Pr. CIT v. J D Exim (P.) Ltd.: Unexplained cash additions under section 68 cannot be sustained when money was received in a prior financial year.

33. Pr.CIT v. J D Exim (P.) Ltd.:

(2026) 189 taxmann.com 801 (Del.):

A. Y. 2016-17: Date of order 18/08/2026:

S. 68 of the ITA 1961/S. 102 of ITA 2025

Cash Credit — S. 68 — Amount received in F. Y. 2006-07 as advance towards sale of land — Sale deed executed by Power of Attorney holder in F. Y. 2013-14 — Transaction came to knowledge of the assessee in F. Y. 2015-16 — Transaction of sale recorded and reflected in A. Y. 2016-17 — Since there was loss, the capital gain on sale of land was set-off against the capital loss — May be colourable device — However, section 68 cannot be resorted to in A. Y. 2016-17 as the amount was received in F. Y. 2006-07 — Addition under section. 68 in A. Y. 2016-17 cannot be sustained.

During the F. Y. 2006-07, the assessee received `10 crores as advance consideration for sale of land. However, the transaction was not culminated. The power of attorney holder of the assessee executed a sale deed in the F. Y. 2013-14. However, the assessee was not informed about the execution of sale deed by the power of attorney holder. The transaction of sale and the execution of sale deed came to the knowledge of the assessee in F. Y. 2015-16. Since