Sidhi Vinayak Foundation Vs ITO (ITAT Delhi)
ITAT Delhi Restores Section 68 Addition: Bank Statement Sufficient to Prove Creditworthiness
The Delhi SMC Bench of the ITAT allowed the appeal of Sidhi Vinayak Foundation (AY 2018-19) for statistical purposes and set aside the order of the NFAC/CIT(A) confirming addition of ₹16 lakh under section 68 in respect of an unsecured loan.
The assessee-society, engaged in running an educational institution, had received an unsecured loan from Shri Chander Hash, a Chartered Accountant and partner in a firm. During assessment, the AO accepted the identity and genuineness of the transaction but doubted the creditworthiness of the lender solely because the assessee could not furnish the statement of affairs of Shri Chander Hash, who was critically ill during the relevant period.
The Tribunal observed that:
- The assessee had already furnished PAN, ITR, computation of income and bank statements of the lender.
- The authorities below did not examine the bank statement at all, despite it being on record.
- There was no allegation of cash deposits immediately prior to advancing the loan.
Holding that examination of the lender’s bank statement is sufficient to establish creditworthiness, the ITAT restored the matter to the AO with a limited direction to verify whether:
