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

Spirit Global Constructions Private Limited, New Delhi vs. ACIT Central Circle-15, New Delhi

In the result, appeal of the assessee is allowed

ITA 3821/DEL/2024[2012-13]Status: DisposedITAT Delhi30 Sept 2025AY 2012-13

Bench: Shri Anubhav Sharma & Shri Manish Agarwal[Assessment Year : 2012-13] M/S. Spirit Global Vs Acit, Constructions Pvt.Ltd., Central Circle-15, Plot No.1, Lsc, Site No.37- Delhi 38, Morland, Kalkaji, New Delhi-110019. Pan-Aaics2757B Appellant Respondent Appellant By Shri Amitosh Moitra, Ca & Roli Chaubey, Ca Respondent By Shri Dheeraj Kumar Jaiswal, Sr.Dr Date Of Hearing 03.07.2025 Date Of Pronouncement 30.09.2025 Order Per Manish Agarwal, Am : The Captioned Appeal Is Filed By Assessee Against The Order Dated 24.06.2024 Passed By Ld. Commissioner Of Income Tax (A)- 26, New Delhi [“Ld.Cit(A)”] In Appeal No.10187/2019-20 U/S 250 Of The Income Tax Act, 1961 [“The Act”] Arising Out Of Assessment Order Dated 28.03.2014 Passed U/S 143(3) Of The Act Pertaining To Assessment Year 2012-13. 2. Brief Facts Of The Case Are That Assessee Is A Private Limited Company, Engaged In The Business Of Real Estate. The Return Of Income Was Filed On 27.09.2012, Declaring Loss Of Inr 2,91,85,777/-. The Assessment Was Completed U/S 143(3) In Terms Of Order Dated 28.03.2014 Passed U/S 143(3) Of The Act Wherein Income So Declared Was Accepted. Thereafter, Case Of The Assessee Was Re-Opened In Terms Of The Notice Issued U/S 148 Of The Act Dated 31.03.2019 & Subsequently, Re-Assessment Order Was Passed On 24.12.2019 By Making Addition Of Inr 3.50 Crores Received From M/S. Anamika Steel Traders Pvt. Ltd. Of Inr 1.75 Crores & M/S. Gajraj Steel Merchants Pvt.Ltd. Of Inr 1.75 Crores Each By Holding The Same As Unexplained Credits.

Section 143(3)Section 147Section 148Section 250