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 Blooms Realators & Hospitality Pvt. Ltd., Lucknow vs. Income Tax Officer-1(4), Lucknow

ITA 586/LKW/2015[2010-11]Status: DisposedITAT Lucknow26 Nov 2025AY 2010-11

Bench: Sh. Kul Bharat & Sh. Nikhil Choudharya.Y. 2010-11 M/S Blooms Realators & Hospitality Vs. Income Tax Officer, Pvt. Ltd, B-1/66, Vivek Khand, 1-(4), Lucknow Gomti Nagar, Lucknow Pan: Aadcb6111H (Appellant) (Respondent) Assessee By: Sh. Rakesh Garg, Advocate Revenue By: Sh. R.K. Agarwal, Cit Dr Date Of Hearing: 28.08.2025 Date Of Pronouncement: 26.11.2025 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Assessee Against The Orders Of The Ld. Cit(A)- Lucknow Dated 30.03.2015, Wherein The Ld. Cit(A) Has Dismissed The Appeal Of The Assessee Against The Orders Of The Assessing Officer Under Section 143(3) For The A.Y. 2010-11 Passed On 30.03.2013. The Grounds Of Appeal Are As Under: - “1. Because The Findings Recorded By The Learned Commissioner Of Income Tax (Appeals) That The Asasesse Has Failed To Discharge The Onus To Establish The Identity, Credit Worthiness Of Share Holder Company & Genuineness Of The Transaction Are Wholly Perverse Finding. 2. Because The Assessee During The Assessment Proceeding As Well As Before The Commissioner Of Income Tax (Appeals) Has Filed The Documents Share Application Form, Certificate Of Incorporation, Acknowledgement Of Itr, Bank Statements & Copies Of Pan Card Of Share Holders Company. These Documents Are Sufficient To Establish The Identity, Credit Worthiness & Genuineness Of The Transaction. 3. Because It Is Well Settled Law That A Person, Making Investment In Share Capital Is Best Judge Regarding His Investment. The 9 Share Holder Companies On Their Own Have Made Investment In The Appellant Company. The Wrong Decision Of The Investor Cannot Be A Basis For Making Addition U/S 68 Of The Income Tax Act.

For Appellant: Sh. Rakesh Garg, AdvocateFor Respondent: Sh. R.K. Agarwal, CIT DR
Section 143(3)Section 68