The Tax Publishers2020 TaxPub(DT) 2870 (Del-Trib) : (2020) 208 TTJ 0564

INCOME TAX ACT, 1961

Section 68

Merely filing Nil return by lender, if sources of loan given to assessee were clearly established with overwhelming evidences of bank statements of all the concerned parties duly supported by annual accounts, could not lead to addition of loan amount in the hands of borrower i.e. assessee under section 68.

Income from undisclosed source - Addition under section 68 - Receipt of unsecured loan - AO doubted creditworthiness of lender on the ground of declaration of nil income

Assessee received unsecured loan from certain party. AO doubted creditworthiness of lender on the ground of lender having delcared nil income for the year.Held: In the balance sheet of the lender, it was apparently shown that there was an unsecured loan received from a related party, i.e., MKT Investments (P) Ltd. and unsecured loan granted to a related party, i.e., assessee. Thus, amount was given to the assessee by lender out of fund from another group company. Therefore, it was not case that lender did not have the source of fund to give loan to assessee. Accordingly, merely filing Nil return by lender, if the sources were clearly established with overwhelming evidences of the bank statements of all the concerned parties duly supported by annual accounts, could not lead to addition in the hands of borrower under section 68.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2016-17



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