Machhabhai Raghavbhai Thunga Bharwadpa Vs ITO (ITAT Rajkot)
The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) heard the assessee’s appeal against the order of the Commissioner of Income Tax (Appeals) dated 24.03.2026 for Assessment Year 2017-18, arising from an assessment made under Section 143(3) of the Income-tax Act, 1961.
The assessee had filed a return declaring total income of Rs.3,01,570. The return was processed under Section 143(1) and the case was subsequently selected for scrutiny under the Computer Assisted Scrutiny Selection (CASS) on the issue of cash deposits during the demonetisation period. During assessment proceedings, the Assessing Officer noticed that the assessee had received an unsecured loan of Rs.9,00,000 from Mrs. Ritu Sharma. Holding that the assessee had failed to establish the genuineness and creditworthiness of the transaction, the Assessing Officer treated the amount as unexplained cash credit under Section 68 and added Rs.9,00,000 to the assessee’s income, assessing the total income at Rs.12,01,570.
The assessee’s appeal before the CIT(A) was dismissed, with the addition being sustained.
Before the Tribunal, the assessee contended that the unsecured loan was genuine and that all necessary documentary evidence had been furnished before the lower authorities. The documents included the lender’s confirmation, PAN, address, bank statements, ledger account in the assessee’s books, the assessee’s bank statement reflecting receipt of the loan, and proof that the loan was repaid through RTGS. The assessee also produced the HDFC Bank sanction letter showing that the lender had obtained a loan of Rs.20,00,000, which was stated to be the immediate source of the funds advanced to the assessee. It was submitted that the identity of the creditor, the genuineness of the transaction and the creditworthiness of the lender stood fully established, thereby satisfying the requirements of Section 68.
