Case Law Details
Devki Nandan Maheshwari Vs ACIT (ITAT Delhi)
The case of Devki Nandan Maheshwari vs. ACIT (Income Tax Appellate Tribunal, Delhi) revolves around an appeal concerning the assessment year 2016-17. The appellant, Devki Nandan Maheshwari, challenged the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] regarding additions made under Section 68 of the Income Tax Act, 1961, concerning cash deposits in the lender’s bank account.
The appellant raised several grounds of appeal, primarily contesting the addition of Rs. 36,00,000 under Section 68 of the Income Tax Act, out of a total addition of Rs. 50,00,000. They argued that the CIT(A) erred in confirming this addition despite evidence, facts, and documents available on record. Additionally, they contested the confirmation of proposed interest and argued against the CIT(A)’s decision to ignore Real Time Gross Settlement (RTGS) transactions received by the lender before the loan was provided.
The Tribunal heard both parties’ submissions and examined the case’s materials. The appellant, a proprietor of two businesses, filed their income tax return declaring a total income of Rs. 24,95,020. During the assessment, the Assessing Officer (AO) noted a loan of Rs. 50 lakhs from “Banwari Lal Naresh Kumar.” However, the AO questioned the loan’s credibility due to cash deposits in the lender’s bank account, which served as the immediate source of credit.
The appellant provided documents to prove the loan’s legitimacy, including the lender’s identity, creditworthiness, and transaction genuineness. Despite this, the AO disbelieved the loan and disallowed interest expenses based on Section 68 of the Act.
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