Income Tax : Learn about unexplained cash credits under Section 68, tax implications, key legal cases, and compliance requirements to avoid pen...
Income Tax : Understand the applicability of Section 68 (cash credit) and Section 69 (unexplained investments) under the Income Tax Act with re...
Income Tax : The Sections by which the assessees are suffering too much due to high pitched assessments passed by NFAC are from 68 to 69D and 1...
Income Tax : Recent Chennai ITAT decisions address unexplained income, underreporting, and penalties under Sections 69A, 68, 270A, and 271. Key...
Income Tax : Learn about penalty provisions under the IT Act, including penalties for defaults in tax payment, income reporting, and more. Key ...
Income Tax : ITAT Bangalore reverses addition of ₹12 lakh under Section 68, accepting sales as the source of cash deposits made during demone...
Income Tax : ITAT Raipur held that penalty under section 271(1)(c) of the Income Tax Act justifiable since no plausible explanation provided fo...
Income Tax : ITAT Delhi held that when the sale consideration as per conveyance deed and circle rates are different, matter must be referred to...
Income Tax : ITAT Jaipur held that addition of the amount already recorded as cash sales cannot be treated as unexplained cash deposits under s...
Income Tax : ITAT Ahmedabad held that addition, treating share application money as unexplained income, based on surmises and conjectures witho...
Income Tax : Assessing Officers should follow the sequence as noted below for applying provisions of section 68 of the Act: Step 1: Whether the...
The question pertains to the purchases made by the assessee-respondent. On account of unverifiable purchases, the Assessing Officer made additions to the tune of Rs. 1.27 crores. He was of the opinion that none of the parties could be located and therefore, such purchases were held to be bogus.
Once loss is determined, the same should be set off against the income determined under any other head of income including undisclosed income. Hon’ble ITAT Ahemdabad Bench in the case of M/s. K.R. Automobiles v/s ACIT in ITA No.1972/Ahd/2012 has held that business loss can be set off against the addition u/s.68 of the Act by observing as follows:-
The assessee is engaged in agricultural and allied activity. This company is one of the group companies constituted by Shri B.Ramalinga Raju and his family members. During the course of scrutiny proceedings, the Assessing Officer called for the books of account of the assessee
In the case of the assessee, summons issued by the Assessing Officer to the shareholder companies were duly served upon them and the shareholder companies responded to the Assessing Officer by affirming the investment made
The assessee is an individual. The return of income was filed on 29.7.2009 declaring an income of Rs. 36,04,069/- and agricultural income of Rs. 10,25,000/-. The assessment was taken up for scrutiny by issuance of notice u/s 143(2) of the Act.
Even if the reopening is sustained, the primary burden that income has escaped assessment is on the shoulder of the assessing officer and after discharging this burden only, the onus shifts to the shoulder of the assessee.
The Hon’ble Supreme Court in the case of CIT Vs. Lovely Exports Pvt. Ltd. (supra), has held that if the share application money is received by the assessee company from alleged bogus shareholders whose names are given to the AO then the department is free to proceed to reopen their individual assessment in accordance with law but it cannot be regarded as undisclosed income of the assessee company.
It is a fact that the assessee is not required to prove the source of source of the amount found credited in the accounts of loan creditors as held by the Hon’ble Delhi High Court in the case of Dwarik Dwarikadhish Investment (P.) Ltd. (supra) and CIT vs. Diamond Products Ltd. (supra).
The Assessing Officer as well as Commissioner of Income tax (Appeal) has failed to determine the correctly the hawala Income. The appellant has issued Bills i.e. Sales Bills to the commercial world i.e. the needy persons. Who has paid the appellant the Hawala Commission.
The share applicants’ lack of resources, the assessee’s position vis-à-vis share amounts received and its commercial condition all pointed to the amount received by it falling within the mischief of Section 68 as unexplained amounts. That the AO or ITAT chose to treat the amount, as bogus share capital, is a matter of inference which the Court would be loath to interfere with.
