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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Section 68: Provisions related to Cash Credits /Undisclosed Income

Income Tax - Section 68 incorporates only a rule of evidence, placing the onus of proof on the assessee. There have been hardly any amendments in this section since its introduction....

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Tax Treatment of Cash Credits U/s. 68 of Income Tax Act, 1961

Income Tax - Any sum found credited in the books of the taxpayer, for which he offers no explanation about the nature and source thereof or the tax authorities are not satisfied by the explanation offered by the taxpayer, is termed as cash credit. In this part you can gain knowledge about various provisions relating to tax treatment […]...

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Provisions of S. 68 of Income-tax Act, must be read with Negotiable Instruments Act, 1881, particularly when liability is acknowledged on realization of cheque

Income Tax - When on receipt of money by way of cheque a liability is acknowledged by receiver as loan or deposit or share capital, it need to be viewed considering ground realities faced by receiver of money against which he incur liability....

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Budget 2018 Rationalises provisions of section 115BBE

Income Tax - Sub-section (2) of said section provides that no deduction in respect of any expenditure or allowance or set-off of any loss shall be allowed to the assessee under any provision of the Act in computing his income referred to in clause (a) of sub-section (1)....

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Addition for Share premium U/s. 68 cannot be made merely on the ground that directors of share subscribers did not turn up before AO

Income Tax Officer Vs M/s. Wiz-Tech Solutions Pvt. Ltd. (ITAT Kolkata) - ITO Vs. Wiz-Tech Solutions Pvt. Ltd (ITAT Kolkata)  The main plank on which the AO made the addition was because the directors of the share subscribers did not turn up before him. In such a case the Hon’ble Apex Court in the case of Orissa Corpn. (P) Ltd. (supra) 159 ITR 78 and the Hon’...

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Addition U/s. 68 for Alleged unaccounted stock merely based on value of closing stock declared to banks is not sustainable

ACIT Vs Thatavarthi Ramesh Babu Kanuru (ITAT Visakhapatnam) - ACIT Vs Thatavarthi Ramesh Babu Kanuru (ITAT Visakhapatnam) It is no doubt true that the initial burden is upon the assessee to prove the correct value of the stock held by the assessee and he has to prove that the value reflected in the books of accounts is correct but the fact remains that the [&h...

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Creditworthiness of investor company cannot rejected merely for declaring low income

ACIT Vs TRN Energy (P) Ltd. & Vice-Versa (ITAT Delhi) - Treating the receipt of huge share application money by an investor-company as unexplained investment, merely due to the reason that low income was declared by such investor in its income-tax return, was not justified, since balance sheet of the investor produced by assessee had proved creditworthin...

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Onus on assessee to justify allottment of shares to outsiders at exorbitant premium

M/s. Pratik Syntex Private Ltd Vs. ITO (ITAT Mumbai) - M/s. Pratik Syntex Private Ltd Vs. ITO (ITAT Mumbai) In the instant appeal before us, the inspector was deputed by the AO to make field enquiries who could not locate these three shareholders and the assessee also could not furnish the current addresses of these three new shareholders. These in the ...

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Cash deposit cannot be assessed U/s. 68 when cheque deposits were accepted as business turnover

Income Tax Officer Vs Sri Shaik Zameer (ITAT Hyderabad) - This is an appeal by Revenue against the order of the Commissioner of Income Tax (Appeals)-Tirupati, dated 31-03-2017, treating the deposits made in the bank account as business turnover, whereas AO was of the opinion that these are unexplained income U/s. 68 of the Act....

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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"

Addition for Share premium U/s. 68 cannot be made merely on the ground that directors of share subscribers did not turn up before AO

Income Tax Officer Vs M/s. Wiz-Tech Solutions Pvt. Ltd. (ITAT Kolkata)

ITO Vs. Wiz-Tech Solutions Pvt. Ltd (ITAT Kolkata)  The main plank on which the AO made the addition was because the directors of the share subscribers did not turn up before him. In such a case the Hon’ble Apex Court in the case of Orissa Corpn. (P) Ltd. (supra) 159 ITR 78 and the Hon’ble […]...

