Merely filing bank statement would not prove creditworthiness of creditor and genuineness of transaction: ITAT

M/s U Toll Corporation Ltd. Vs. The Asstt. Commissioner of Income Tax

(Order pronounced on 07/06/2022)

The assessee had taken an unsecured loan in the name of one Munna Kumar of Rs. 30 Lac and in the name of Kumar Nagendra of Rs. 40 Lac. The Assessing Officer made additions under section 68 of the Act in respect of an unsecured loan from two loan creditors of Rs. 40 Lac and Rs. 30 Lac. The Assessing Officer made total addition of Rs. 1 Crore which includes a second loan of Rs. 30 Lac from Kumar Nagendra.

Appeal before CIT(A): This was upheld by CIT(A). The second loan was deleted by the CIT(A) on the ground that this is nothing but a loan taken from Munna Kumar and inadvertently shown in the balance sheet in the name of Kumar Nagendra.

Appeal before ITAT: The assessee has failed to discharge its onus as required under section 68 of the Act to prove the identity of the loan creditor, creditworthiness of the loan creditor, and the genuineness of the transaction.

Since the assessee has not produced any documentary evidence in respect of the unsecured loan of Rs. 30 Lac from Munna Kumar, the tribunal found that the assessee failed to discharge its primary onus to prove the identity and creditworthiness of the loan creditor as well as the genuineness of the transaction. Cash was deposited immediately prior to issuing of D.D. in favour of assessee was found from bank statement.

It was held that merely filing the bank statement by the assessee would not discharge the onus cast upon it to prove the creditworthiness of the loan creditor and genuineness of transaction particularly when the cash was deposited in branches within a short spam of about ten days before issuing a D.D. in favour of the assessee. In the absence of any material brought on record before it to counter the finding of the Assessing Officer as well as the CIT(A), the tribunal did not find any reason to interfere with the impugned order of the CIT(A) qua this issue. Accordingly, the impugned order of the CIT(A) was upheld. In the result, the appeal of the assessee was dismissed.

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