Addition u/s 68 sustainable on failure to establish genuineness and creditworthiness of lender

Softtouch Cosmetic (Mktg) P. Ltd. Vs ITO (ITAT Ahmedabad)

Held that since the receiver has failed to establish the creditworthiness of the lender and genuineness of the transaction, addition u/s. 68 as unexplained cash credit sustainable.

Facts-

AO noted that the assessee had received a loan of 1,78,66,925/- from M/s S. M. Traders, the proprietary firm of Shri Hareshbhai R. Parmar. The assessee furnished PAN, confirmation of the said party and bank statement of the assessee to prove the identity, genuineness and creditworthiness of the transaction. However, AO held that though the identity of the creditor is established, genuineness of the transaction and creditworthiness of the party is not established and therefore added the amount u/s 68 of the Act.
CIT(A) confirmed the addition. Being aggrieved, the present appeal is preferred.

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