Section 68

Recent Judicial interpretation of Section 68 of Income Tax Act 1961

Income Tax - Let us examine two latest Judgements decided by The High Court of Judicature at Bombay dated 22nd January 2020 and 29th January 2020 involving facts where assessing officers invoked section 68 of the Income Tax Act 1961 while making additions to the returned income. What is section 68 of the Income Tax Act 1961 and […]...

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Taxation of Deposits Made With Banks in SBNs

Income Tax - The Income Tax Returns for the Assessment Year 2017-18 were selected for scrutiny via e-proceedings for those Assessees, who have deposited more than Rs. 2 Lakhs in cash in Banks after 8th November 2016, being the date on which Demonetization was announced by our honourable Prime Minister of India. Cash Books, Sales Invoices, Copies of [&...

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Assessment of Cash Deposits in OCM Cases

Income Tax - A large number of assessments pertaining to cash deposited in banks during demonetization period are pending. The article analysis relevant sections of I.T. Act as well as various legal issues to assist assessing officers in passing error free sustainable assessment orders....

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Judgments in Favour of Revenue in Penny Stock Cases

Income Tax - The provision for exemption of long term capital gains from shares requiring payment of securities transaction tax has been taken advantage by unscrupulous tax evaders. An organised tax evasion involving the brokers of stock exchanges, taxpayers and their consultants, entry operators and exist operators was in action for quite some time....

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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 purchases- Entire Purchase amount cannot be disallowed

The Principal Commissioner of Income Tax-25 Vs Pinaki D. Panani (Bombay High Court) - Pr. CIT Vs Pinaki D. Panani (Bombay High Court) Even if the purchases made from the parties in question are to be treated as bogus, it does not necessarily mean that entire amount should be disallowed and that no benefit should be given to the Respondent-Assessee. Assuming that the purchasers from w...

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Mere transaction through banking channel not sufficient to prove genuineness

Hillman Properties Pvt. Ltd. Vs ITO (ITAT Delhi) - Assesssee did not furnish PAN and Bank statements or any of the directors of investor companies merely showing that transactions were carried out through banking channel was not sufficient to prove genuineness of transaction in the matter. When investors having nil income had deposited cash in their...

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Section 68 addition-Separate maintenance of books by assessee and his proprietorship concern

PCIT Vs Ajay Jaysukhlal Mehta (Gujarat High Court) - PCIT Vs Ajay Jaysukhlal Mehta (Gujarat High Court) In a situation in which assessee and it’s proprietorship concern are maintaining separate books of accounts – as in the present case, an assessee may have his own capital of ‘x’ amount, and yet his capital contribution in capital account of ...

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Genuine Advances from customers cannot be treated as undisclosed income

Shri Sanjay Agarwal Vs ITO (ITAT Kotkata) - When assessee received advances from customers and the same were subsequently adjusted against goods sold to them, then, the advances could not be treated as unexplained cash credit under section 68, therefore, addition under section 68 made by AO on account of unexplained cash advances was deleted....

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Liability payable as a consequence of trading transaction cannot be added U/s. 68

ITO Vs Ashok Transport Co.(ITAT Jodhpur) - Since transaction between assessee and truck owners was a liability which assessee had to pay arising from trade transaction and same could not be added under section 68....

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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"

Recent Judicial interpretation of Section 68 of Income Tax Act 1961

Let us examine two latest Judgements decided by The High Court of Judicature at Bombay dated 22nd January 2020 and 29th January 2020 involving facts where assessing officers invoked section 68 of the Income Tax Act 1961 while making additions to the returned income. What is section 68 of the Income Tax Act 1961 and […]...

Read More
Posted Under: Income Tax |

Bogus purchases- Entire Purchase amount cannot be disallowed

The Principal Commissioner of Income Tax-25 Vs Pinaki D. Panani (Bombay High Court)

Pr. CIT Vs Pinaki D. Panani (Bombay High Court) Even if the purchases made from the parties in question are to be treated as bogus, it does not necessarily mean that entire amount should be disallowed and that no benefit should be given to the Respondent-Assessee. Assuming that the purchasers from whom the purchases were […]...

Read More

Mere transaction through banking channel not sufficient to prove genuineness

Hillman Properties Pvt. Ltd. Vs ITO (ITAT Delhi)

Assesssee did not furnish PAN and Bank statements or any of the directors of investor companies merely showing that transactions were carried out through banking channel was not sufficient to prove genuineness of transaction in the matter. When investors having nil income had deposited cash in their bank account immediately before giving ...

Read More

Section 68 addition-Separate maintenance of books by assessee and his proprietorship concern

PCIT Vs Ajay Jaysukhlal Mehta (Gujarat High Court)

PCIT Vs Ajay Jaysukhlal Mehta (Gujarat High Court) In a situation in which assessee and it’s proprietorship concern are maintaining separate books of accounts – as in the present case, an assessee may have his own capital of ‘x’ amount, and yet his capital contribution in capital account of a proprietorship concern can be more [&h...

Read More

Taxation of Deposits Made With Banks in SBNs

The Income Tax Returns for the Assessment Year 2017-18 were selected for scrutiny via e-proceedings for those Assessees, who have deposited more than Rs. 2 Lakhs in cash in Banks after 8th November 2016, being the date on which Demonetization was announced by our honourable Prime Minister of India. Cash Books, Sales Invoices, Copies of [&...

Read More
Posted Under: Income Tax |

Genuine Advances from customers cannot be treated as undisclosed income

Shri Sanjay Agarwal Vs ITO (ITAT Kotkata)

When assessee received advances from customers and the same were subsequently adjusted against goods sold to them, then, the advances could not be treated as unexplained cash credit under section 68, therefore, addition under section 68 made by AO on account of unexplained cash advances was deleted....

Read More

Liability payable as a consequence of trading transaction cannot be added U/s. 68

ITO Vs Ashok Transport Co.(ITAT Jodhpur)

Since transaction between assessee and truck owners was a liability which assessee had to pay arising from trade transaction and same could not be added under section 68....

Read More

Section 68 Addition cannot be made without proper enquiry by AO

DCIT Vs Senorita Enterprises Pvt. Ltd. (ITAT Delhi)

Addition under section 68 on account of high premium was unjustified as there was a clear lack of inquiry on the part of AO once assessee had furnished all the relevant material. ...

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Addition only for difference of GP on Normal & Bogus Purchase

Hemant M Mehta HUF Vs ACIT (ITAT Mumbai)

Hemant M Mehta HUF Vs A.C.I.T. (ITAT Mumbai) In case of bogus purchases where sales are accepted, the addition is required to be made only to the extent of difference between the GP declared by the assessee on normal purchases vis a vis bogus purchases. Respectfully following the order of the Hon’ble Jurisdictional High Court […]...

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Assessment of Cash Deposits in OCM Cases

A large number of assessments pertaining to cash deposited in banks during demonetization period are pending. The article analysis relevant sections of I.T. Act as well as various legal issues to assist assessing officers in passing error free sustainable assessment orders....

Read More
Posted Under: Income Tax |

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