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Addition U/s. 68 for Alleged unaccounted stock merely based on value of closing stock declared to banks is not sustainable

ACIT Vs Thatavarthi Ramesh Babu Kanuru (ITAT Visakhapatnam)

ACIT Vs Thatavarthi Ramesh Babu Kanuru (ITAT Visakhapatnam) It is no doubt true that the initial burden is upon the assessee to prove the correct value of the stock held by the assessee and he has to prove that the value reflected in the books of accounts is correct but the fact remains that the […]...

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Creditworthiness of investor company cannot rejected merely for declaring low income

ACIT Vs TRN Energy (P) Ltd. & Vice-Versa (ITAT Delhi)

Treating the receipt of huge share application money by an investor-company as unexplained investment, merely due to the reason that low income was declared by such investor in its income-tax return, was not justified, since balance sheet of the investor produced by assessee had proved creditworthiness, genuineness and identity of the inv...

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Onus on assessee to justify allottment of shares to outsiders at exorbitant premium

M/s. Pratik Syntex Private Ltd Vs. ITO (ITAT Mumbai)

M/s. Pratik Syntex Private Ltd Vs. ITO (ITAT Mumbai) In the instant appeal before us, the inspector was deputed by the AO to make field enquiries who could not locate these three shareholders and the assessee also could not furnish the current addresses of these three new shareholders. These in the instant case before us, […]...

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Cash deposit cannot be assessed U/s. 68 when cheque deposits were accepted as business turnover

Income Tax Officer Vs Sri Shaik Zameer (ITAT Hyderabad)

This is an appeal by Revenue against the order of the Commissioner of Income Tax (Appeals)-Tirupati, dated 31-03-2017, treating the deposits made in the bank account as business turnover, whereas AO was of the opinion that these are unexplained income U/s. 68 of the Act....

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No addition for Gift from daughter if Assessee proves identity, genuineness & creditworthiness

Padmalatha Tama Vs Income-tax Officer (ITAT Hyderabad)

Briefly the facts of the case are, assessee who derives income from house property and income from other sources, filed her return of income for the AY 2010-11 on 27/07/2010 declaring an income of Rs. 17,75,810/-. Subsequently, the case was selected for scrutiny under CASS and accordingly notice u/s 143(2) dated 25/08/2011 was issued and ...

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Addition justified for huge gifts on failure to prove genuineness

Kamlesh Parwani Vs Income-Tax Officer (ITAT Mumbai)

The captioned appeal by assessee for Assessment Year [AY] 2005-06 contest the order of Ld. Commissioner of Income-Tax (Appeals)-18 [CIT(A)], Mumbai, Appeal No.CIT(A)-18/T-62/ITO 19(3) (2)/10-11 dated 14/01/2013 qua confirmation of certain addition on account of cash credit u/s 68 for Rs.4 Lacs....

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AO not justified in treating share application money as unexplained without rebutting evidences filed by Assessee

Shakti Hardware Collection Pvt. Ltd Vs DCIT (ITAT Mumbai)

Where assessee having received share capital furnished evidences, i.e. addresses, PAN No., copies of returns and bank statements of subscribers, etc., AO was not justified in treating share application money as unexplained without rebutting such evidences....

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Initial burden on assessee to show that transactions in loose sheet were not in the nature of undisclosed investments

DCIT Vs Geneva Industries Ltd. (ITAT Bangalore)

Initial burden was on assessee to show that transactions in loose sheet were not in the nature of undisclosed investments. As assessee failed to discharge the same, AO was justified in making addition under section 69....

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Mere Issue of 2nd notice U/s. 148 does not constitute Change of Opinion; AO can examine genuineness of share premium U/s 68

M/s. Cornerstone Property Investments Pvt. Ltd. Vs Income Tax Officer (ITAT Bangalore)

The assessee, a company stated to be engaged in Real Estate business, filed its return of income for Assessment Year 2008-09 on 30.09.2008 declaring loss of (-) Rs.6,84,051. The assessee filed a revised return on 14.10.2008 declaring loss of (-) Rs.5,23,751. The revised return was processed under Section 143(1) of the Income Tax Act...

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