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. Sunridges Sporting Goods Pvt. Ltd., Meerut vs. ACIT, Meerut

The appeal is allowed for statistical purposes

ITA 1182/DEL/2015[2008-09]Status: DisposedITAT Delhi10 Mar 2016AY 2008-09

Bench: Shri I.C. Sudhir & Shri Prashant Maharishi Assessment Year: 2008-09 Sunridges Sporting Goods Pvt. Ltd., Vs. Acit, B-9, Sports Complex, Circle-2, Delhi Road, Meerut. Meerut. (Pan: Alkcs4748L) (Appellant) (Respondent) Assessee By: Shri R.K. Garg, Adv. Department By: Shri Bharat Bhushan Garg, Sr. Dr Date Of Hearing : 18 .12.2015 Date Of Pronouncement: 10:03.2016 Order Per I.C. Sudhir:The Assessee Has Questioned First Appellate Order On The Sole Ground That The Learned Cit(Appeals) Erred In Sustaining The Addition Of Rs.4,42,242 As Unexplained Credit Under Sec. 68 Of The Income-Tax Act, 1961. 2. Heard & Considered The Arguments Advanced By The Parties In View Of Orders Of The Authorities Below, Material Available On Record & The Decisions Relied Upon. 3. The Facts In Brief Are That Assessing Officer Had Made Addition Of Rs.1,86,72,234 Under Sec. 68 Of The Act On The Basis That The Creditors Had 2 Not Confirmed The Account Of The Assessee. It Was Questioned Before The Learned Cit(Appeals). The Learned Cit(Appeals) Being Satisfied With The Explanation Of The Assessee Has Restricted The Addition To Rs.4,42,242 On The Basis That The Explanation Of The Assessee With Respect To Transaction With Valm Foam (P) Ltd. (Difference Of Rs.3 Lacs), M/S. Jasch Industries (Difference Of Rs.1 Lac) & M/S. Hiren Sinha & Co. (Difference Of Rs.42,242) Was Not Supported With Positive Evidence. This Action Of The Learned Cit(Appeals) Has Been Questioned By The Assessee .

For Appellant: Shri R.K. Garg, AdvFor Respondent: Shri Bharat Bhushan Garg, Sr. DR
Section 68