The ITAT Mumbai, in a case involving addition u/s 68 for ...
ITAT held that addition u/s 68 for unexplained cash credit is not justified as loans amount received during the earlier year.
Case Laws Income Tax
May 23, 2024
The ITAT Mumbai, in a case involving addition u/s 68 for unexplained cash credit from loans taken from various parties, held that only loans taken during the current assessment year are relevant for consideration. Continuing loans from earlier years are not relevant for the current assessment year if additions were already made in those years. The genuineness of transactions u/s 68 needs to be proven only for credits recorded in the current assessment year. Repayment of loans taken during the current year demonstrates genuineness. The assessee provided relevant documents to prove transactions, and the AO's reliance on survey reports to analyze creditworthiness was deemed insufficient. The ITAT concluded that loans were taken and repaid through banking channels, and directed the AO to delete the proposed additions. The assessee's ground was allowed.
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