Section 68

Tax Treatment of Cash Credit U/s. 68, 69, 69A, 69B, 69C and 69D

Income Tax - This Article discusses Tax Treatment of Cash Credit, Unexplained investments, Unexplained money, Amount of investments not fully disclosed in books of account, Unexplained expenditure and Amount borrowed or repaid on hundi in cash under section 68,Section 69, Section 69A, Section 69B, Section 69C and Section 69D respectively of Income Tax...

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Bogus Share Premium/Share Capital – Responsibility of Assessee to Prove with Cognet Evidence

Income Tax - Merely because assessee company had filed all primary evidence, it could not be said that onus on assessee to establish credit worthiness of investor companies stood discharged u/s 68 of the Income Tax Act, 1961....

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Private Placement – of Shares or Unaccounted Money ???

Income Tax - Recent Judgement of Hon’ble Supreme Court in case of NRA Iron and Steel Pvt Ltd.- After this judgement, the authorities would get right to question the integrity of every issue or reissue of share capital, especially those by company in which public are not substantially interested because these companies generally issue shares on priva...

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Assessee Company failed to prove genuineness of investor section 68 gets attracted: SC

Income Tax - Assessee company failed to prove genuineness of investor – provisions of section 68 of the Income-tax Act attracted – Supreme Court The Apex court in the case of NRA Iron and Steel Pvt Ltd (SLP 29855 of 2018) held that the assessee company is under a legal obligation to prove the source of receipt of […]...

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Summary of Hon’ble Supreme Court ruling on Section 68 of Income Tax, 1961

Income Tax - Recently two judges’ bench of Hon’ble Supreme Court in the case of NRA Iron & Steel Pvt. Ltd. vs. Principal Commissioner of Income Tax (Central) – 1 (SLP (Civil) No. 29855 of 2018), by its judgment dated 5th March, 2019 restored the order of Assessing Officer by confirming the addition to the taxable income made under Section...

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LTCG on sale of shares cannot be treated bogus merely on investigation report

Mr. Sanjiv Shroff Vs ACIT (ITAT Kolkata) - When AO has not brought any material on record to show that the assessee has paid over and above the purchase consideration as claimed and evident from the bank account then, in the absence of any evidence it cannot be held that the assessee has introduced his own unaccounted money by way of bogus l...

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Sec. 68 addition cannot be made merely for exorbitant premium

Principal Commissioner of Income Tax Vs M/s. Chain House International (P) Ltd.) (Madhya Pradesh HC) - Addition under section 68 on account of bogus share capital and exorbitant premium was not justified as where the funds had been received through banking channel  and there was no dispute about the identity, creditworthiness and genuineness of the investors. ...

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Sec. 68 addition unjustified when assessee explains both nature & source of share capital

M/s Baba Bhootnath Trade & Commerce Ltd. Vs ITO (ITAT Kolkata) - Since assessee had explained both the nature & source of share capital received with premium and also submitted PAN details, bank account statements, audited financial statements and Income Tax acknowledgments to prove the identity, creditworthiness and genuineness of the share applicants, therefore...

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No limitation on amount of premium that can be charged on Share Capital: SC

PCIT Vs Chain House International (P) Ltd (Supreme Court) - PCIT Vs Chain House International (P) Ltd (Supreme Court of India) In this case Supreme Court upheld the Judgment of Madhya Pradesh High Court. Madhya Pradesh High Court held that The question raised by the revenue in regard to issuing the share at a premium is purely a question of fact. It is a pre...

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S. 68 Cash Receipt from Debtors: Addition justified on failure to prove

ITO Vs Sanjeev Kejriwal (ITAT Kolkata) - Addition under section 68 on aacount of entire credits shown by assessee in form of realization from debtors was justified as the onus was primary on assessee to prove that the said cash was sourced by realization from debtors, which had not been proved by assessee except making an oral statement an...

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SOP to apply provisions of section 68 of Income tax Act, 1961

246/151/2017-A&PAC-1 - (10/01/2018) - Assessing Officers should follow the sequence as noted below for applying provisions of section 68 of the Act: Step 1: Whether there is credit of a sum during the year in the books of accounts maintained by the taxpayer. Step 2: If yes, the assessee should be asked to explain the nature and source o...

