Section 68

Understaning financial manoeuvring and shell entities

Income Tax - Objective The Author in this article discusses two issues namely: 1) Application of section 68 in case of share application money to the web of intermediaries and 2) how one can-not misuse rule 27 of ITAT rules. Both the issues are based on recent judgements of Mumbai tribunal Structure-: The article gives authors own analysis. […]...

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Section 68 | Unexplained Cash Credit, Investment, Money

Income Tax - Unxeplained Cash Credits, Investment, Money Under Provisions of Income Tax Act, 1961 It is our duty to pay our taxes on time and disclosing all our income in our returns properly. The income of an assessee is governed by the provisions of Income Tax Act, 1961. The Act, 1961 provides various types of exemptions, deductions […]...

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Tax Treatment of cash credit

Income Tax - As per section 68 of the Income Tax Act, any sum found credited in the books of a taxpayer, for which he does not explain the nature and source or the explanation provided by him is not satisfactory by the Assessing Officer is termed as ‘Cash Credit‘. Other provisions to be kept in mind with […]...

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Invocation of Section 68 if Assessee is Opting for Presumptive Taxation

Income Tax - The basic edifice of presumptive scheme u/s 44AD is assessee would not be called to maintain books under the Act and get them audited if profit shown by assessee is otherwise in accordance with prescription of section 44AD of the Act. But maintaining books of account is sine qua non for making addition under section 68. Since […]...

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Genuinity of Transaction is to be proved by Assessee as mere Statutory Approvals doesn’t sanctify Transaction

Income Tax - The Revenue contended that the Appellant has not proved the genuinity and the credit worthiness of the Mauritius company and therefore, the entire share application money was treated as undisclosed income and added to the returned income by applying Section 68 of the Act....

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Genuineness of the transaction is to be proved by the person who substantially asserts the same

ACIT Vs Arihant Kumar Jain (ITAT Delhi) - A transaction needs to be proved to be genuine by the person who substantially asserts the same. Once the assessee has been called upon to prove the genuineness of the trading of the shares leading to LTCG gain, the onus lies upon him which he fails to discharge in the present matter....

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Section 68 addition unsustainable if department accepted factum of repayment

DCIT Vs Singhania Buildcon Pvt. Ltd. (ITAT Raipur) - DCIT Vs Singhania Buildcon Pvt. Ltd. (ITAT Raipur) 1. AO has not made any attempt to rebut the claim of the assessee. The confirmations were filed by the assessee to support the factual position. The assessee has placed the facts which are apparent in nature for which no rebuttal has been done. 2. T...

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Addition for Accommodation Entry not sustainable if no Adverse Finding by AO

DCIT Vs Jaguar Buildcon Pvt. Ltd. (ITAT Delhi) - DCIT Vs Jaguar Buildcon Pvt. Ltd. (ITAT Delhi) We find that there is no dispute that the assessee has received share application money from six companies, out of which, from three companies assessee has received premium for sums aggregating to Rs.103,80,00,000/-. In the case of Ganesh Buildcon Pvt. ...

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ITAT Pune deletes addition for share capital & share premium

DCIT Vs Mahalaxmi TMT Pvt. Ltd. (ITAT Pune) - DCIT Vs Mahalaxmi TMT Pvt. Ltd. (ITAT Pune) AO found that the assessee company was established dated 10 August 2004 i.e. during the financial year 2004-05 corresponding to the assessment year 2005-06 and it did not carry out any business activity till the year under consideration. Conversely, it has...

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Bogus accommodation entry | Vague reasons not justify reopening

Suraj Pulses Pvt. Ltd. Vs PCIT (ITAT Delhi) - Suraj Pulses Pvt. Ltd. Vs PCIT (ITAT Delhi) We find that as far as the reasons recorded, though there is a specific mention about amount of 20,50,000/- received by way of accommodation entry, however neither there is any mention from whom the assessee had received the amount nor what is the nature o...

