Unexplained cash credit rebutted by contemporaneous bank records and loan confirmations, leading to deletion of the addition.

Unexplained cash credit additions can be rebutted where the taxpayer produces contemporaneous bank statements, loan agreements, confirmations from recipient parties and responses to statutory summons demonstrating receipt and subsequent repayment of advances; such documentary evidence establishes genuineness and repayment, negating the basis for an addition under unexplained cash credit. The practical effect is that an assessed addition based solely on unexplained credits will be deleted when the assessee furnishes corroborative transactional and statutory-response records proving advances and their repayment.

---

---

Issues: Whether the addition of Rs. 90,00,000 made as unexplained cash credit under section 68 of the Income-tax Act, 1961 can be sustained where the assessee produced loan agreements, bank statements, confirmations and evidence of repayment from the recipient companies.

Analysis: The assessee produced loan confirmations from the recipient companies, bank statements of the assessee and the recipient companies, copies of income-tax returns and audited financial statements, and responses to notices issued under section 133(6) demonstrating receipt of advances in earlier year and subsequent repayments during the relevant period. The materials on record show opening balances reflecting advances and documentary evidence of repayment transactions in the recipient companies' accounts and in the assessee's bank statements. The contemporaneous confirmations and statutory summons responses corroborate that the amounts were advances from the assessee and subsequently returned.

Conclusion: The addition of Rs. 90,00,000 as unexplained cash credit under section 68 of the Income-tax Act, 1961 is deleted and the appeal is allowed in favour of the assessee.

Ratio Decidendi: Where the assessee produces contemporaneous bank statements, loan agreements, confirmations from recipient parties and responses to statutory summons showing receipt and repayment of advances, such evidence sufficiently establishes genuineness of transactions and repayment, and an addition under the concept of unexplained cash credit cannot be sustained.

---