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Recent Posts in "Section 68"

LTCG on sale of shares cannot be treated bogus merely on investigation report

Mr. Sanjiv Shroff Vs ACIT (ITAT Kolkata)

When AO has not brought any material on record to show that the assessee has paid over and above the purchase consideration as claimed and evident from the bank account then, in the absence of any evidence it cannot be held that the assessee has introduced his own unaccounted money by way of bogus long term capital gain....

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Sec. 68 addition cannot be made merely for exorbitant premium

Principal Commissioner of Income Tax Vs M/s. Chain House International (P) Ltd.) (Madhya Pradesh HC)

Addition under section 68 on account of bogus share capital and exorbitant premium was not justified as where the funds had been received through banking channel  and there was no dispute about the identity, creditworthiness and genuineness of the investors. ...

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Tax Treatment of Cash Credit U/s. 68, 69, 69A, 69B, 69C and 69D

This Article discusses Tax Treatment of Cash Credit, Unexplained investments, Unexplained money, Amount of investments not fully disclosed in books of account, Unexplained expenditure and Amount borrowed or repaid on hundi in cash under section 68,Section 69, Section 69A, Section 69B, Section 69C and Section 69D respectively of Income Tax...

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Sec. 68 addition unjustified when assessee explains both nature & source of share capital

M/s Baba Bhootnath Trade & Commerce Ltd. Vs ITO (ITAT Kolkata)

Since assessee had explained both the nature & source of share capital received with premium and also submitted PAN details, bank account statements, audited financial statements and Income Tax acknowledgments to prove the identity, creditworthiness and genuineness of the share applicants, therefore, addition under section 68 was unjustif...

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No limitation on amount of premium that can be charged on Share Capital: SC

PCIT Vs Chain House International (P) Ltd (Supreme Court)

PCIT Vs Chain House International (P) Ltd (Supreme Court of India) In this case Supreme Court upheld the Judgment of Madhya Pradesh High Court. Madhya Pradesh High Court held that The question raised by the revenue in regard to issuing the share at a premium is purely a question of fact. It is a prerogative […]...

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S. 68 Cash Receipt from Debtors: Addition justified on failure to prove

ITO Vs Sanjeev Kejriwal (ITAT Kolkata)

Addition under section 68 on aacount of entire credits shown by assessee in form of realization from debtors was justified as the onus was primary on assessee to prove that the said cash was sourced by realization from debtors, which had not been proved by assessee except making an oral statement and taking credence from the entries passe...

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Addition u/s 68 cannot be made merely because investment was considerably large

PCIT Vs Aditya Birla Telecom Ltd (Bombay High Court)

Merely because the investment was considerably large and as noted, several corporate structures were either created or came into play in routing the investment in the assessee through P5AHIML would not be sufficient to brand the transaction as colourable device....

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Capital Gain cannot be treated as bogus on human probabilities, suspicion, conjectures and surmises

Mahavir Jhanwar Vs ITO (ITAT Kolkata)

CIT(A) has in his order relied upon circumstantial evidence and human probabilities to uphold the findings of the AO. He also relied on the so called rules of suspicious transaction...

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Bogus share capital: Relief cannot be given merely on basis of Ration Card, Voter ID etc

ITO Vs M/s. Yadu Steels & Power Pvt.Ltd. (ITAT Delhi)

ITO Vs M/s Yadu Steels & Power Pvt.Ltd. (ITAT Delhi) Under Section 68 onus is upon assessee to prove three ingredients, i.e., identity and creditworthiness of credit entries. As to how onus can be discharged would depend on facts and circumstances of each case. It is expected of both sides – assessee and Ld.AO, to […]...

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Huge Investment with no Income Source: ITAT upheld Addition

ITO (Exemptions) Vs M/s. Synergy Finlease Pvt. Ltd. (ITAT Delhi)

In present case there are evidences and material to show that the shareholder company was only a paper company having no source of income, but had made substantial and huge investment in the form of share application money....

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