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

Tara Hospitality Pvt Ltd, Office No A vs. Income Tax Officer 15(3)(1), Mumbai

In the result, the appeal of the assessee bearing ITA No

ITA 7445/MUM/2025[2018-19]Status: DisposedITAT Mumbai30 Jan 2026AY 2018-19

Bench: Shri Anikesh Banerjee & Shri Makarand Vasant Mahadeokartara Hospitality Private Vs Income Tax Officer 15(3)(1), Limited Mumbai Office No.A-112 Plot No.53, Room No.456 Aayakar Bhawan, Sector-15Cbd Belapur Navi M.K. Road, Mumbai-400020 Mumbai-400614 Pan:Aaect7774K Appellant Respondent Assessee By : Shri Satyaprakash Singh, Ca Respondent By : Shri Ritesh Misra (Cit Dr) Date Of Hearing : 28/01/2026 Date Of Pronouncement : 30/01/2026 O R D E R Per: Anikesh Banerjee (Jm): The Instant Appeal Of The Assessee Filed Against The Order Of The Nfac, Delhi (For Brevity ‘The Ld. Cit(A), Order Passed Under Section 250 Of The Income Tax Act 1961 (For Brevity ‘The Act’) For Assessment Year 2018-19, Date Of Order 19.09.2025. The Impugned Order Emanated From The Order Of The National Eassessment Centre, Delhi (For Brevity The “Ld. Ao”), Order Passed Under Section 144 R.W.S. 144B Of The Act Date Of Order 23.04.2021. 2 Tara Hospitality Pvt. Ltd. 2. We Heard The Rival Submission & Considered The Documents Available In The Record. The Assessee Company Filed The Return By Admitting Loss Amount Of Rs.6,85,303/-. The Assessment Proceeding Was Initiated. During The Assessment Ld. Ao Found In Column No.31(A) Of The Audit Report For Form No.3Cd That Assessee Has Taken Loan From Three Different Parties Amount Of Rs.1,45,75,891/-. But Finally The Assessment Order Was Passed Ex Parte & The Unsecured Loan Amount Of Rs.1,45,75,891/- Was Added Back As Unexplained Cash Credit U/Sec. 68 Of The Act. Aggrieved Assessee Filed An Appeal Before The Ld. Cit(A). The Ld. Cit(A) Passed An Order Ex Parte & Uphold The Impugned Assessment Order. Being Aggrieved Assessee Filed An Appeal Before Us.

For Appellant: Shri Satyaprakash Singh, CAFor Respondent: Shri Ritesh Misra (CIT DR)
Section 144Section 250Section 68