Case Law Details
ACIT Vs Hasmukhbhai Ravjibhai Ahir (ITAT Surat)
ITAT Surat held that addition under section 68 of the Income Tax Act towards unexplained cash credit unjustified as creditworthiness of the loan giver established and transaction undertaken through banking channel.
Facts- During the course of scrutiny assessment proceedings, AO observed that huge loan of Rs. 1,00,00,000/- has been shown from certain Sh. Ishwarbhai Dayarambhai Patel. There is no creditworthiness of the party. Accordingly, AO treated Rs. 1,00,00,000/- , as cash credit u/s 68 of the Act, as the assessee had not satisfactorily explained the genuineness and creditworthiness of the person who had given the loan.
CIT(A) deleted the addition made by AO. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that the creditworthiness of the loan giver Late Ishwarbhai D. Patel has been established. The transactions in question are through banking channels wherein the loan has been received by the assessee through banking channels and even repaid subsequently through banking channels which proves the genuineness of the transaction. Hence, the ld CIT(A) therefore deleted the addition made by the AO u/s 68 of the Act. On a careful reading of the Ld.CIT(A) order and the findings thereon, we do not find any valid reason to interfere with the decision and findings of the Ld.CIT(A).
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