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

Amol Prataprao Chavan, Sangli vs. ITO, Ward 2, Sangli

In the result, appeal of the assessee is allowed for statistical purposes

ITA 1679/PUN/2024[2017-18]Status: DisposedITAT Pune28 Nov 2024AY 2017-18

Bench: Dr.Dipak P. Ripote & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1679/Pun/2024 िनधा"रण वष" / Assessment Year: 2017-18 Amol Prataprao Chavan, V The Income Tax Officer, Patil Chowk, Daphalapur Jath, S Ward-2, Sangli. Sangli – 416402. Pan: Amypc0887B Appellant/ Assessee Respondent / Revenue Assessee By None. Revenue By Shri Manoj Tripathi – Dr Date Of Hearing 27/11/2024 Date Of Pronouncement 28/11/2024 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By The Assessee Against The Order Of Ld.Commissioner Of Income Tax(Appeals)[Nfac] For Assessment Year 2017-18 Dated 28.03.2024 Passed U/Sec.250 Of The Income Tax Act, 1961. The Assessee Has Raised The Following Grounds Of Appeal : “1) Ground No.1 On The Facts & Circumstances Of The Case & In Law, The Ld.Ao Erred In Making Addition To Total Income Of Rs.16,54,000/- U/S 68 Without Considering Facts & Circumstances Of The Case. 1.1) The Assessee Amol Prataprao Chavan Is An Individual Was Engaged In The Business As " Business Correspondent Agent " He Was Appointed To Facilitate Bank Customers On Behalf Of Bank. He Was Authorised To Accept Cash On Behalf Of Bank As Well As He Was Also Authorised To Give Withdrawals To Customers Of Bank. For Doing This Activity Bank Has Allotted Him Separate Bank Account. His Bank Account Having Account No. 60255628482 Of Bank Of Maharashtra Was That Special Purpose Bank Account . Learned Ao Considered Entire Deposit Of Rs. 16,54,000/- In That Bank Account As Unexplained Cash Credit U/S 68 .

Section 144Section 234ASection 250Section 271ASection 68

DCIT, CC-2(2), Kolkata vs. Arya Realty Developers Private Limited, Kolkata

In the result, the appeal of the revenue is dismissed

ITA 1918/KOL/2024[2015-16]Status: DisposedITAT Kolkata28 Nov 2024AY 2015-16

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.1918/Kol/2024 Assessment Year: 2015-16 Dcit, Cc-2(2), Kolkata…….…..………………........………………....Appellant Vs. Arya Realty Developers Pvt. Ltd.…............................…..…..... Respondent P-95, Lake View Road, Kolkata – 700029. [Pan: Aaica1390C] Appearances By: Shri Abhijit Adhikari, Jcit, Sr. Dr, Appeared On Behalf Of The Assessee. Shri S. M. Surana, Advocate & Sunil Surana, Ca, Appeared On Behalf Of The Revenue. Date Of Concluding The Hearing : November 27, 2024 Date Of Pronouncing The Order : November 28, 2024 आदेश / Order Per Sonjoy Sarma: The Present Appeal Has Been Preferred By The Revenue Against The Order Dated 05.06.2024 Of The Commissioner Of Income Tax (Appeals)- 26, Kolkata [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. At The Outset, The Ld. Dr Raised Issue Of A Delay Of 35 Days In Filing The Instant Appeal. The Revenue Has Submitted An Application For Condonation Of Delay Citing Valid Reasons. After Hearing The Submissions, The Delay Is Condoned & The Appeal Is Admitted For Hearing. 3. Brief Facts Of The Case Are That The Assessee Declared Business Income Of Rs.3,81,39,040/-. The Assessing Officer Treated This Income As Unexplained Cash Credit U/S 68 Of The Act & Accordingly Re- Classified It Under The Head ‘Income From Other Sources’ By Applying Section 115Bbe Of The Act.

Section 115BSection 250Section 68