The Tax Publishers2020 TaxPub(DT) 4998 (Bang-Trib)

INCOME TAX ACT, 1961

Section 68

Where assessee failed to prove the creditworthiness fully and also the genuineness of cash credit loan taken, addition made under section 68 could not be held as unjustified.

Income from undisclosed sources - Addition under section 68 - Cash credit loan - Failure to prove genuineness and creditworthiness

Assessee, engaged in advertisement agency business, took unsecured loans. AO assessed the same as income under section 68 on the ground that assessee failed to prove the cash credit loan. Against this, assessee contended that it had repaid the loan taken subsequently. Held: It is well-settled principle that the repayment of cash credit would not prove the genuineness of cash credit. It is the responsibility of the assessee to prove three main ingredients, viz., identity of the creditor, creditworthiness of creditor and genuineness of the transaction. In the instant case, the assessee had failed to prove the credit worthiness fully and also the genuineness of the transactions. Accordingly, addition made under section 68 could not be held as unjustified.

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2014-15



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