Case law - Opening balances

[B Tayub]

Whether the ITO can add opening balance in the books stating the loans received in preceding years were not genuine? In the process in addition to adding the opening balances he has disallowed the interest credited in those accounts. whether there is any case law in support of the assessee?

AI Summary

Can an Income Tax Officer add past opening balances as current income and disallow interest on alleged non-genuine loans? A discussion on a forum addresses whether the Income Tax Officer (ITO) can add opening balances to the current year's income, claiming previous loans were not genuine, and disallow the interest credited to those accounts. One participant argues that the ITO's action is incorrect, suggesting that loans and interest should only be considered within the same financial year, and proceedings should follow specific sections. Another participant questions if there is supporting case law. A third participant advises resolving the issue within statutory provisions and questions the ITO's authority to add entries from different years.