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. Pashupati Textiles & Prints Pvt. Ltd., Meerut vs. ACIT, Meerut

In the result, the appeal of the assessee is allowed

ITA 5797/DEL/2016[2010-11]Status: DisposedITAT Delhi20 Apr 2017AY 2010-11

Bench: Shri B.P. Jainassessment Years 2010-11 Vs. Acit, Circle-2, Pashupati Textiles & Prints Pvt. Ltd., Aleem Market, Meerut. Khandak Bazar, Meerut. Pan: Aabcp 0275C (Appellant) (Respondent) Assessee(S) By : S/Shri K. Sampat & V.Raja Kumar, Adv. Revenue By : Ms. Bedobani Chaudhuri, Sr.D.R. सुनवाई क" तार"ख/Date Of Hearing : 18/04/2017 घोषणा क" तार"ख /Date Of Pronouncement: 20/04/2017 Order This Appeal Of The Assessee Arises From The Order Of Learned Cit(A), Meerut, Vide Order Dated 02.09.2016 For The Assessment Year 2010-11. 2. The Assessee Has Raised The Following Grounds Of Appeal. “The Cit(A) Has Erred In Summarily Rejecting The Plea Of The Appellant Company With Respect To Following A) That The Learned Assessing Officer Has Erred In Making Addition U/S.68 Of The Income Tax Act, 1961. B) That Identity, Creditworthiness & Genuineness Of The Transactions Have Been Proved Beyond Doubt. C) That The Several Observations As Made & Inferences Drawn Are Untenable, Incorrect, Unwarranted.” 3. The Brief Facts Of The Case As Are Emanating From The Order Of The Ao Are Reproduced Hereinbelow: “3. The Assessee Was Required To Produce The Directors Of The Two Companies, Namely, Mls Hum Tum Marketing Pvt. Ltd. & Mls Victory Software Pvt. Ltd., From Whom It Had Made Transactions, For Statements Vide Order Sheet Entry Dated 08.10.2014. The Assessee Has Filed Copy Of Account Of Both The Companies, But He Failed To Produce Them For Statement. The Assessee Has Also Filed Copy Of Bank Transaction & Copy Of Itr-V For A. Y 2010-11 Of Both The Parties. After Careful Observation Of These Documents, In The Case Of M/S. Hum Tum Marketing Pvt. Ltd, Return Income For A.Y 2010-11 Was Nil & In 2

For Respondent: Ms. Bedobani Chaudhuri
Section 131Section 153CSection 68

J.C.I.T RG - 3, Asansol vs. M/S Pawan Hardcoke Industries, Burdwan

In the result, appeal filed by the Revenue on ground No

ITA 406/KOL/2013[2008-09]Status: DisposedITAT Kolkata19 Apr 2017AY 2008-09

Bench: Shri N.V.Vasudevan, Jm & Dr. A.L.Saini, Am आयकर अपील सं./Ita No.406/Kol/2013 ("नधा"रण वष" / Assessment Year : 2008-09) Jcit, Range-3, Asansol Vs. M/S Pawan Hardcoke Parmar Building, 54, Industries, G.T.Road (West), Asansol- Bhukania House, Pera Galli, 713304 Kachari Road, Barakar, Burdwan "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aadfp 4056 E .. (अपीलाथ" /Appellant) (""यथ" / Respondent) राज"व क" ओर से /Revenue By : Shri Rajat Kumar Kureel, Jcit-Dr "नधा"रती क" ओर से /Assessee By : Shri T.P.Roy, Advocate सुनवाई क" तार"ख / Date Of Hearing : 03/04/2017 घोषणा क" तार"ख/Date Of Pronouncement 19/04/2017 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Appeal Filed By The Revenue, Is Directed Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals), Durgapur In Appeal No.108/Cit(A)/Asl/Cir-2/Asl/2010-11,Which In Turn Arises Out Of An Order Passed By The Assessing Officer U/S.144 Of The Income Tax Act 1961, (Hereinafter Referred To As The ‘Act’), Dated 25.10.2010. 2. Brief Facts Of The Case Qua The Assessee Are That The Assessee Is A Partnership Firm Engaged In The Business Of Manufacturing Of Coke Both Hardcoke & Soft Coke. The Assessee Is Doing Business In The Name Of M/S Pawan Hardcoke Industries, Which Is A Partnership Firm Consisting Of Two Partners. The Return Of Income Of The Assessee Was Processed U/S.143(1) Of The Act. Later On, Assessee’S Case Was Selected For Scrutiny U/S.143(3) Of The Act & The Ao Completed The Assessment By Making Addition On Account Of Unexplained Cash Credit U/S.68 Of The Act. The Assessing Officer Also Disallowed The Transportation Charges At Rs.12,85,223/- & Disallowed Some Expenditure Under Different Heads.

For Appellant: Shri T.P.Roy, AdvocateFor Respondent: Shri Rajat Kumar Kureel, JCIT-DR
Section 133(6)Section 143(1)Section 143(3)Section 144Section 68