Section 68 unsecured loan addition fails where identity, creditworthiness and genuineness are proved by primary evidence.

Unsecured loans supported by confirmations, bank statements, income-tax returns, financials, PAN, MCA details and repayment records satisfied the assessee's initial burden under section 68 by establishing the lenders' identity, creditworthiness and the genuineness of the transactions. The loans were routed through banking channels and the lenders' accounts showed no cash deposits before disbursement. As the Assessing Officer produced no cogent material to rebut this evidence or show accommodation entries or lack of capacity, the burden was not discharged by the Revenue. The addition under section 68 was therefore not sustainable and was deleted.

---

---

Issues: Whether the addition made under section 68 in respect of unsecured loans was sustainable when the assessee had furnished confirmations, bank statements, income-tax returns, financials and other supporting material to establish the identity and creditworthiness of the lenders and the genuineness of the transactions.

Analysis: The assessee produced documentary evidence showing the identity of the lender companies, their bank statements, income-tax returns, financials, PAN, MCA details and repayment particulars. The records showed that the loans were routed through banking channels and no cash deposits were found in the lenders' accounts before advancing the money. The Assessing Officer did not bring any contrary material to demonstrate that the transactions were accommodation entries or that the lenders lacked capacity. Once the assessee discharged the initial onus, the burden shifted to the Assessing Officer to rebut the evidence with cogent material, which was not done.

Conclusion: The addition under section 68 was not sustainable and was rightly deleted.

Ratio Decidendi: Where the assessee substantiates a loan transaction with primary evidence establishing identity, creditworthiness and genuineness, and the Assessing Officer fails to dislodge that evidence with material on record, an addition under section 68 cannot be upheld.

---