https://www.taxtmi.com/caselaws?id=443223 The HC upheld the ITAT's decision favoring the assessee, noting that the assessee failed to prove the creditor's identity and genuineness of transactions under s. 68. However, since the loan amount was returned within the year through banking channels, the addition was not justified. The court emphasized that under s. 68, unexplained cash credits may be taxed as income, but the use of "may" rather than "shall" means such credits are not automatically deemed income if the explanation is unsatisfactory. The ruling aligned with SC precedent clarifying that unsatisfactory explanations do not mandate treating the amount as income. Consequently, the penalty under s. 271(1)(c) and addition under s. 68 were not upheld. en-us Tue, 22 Aug 2023 00:00:00 +0530 Wed, 13 Aug 2025 17:39:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=443223 The HC upheld the ITAT's decision favoring the assessee, noting that the assessee failed to prove the creditor's identity and genuineness of transactions under s. 68. However, since the loan amount was returned within the year through banking channels, the addition was not justified. The court emphasized that under s. 68, unexplained cash credits may be taxed as income, but the use of "may" rather than "shall" means such credits are not automatically deemed income if the explanation is unsatisfactory. The ruling aligned with SC precedent clarifying that unsatisfactory explanations do not mandate treating the amount as income. Consequently, the penalty under s. 271(1)(c) and addition under s. 68 were not upheld. Case-Laws Income Tax Tue, 22 Aug 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=443223