Addition of unsecured loan sustained as genuineness of transaction not established

Chandaka Chinnam Naidu Vs ITO (ITAT Visakhapatnam)

Held that addition of the amount of unsecured loan sustained as the assessee failed to establish the genuineness of the loan transactions except filing the affidavits.

Facts-

Assessing Officer(AO) observed that the assessee has shown unsecured loans of Rs.25,00,000/-, but failed to furnish any documentary evidences in support of identity, credit worthiness and genuineness of the transaction. The claim of unsecured loans by the assessee stood unproved and hence, the AO added the same to the income of assessee, treating the same as income from other sources.

Further, with regard to unexplained capital of Rs. 7,97,500/- AO observed that in the absence of any documentary evidence, it can only be construed that the amount for introduction of fresh capital was met out from unexplained sources made addition under the head ‘income from other sources’.

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