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

Rajesh Gupta HUF, Delhi vs. ACIT Circle 28(1), Delhi

In the result, the appeal of the assessee is partly allowed

ITA 8240/DEL/2025[2016-17]Status: DisposedITAT Delhi25 Sept 2026AY 2016-17

Bench: Shri Vimal Kumar & Shri Manish Agarwalrajesh Gupta Huf, Acit, House No.41, Street No.3, Circle-28(1), Shanti Niketan, Moti Bagh, Vs. New Delhi. New Delhi-110021. Pan-Aaghr4685G (Appellant) (Respondent) Assessee By Shri Sanjeev Kapur, Ca Department By Ms. Harpreet Kaur Hansara, Sr. Dr Date Of Hearing 22/07/2026 Date Of Pronouncement 25/09/2026 O R D E R Per Manish Agarwal, Am: This Appeal Is Filed By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [‘Cit(A)’ In Short] In Appeal No. Cit(A), Delhi-10/10131/2018-19 Dated 08.10.2025 Passed U/S 250 Of The Income Tax Act, 1961 (The Act, In Short) Arising Out Of The Assessment Order Dated 30.05.2016 Passed U/S 143(3) Of The Act For Assessment Year 2016-17. 2. Briefly Stated The Facts Are That Assessee Had E-Filed Its Return Of Income On 30.05.2016 Declaring Total Income Of Rs.18,91,590/- & The Same Was Processed U/S 143(1) Of The Act. The Case Was Selected For Scrutiny Under Cass For The Reason ‘Whether The Investment & Income Relating To Securities Transactions Are Duly Disclosed’ & Notice U/S 143(2) Was Issued On 03.07.2017. Thereafter, Various Rajesh Gupta Huf Vs. Acit Notices Issued Along With Questionnaires Were Issued From Time To Time Which Were Duly Replied To By The Assessee. The Ao Concluded That The During The Year Under Appeal, The Assessee Has Declared Long Term Capital Gain (Ltcg) Of Rs.22,71,624/- From The Sale Of Shares Of M/S Kalpa Commercial Ltd. & Of Rs.3,22,63,565/- From The Sale Of Shares Of M/S Eins Edutech Limited Which Were Held As Bogus And, Accordingly, Addition Of Rs.3,66,98,115/- Was Made U/S 68 Of The Act Which Was The Total Sale Consideration Received From The Sale Of Both The Scripts.

Section 143(1)Section 143(2)Section 143(3)Section 250Section 68