No Addition U/s. 68 for RNBC/ Banks despite not proving creditworthiness of depositors if complied with KYC norms

Assessee’s onus in respect of creditworthiness of the depositors is to be tested in the context of the nature of business of the assessee and not divorced therefrom. For any RNBC registered with RBI engaged in the business of mobilizing deposits, it is well nigh impossible to insist on the depositor to submit documents to establish creditworthiness of the prospective depositors before accepting the deposit. Such a stand is against the banking business regulations and would have serious adverse effect on the banking bus

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