To Rs. 27,09,500/-. The Share Premium Was Worth Rs. 5,46,40,500/-. The Assessing Officer Made An Addition U/S 68 Of The Act, Of An Amount Of Rs.5,73,50,000/-. Aggrieved The Assessee Carried The Matter In Appeal. The Ld. First Appellate Authority Upheld The Order Of The Assessing Officer & Confirmed The Addition. Aggrieved The Assessee Is In Appeal Before Us. 4. We Have Heard Rival Contentions. On Careful Consideration Of The Facts & Circumstances Of The Case, Perusal Of The Papers On Record, Orders Of The Authorities Below As Well As Case Law Cited, We Hold As Follows:-

Section 131Section 142(1)Section 250Section 68