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| The Tax Publishers2019 TaxPub(DT) 0333 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Where unsecured loan was received by assessee through RTGS and interest paid on outstanding balance in the name of the creditor was accepted by department as genuine, there was no question for doubting the genuineness of the transactions, therefore, addition made by AO was not justified.
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Income from undisclosed source - Addition under section 68 - Receipt of unsecured loan -
AO alleged that assessee had received unsecured loan and required the assessee to verify the identity, capacity, and creditworthiness of the person and genuineness of the transaction. Assessee filed the copy of ledger account and bank statement of lender. AO noticed that there was a deposit entry on the same date just prior to issuance of cheque. He also observed that assessee did not produce the lender and explain the deposit entry in bank account of lender. AO, therefore, made addition under section 68. Held: Assessee had received the amount through RTGS. Further, he had also paid interest on the said loan which was accepted by department since no disallowance was made for the said interest paid to creditor by assessee on which TDS was deducted. It was clear that amount was received by assessee through RTGS and interest paid on outstanding balance in the name of the creditor was accepted by the department as genuine, so there was no question for doubting the genuineness of the transactions, therefore, addition made by AO was not justified.
Relied:Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) : 1995 TaxPub(DT) 1173 (SC), McDowell and Co. v. CIT (1985) 154 ITR 148 (SC) : 1985 TaxPub(DT) 1186 (SC), Cochin State Power & Light Corporation Ltd. v. State of Kerala (AIR 1965 SC 1688, 1691) and Vinod Krishna Kaul v. Union of India (JT 1995 (9) SC 205, 208)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
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