Section 68

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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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, 69, 69A, 69B, 69C and 69D respectively of Income Tax Act, 1961....

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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 tax ability of gift received by an individual or a Hindu Undivided Family (HUF) under Income Tax Act. 1. Monetary Gifts: If […]...

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Tax @ 82.50% even if you received amount via proper banking channels

Income Tax - Yes, in certain case even if assessee received money through proper banking channels still it may attract tax @ 82.50% if assessee could not explain its source, identity and creditworthiness etc of the lender/giver of the amount to the satisfaction of Assessing Officer...

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Mere furnishing of confirmations & PAN not sufficient to prove creditworthiness of creditors

Mayuri Infrastructure (P) Ltd. Vs ITO (ITAT pune) - Mayuri Infrastructure (P) Ltd. Vs ITO (ITAT pune) Mere furnishing of confirmations and PAN are not sufficient to prove the creditworthiness of the creditors. The assessee has to prove financial capacity of the creditors. The assessee was required to furnish evidence that would show financial worth o...

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Addition u/s 68 merely on the basis of Bank Passbook not sustainable

Nanoomal Gupta Vs. ACIT (ITAT Agra) - CIT(A) has erred in confirming the addition wrongly made under section 153A of the Act, without there being any adverse material on record against the assessee; that since the assessee had no business income, no books of account were maintained and the addition was made only on the basis of the asse...

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After rejection of books of accounts AO cannot make Addition U/s. 40A (3) & 68

Deepak Mittal Vs. ACIT (ITAT Delhi) - The facts of the case are that the assessee filed return of income declaring income at Rs.22,52,471/-. The assessee is an individual and engaged in the business of trading/ Distribution of ITC Products under the name and style of M/s. DK Enterprises. On verification of the P & L A/c, audited report ...

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No addition in the hand of Firm for capital introduced by the partner

The Income-tax Officer Vs. M/s. Shree Kastbhanjan Dev Developers (ITAT Ahmedabad) - In the case of The Income-tax Officer vs M/s. Shree Kastbhanjan Dev Developers, the Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) proclaimed in its recent order that firm cannot be assessed for unexplained cash credits in respect of capital introduction by its partner....

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Addition U/s. 68 justified if Genuineness & creditworthiness of donor not proved

Kailash A. Kothari Vs ITO (ITAT Mumbai) - Kailash A. Kothari Vs ITO (ITAT Mumbai) Learned departmental representative submitted that it is abundantly clear that the said donor has no capacity to give the said gift. He submitted that in absence of the cogency of the capacity, mere declaration of gift cannot be accepted as sufficient. He furt...

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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"

Mere furnishing of confirmations & PAN not sufficient to prove creditworthiness of creditors

Mayuri Infrastructure (P) Ltd. Vs ITO (ITAT pune)

Mayuri Infrastructure (P) Ltd. Vs ITO (ITAT pune) Mere furnishing of confirmations and PAN are not sufficient to prove the creditworthiness of the creditors. The assessee has to prove financial capacity of the creditors. The assessee was required to furnish evidence that would show financial worth of the creditors, such as bank statements...

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Addition u/s 68 merely on the basis of Bank Passbook not sustainable

Nanoomal Gupta Vs. ACIT (ITAT Agra)

CIT(A) has erred in confirming the addition wrongly made under section 153A of the Act, without there being any adverse material on record against the assessee; that since the assessee had no business income, no books of account were maintained and the addition was made only on the basis of the assessee’s pass book, which is not a book ...

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After rejection of books of accounts AO cannot make Addition U/s. 40A (3) & 68

Deepak Mittal Vs. ACIT (ITAT Delhi)

The facts of the case are that the assessee filed return of income declaring income at Rs.22,52,471/-. The assessee is an individual and engaged in the business of trading/ Distribution of ITC Products under the name and style of M/s. DK Enterprises. On verification of the P & L A/c, audited report and books of account of the assessee, it...

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No addition in the hand of Firm for capital introduced by the partner

The Income-tax Officer Vs. M/s. Shree Kastbhanjan Dev Developers (ITAT Ahmedabad)

In the case of The Income-tax Officer vs M/s. Shree Kastbhanjan Dev Developers, the Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) proclaimed in its recent order that firm cannot be assessed for unexplained cash credits in respect of capital introduction by its partner....

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Addition U/s. 68 justified if Genuineness & creditworthiness of donor not proved

Kailash A. Kothari Vs ITO (ITAT Mumbai)

Kailash A. Kothari Vs ITO (ITAT Mumbai) Learned departmental representative submitted that it is abundantly clear that the said donor has no capacity to give the said gift. He submitted that in absence of the cogency of the capacity, mere declaration of gift cannot be accepted as sufficient. He further submitted that the bank statement [&...

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Addition U/s. 68 cannot be made for mere no reply of notice U/s. 133(6) by creditors

M/s Kesha Appliances Pvt. Limited Vs. ITO (ITAT Delhi)

Assessee cannot be penalized merely on the ground that the six companies as discussed above failed to reply to the notices issued to them under section 133(6) of the Act....

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Addition U/s 68 justified for Receipts from non-existent broker

Kerala Sponge Iron Ltd. Vs CIT (Kerala High Court)

Assessing officer treated the receipts as unexplained cash credit for the reason that M/s. National Multi Commodity Exchange of India had confirmed that M/s. Vatika Merchants (supra) was expelled from the exchange long prior to the transactions in question. ...

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Bogus purchase: Addition should be of income component only

N.K. Industries Ltd. Vs. Dy. CIT (Gujarat High Court)

During search proceedings certain blank cheques and blank bills were found from assessee’s premises of the parties from whom purchases were made, and AO made addition of entire purchase from these parties, Tribunal was justified in holding that addition of 25% amount as income would suffice....

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Addition U/s. 68 justified if Assessee failed to establish creditworthiness of donors

Pandit Vijay Kant Sharma Vs. CIT (Allahabad High Court)

Where assessee had failed in establishing the creditworthiness of the donors, occasion for making the gifts and why the donors who were strangers and not men of means gifted such huge amounts to the assessee- HUF out of love and affection, therefore, addition made by AO was justified....

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Addition U/s 68 merely for Share capital/ premium for Receipts from companies having registered office at same address not justified

ACIT Vs. NRA Iron & Steel (P) Ltd. & Vice-Versa (ITAT Delhi)

Commissioner (Appeals) therefore, rightly noted that there is no law that more than one Company cannot have its Registered Office at one address. The Companies could have change their address later on. ...

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