INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Receipt of unsecured loan -

Assessee claimed to have received Rs. 3 crores from one 'A'. AO issued notices under section 131, which remained unanswered. Also, AO required assessee to produce creditor before him but assessee failed to do so and furnished back statement only. Therefore, AO treated loan transaction as not genuine and made addition of loan amount under section 68. Held: On account of failure of assessee to produce any confirmation from alleged creditor and producing the creditor in person before AO for cross-examination, assessee obviously failed to establish even identity of the Creditor, much less the genuineness of the alleged loan transaction. It was not even believable that a person, from whom loan of Rs. 3 Crores was taken, was not even known to assessee and only the banking channels were relied upon to establish genuineness of the so-called transaction, which banking channels could be used even for fake transactions of circulating one's own unaccounted money in fake names. Accordingly, loan amount was rightly added by AO under section 68.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2009-10

SUBSCRIBE FOR FULL CONTENT