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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"

Genuineness of the transaction is to be proved by the person who substantially asserts the same

ACIT Vs Arihant Kumar Jain (ITAT Delhi)

A transaction needs to be proved to be genuine by the person who substantially asserts the same. Once the assessee has been called upon to prove the genuineness of the trading of the shares leading to LTCG gain, the onus lies upon him which he fails to discharge in the present matter....

Read More

Understaning financial manoeuvring and shell entities

Objective The Author in this article discusses two issues namely: 1) Application of section 68 in case of share application money to the web of intermediaries and 2) how one can-not misuse rule 27 of ITAT rules. Both the issues are based on recent judgements of Mumbai tribunal Structure-: The article gives authors own analysis. […]...

Read More
Posted Under: Income Tax |

Section 68 | Unexplained Cash Credit, Investment, Money

Unxeplained Cash Credits, Investment, Money Under Provisions of Income Tax Act, 1961 It is our duty to pay our taxes on time and disclosing all our income in our returns properly. The income of an assessee is governed by the provisions of Income Tax Act, 1961. The Act, 1961 provides various types of exemptions, deductions […]...

Read More
Posted Under: Income Tax |

Tax Treatment of cash credit

As per section 68 of the Income Tax Act, any sum found credited in the books of a taxpayer, for which he does not explain the nature and source or the explanation provided by him is not satisfactory by the Assessing Officer is termed as ‘Cash Credit‘. Other provisions to be kept in mind with […]...

Read More
Posted Under: Income Tax |

Section 68 addition unsustainable if department accepted factum of repayment

DCIT Vs Singhania Buildcon Pvt. Ltd. (ITAT Raipur)

DCIT Vs Singhania Buildcon Pvt. Ltd. (ITAT Raipur) 1. AO has not made any attempt to rebut the claim of the assessee. The confirmations were filed by the assessee to support the factual position. The assessee has placed the facts which are apparent in nature for which no rebuttal has been done. 2. The Hon’ble […]...

Read More

Addition for Accommodation Entry not sustainable if no Adverse Finding by AO

DCIT Vs Jaguar Buildcon Pvt. Ltd. (ITAT Delhi)

DCIT Vs Jaguar Buildcon Pvt. Ltd. (ITAT Delhi) We find that there is no dispute that the assessee has received share application money from six companies, out of which, from three companies assessee has received premium for sums aggregating to Rs.103,80,00,000/-. In the case of Ganesh Buildcon Pvt. Ltd., Feelgood Creation Pvt. Ltd., and B...

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ITAT Pune deletes addition for share capital & share premium

DCIT Vs Mahalaxmi TMT Pvt. Ltd. (ITAT Pune)

DCIT Vs Mahalaxmi TMT Pvt. Ltd. (ITAT Pune) AO found that the assessee company was established dated 10 August 2004 i.e. during the financial year 2004-05 corresponding to the assessment year 2005-06 and it did not carry out any business activity till the year under consideration. Conversely, it has issued shares at a premium of […...

Read More

Bogus accommodation entry | Vague reasons not justify reopening

Suraj Pulses Pvt. Ltd. Vs PCIT (ITAT Delhi)

Suraj Pulses Pvt. Ltd. Vs PCIT (ITAT Delhi) We find that as far as the reasons recorded, though there is a specific mention about amount of 20,50,000/- received by way of accommodation entry, however neither there is any mention from whom the assessee had received the amount nor what is the nature of the entry […]...

Read More

Invocation of Section 68 if Assessee is Opting for Presumptive Taxation

The basic edifice of presumptive scheme u/s 44AD is assessee would not be called to maintain books under the Act and get them audited if profit shown by assessee is otherwise in accordance with prescription of section 44AD of the Act. But maintaining books of account is sine qua non for making addition under section 68. Since […]...

Read More
Posted Under: Income Tax |

Genuinity of Transaction is to be proved by Assessee as mere Statutory Approvals doesn’t sanctify Transaction

The Revenue contended that the Appellant has not proved the genuinity and the credit worthiness of the Mauritius company and therefore, the entire share application money was treated as undisclosed income and added to the returned income by applying Section 68 of the Act....

Read More
Posted Under: Income Tax |

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