Genuineness of unsecure loan repaid via banking channel cannot be doubted based on surmises

Amit Tyagi Vs DCIT (ITAT Delhi)

ITAT Delhi held that addition u/s 68 unsustainable as genuineness of transaction routed through banking channel cannot be doubted on the basis of surmises and conjectures based on suspicion and doubts.

Facts- The assessee has preferred the present appeal contesting that CIT(A) has passed order which is bad in law and against the facts of the case as he has erred to confirmed the assessment order by adding loan amount of Rs. 4500000 u/s 68 of the Income-tax Act, 1961 based on utter suspicion and conjectures, which has not been based on any cogent, positive or adverse material against the assessee on record.

Conclusion- Held that that the assessee had paid interest after deducting TDS through banking channels and has also repaid the entire amount of unsecured loan to the respective creditors during subsequent financial period and, in such a situation, the genuineness of transaction routed through banking channel cannot be doubted on the basis of surmises and conjectures based on suspicion and doubts.

In our humble understanding, the assessee has successfully established by way of submission of very important and relevant documentary evidence, the identity, capacity and credit worthiness of lenders/creditors and genuineness of transaction routed through banking channel.

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