INCOME TAX ACT, 1961

Section 69D

Income from undisclosed sources - Addition under section 69D - Receipt of cash loan alleged to be in the nature of Hundi loan - Assessee pleading to have received loan through banking channel

Assessee received loans and share application money, in cash. As regards cash loan, AO alleged that these were hand loans received in cash which were in the nature of Hundi loans and assessee had not produced promissory notes, which led to infringement of section 69D and accordingly, AO made addition. Assessee submitted that loans were not received in cash and none of these loans were Hundi loans were received through banking channel and repayments were made along with interest to lenders through account payee cheques. Also, shares of assessee company were allotted to persons who advanced share application money and affidavit was placed on record of Managing Director of assessee company along with Form No. 2 and Annual Returns filed by assessee company with Registrar of Companies MCA.Held: There was merit in contentions of assessee and restored to AO for framing de novo assessment on merits in accordance with law. These amounts stood credited in books of account of assessee and primary onus was on assessee to prove identity of and creditworthiness of creditors and genuineness of transactions through cogent and credible evidences.

REFERRED :

FAVOUR : In assessee's favour (by way of remand).

A.Y. :

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