Section 68

Tax Treatment of Gifts Received By an Individual or HUF

Income Tax - A very common and frequent question running in the mind of taxpayers is the tax ability of gifts. In this part, an effort has been made to discuss the various provisions relating to taxability of gift received by an individual or a Hindu Undivided Family (HUF) under Income Tax Act. 1. Monetary Gifts: If the […]...

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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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Sales bogus if investee is a penny stock company, with no credentials, and the sale rates artificially hiked, with no real buyers

Bhagwatiben Vinodkumar Surani Vs ITO (ITAT Ahmedabad) - (a) The scrip is a penny stock, purchased at a low price, which is over a period of time ramped up by operators acting in benami names or name lenders. The purchases are off market purchases, and not reported on the exchange; (b) purchase/s is back dated, i.e., per a back dated contract note, pai...

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Section 68 addition justified for unexplained LTCG from penny stock

Bhagwatiben Vinodkumar Surani Vs ITO (ITAT Ahmedabad) - Addition of long-term capital gain against an investor who invested in a penny stock company in connection with the penny stock scam involving Rs. 36,000 Crores was upheld as additions made on account of detailed enquiries being carried out by Kolkata Investigation Directorate with regard to 84 penn...

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Section 68 not applicable to Share Purchase against Issuance of Share

ITO Vs Pansu Commercial Pvt. Ltd. (ITAT Kolkata) - This is a simple case of acquiring shares of certain companies from certain shareholders without paying any cash consideration and instead the consideration was settled through issuance of shares to the respective parties. Hence, we hold that provision of section 68 of the Act are not applicable in ...

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No section 68 addition for loan transaction with father on mere suspicion

Girish Madhukar Rathi Vs DCIT (ITAT Pune) - The issue under consideration is that confirming the addition made u/s 68 by A.O. in respect of the loan taken from father of the appellant on mere suspicion....

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Section 68 applies only to unexplained credit entries without proper explanation

K N R Roofing Pvt. Ltd. Vs ACIT (ITAT Bangalore) - ITAT are of the view that u/s. 68 of the Act, it is only the credit entry appearing in the books of account of an assessee for the relevant previous year, that can be treated as unexplained cash credit in the absence of proper explanation by the assessee...

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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"

Sales bogus if investee is a penny stock company, with no credentials, and the sale rates artificially hiked, with no real buyers

Bhagwatiben Vinodkumar Surani Vs ITO (ITAT Ahmedabad)

(a) The scrip is a penny stock, purchased at a low price, which is over a period of time ramped up by operators acting in benami names or name lenders. The purchases are off market purchases, and not reported on the exchange; (b) purchase/s is back dated, i.e., per a back dated contract note, paid for in cash, so that there is no trail...

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Section 68 addition justified for unexplained LTCG from penny stock

Bhagwatiben Vinodkumar Surani Vs ITO (ITAT Ahmedabad)

Addition of long-term capital gain against an investor who invested in a penny stock company in connection with the penny stock scam involving Rs. 36,000 Crores was upheld as additions made on account of detailed enquiries being carried out by Kolkata Investigation Directorate with regard to 84 penny stocks company as well as SEBI and no ...

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Section 68 not applicable to Share Purchase against Issuance of Share

ITO Vs Pansu Commercial Pvt. Ltd. (ITAT Kolkata)

This is a simple case of acquiring shares of certain companies from certain shareholders without paying any cash consideration and instead the consideration was settled through issuance of shares to the respective parties. Hence, we hold that provision of section 68 of the Act are not applicable in the instant case and accordingly the ent...

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Bogus Capital Gain: No adverse inference could be drawn against assessee on the basis of untested statements without allowing opportunity of cross-examination

Shankar Lal Daruka Vs ITO (ITAT Kolkata)

We note that the fact that neither the statement relied on by the authorities below were provided to the assessee nor any cross examination was allowed to prove the veracity of the statement. We note that the fact that in the statement of third party, the name of the assessee was not implicated. Even otherwise, according to Learned Counse...

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No section 68 addition can be made for non-recording of Statement on Oath by mere one Person

Prerna Developers Vs ITO (ITAT Ahmedabad)

Where out of 14 persons, 13 persons have duly confirmed the booking advances made to assessee and their creditworthiness was also examined by AO but no negative inference was drawn by him, no addition could be made under section 68 just because one person who had only advanced an meager amount, had not recorded the statement under oath as...

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No section 68 addition for loan transaction with father on mere suspicion

Girish Madhukar Rathi Vs DCIT (ITAT Pune)

The issue under consideration is that confirming the addition made u/s 68 by A.O. in respect of the loan taken from father of the appellant on mere suspicion....

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Section 68 applies only to unexplained credit entries without proper explanation

K N R Roofing Pvt. Ltd. Vs ACIT (ITAT Bangalore)

ITAT are of the view that u/s. 68 of the Act, it is only the credit entry appearing in the books of account of an assessee for the relevant previous year, that can be treated as unexplained cash credit in the absence of proper explanation by the assessee...

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No Section 68 Addition for issue of Shares on Premium in lieu of shares

Blooming Tradelink Pvt. Ltd. Vs ITO (ITAT Kolkata)

The sole issue involved in this appeal of assessee is against the action of Ld. CIT(A) in confirming the addition of Rs.5,01,00,000/- made by AO u/s. 68 of the Income-tax Act, 1961 (hereinafter referred to as the Act) on account of bogus share capital including share premium...

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Assessee not required to explain sources of money provided by creditor

Gaurav Triyugi Singh Vs ITO (Bombay High Court)

The assessee is only required to explain the source of the credit. There is no requirement under the law to explain the source of the source. The fact that the source of the source is suspect and that the creditor had no regular source of income to justify the advancement of the credit to the assessee does not mean that an addition can be...

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Credit worthiness cannot be doubted merely for meager income | Section 68 | Bogus share capital

PCIT Vs Ami Industries (India) P Ltd (Bombay High Court)

The assessee had furnished PAN, copies of the income tax returns of the investors as well as copy of the bank accounts in which the share application money was deposited in order to prove genuineness of the transactions. In so far credit worthiness of the creditors were concerned, the bank accounts of the investors showed that they had fu...

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