Accommodation entry and unexplained cash credit principles upheld where loan documentation, creditworthiness and repayment proof were lacking.

Unsecured loan received through banking channels was treated as an accommodation entry rather than a genuine loan because the surrounding investigation material showed the lender to be part of a shell-entity network with negligible business activity, poor creditworthiness and non-traceable presence. The assessee's confirmations, PAN and bank statement were not enough, as no loan agreement or commercial terms were produced and repayment was shown only after reassessment. The primary onus under section 68 was therefore held undischarged, and the separate objection based on non-furnishing of statements and denial of cross-examination failed because the addition rested on independent investigation material. The additions under sections 68 and 69C were upheld.

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Issues: Whether the unsecured loan of Rs. 10,00,000 received from the lender was a genuine transaction or an accommodation entry warranting addition under section 68, with consequential addition of commission under section 69C.

Analysis: The assessee had received the amount through banking channels and furnished confirmation, PAN and bank statement. However, the record also contained coordinated investigation material showing that the lender formed part of a network of shell entities used for accommodation entries, with negligible business activity, poor creditworthiness and non-traceability at the recorded address. The assessee did not produce any loan agreement or commercial terms, did not demonstrate repayment during the relevant period, and repaid the amount only after the reassessment had already been completed. In these circumstances, the primary onus under section 68 was held to remain undischarged. The challenge based on non-furnishing of statements and denial of cross-examination also did not succeed, because the addition was sustained on the independent evidentiary material gathered during investigation.

Conclusion: The addition of Rs. 10,00,000 under section 68 and the consequential addition of Rs. 30,000 under section 69C were upheld.

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