Interest-free loans from family, and savings built up over decades. Does the department have to accept that?
Largely, yes, on evidence. Genuineness cannot be doubted merely because the lenders are relatives, particularly where their own returns are produced. Most of a Rs 12.91 lakh addition was deleted; Rs 1 lakh was sustained.
Decided by the ITAT (ITAT Panaji Bench) on 2026-06-30, reported as ITA No. 484/PAN/2025. It bears on section 68 of the Income Tax Act 1961, in Cash Credits & Unexplained Money matters.
This is the ordinary salaried household's version of a s.68 case, and it shows what actually persuades a bench: a documented income history over years, and the lender's own return. Not affidavits.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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A 65-year-old individual filed a return declaring Rs 2.65 lakh. In limited scrutiny the Assessing Officer noticed cash deposits totalling Rs 12.91 lakh during the demonetisation period. The assessee explained these as interest-free loans from relatives of Rs 6 lakh, his wife's savings of Rs 2 lakh and his own accumulated savings of Rs 3 lakh, producing an employment history spanning 24 years and the relatives' income tax returns.
As reported: the Tribunal deleted the addition relating to Rs 6 lakh of interest-free loans from relatives and sustained an addition of only Rs 1 lakh, accepting the balance as explained out of accumulated savings having regard to the assessee's documented income history and age. None of that has been checked against the order, which could not be found in a full-text subscription research database. No paragraph has been read, and whether the Tribunal decided the point itself or restored any part of it to the Assessing Officer is not established.
No paragraph of the order has been read. What was previously set out here — that genuineness cannot be disputed merely because the lenders are relatives where their returns have been produced, that interest-free family loans do not by that fact become unexplained credits, and that 24 years of documented employment and the assessee's age made the accumulated-savings explanation credible for all but Rs 1 lakh — is a reconstruction from that report and cannot be sourced to the order. It should be run as an argument on the facts rather than cited as a holding. What the evidentiary standard actually requires under s.68 is set out at High Court level, on the Revenue's side of the line, in ACIT v. Agrawal Infrabuild (P.) Ltd. [2025] 178 taxmann.com 374/307 Taxman 153 (Chhattisgarh)/[2026] 484 ITR 558, 4 September 2025: the assessee must cumulatively establish identity, creditworthiness and genuineness, and if any one is not proved the addition stands; production of permanent account numbers, returns and bank records is relevant but not conclusive where the surrounding circumstances point the other way (paras 12 and 13, applying Pr. CIT v. NRA Iron & Steel (P.) Ltd. [2019] 103 taxmann.com 48/262 Taxman 74/412 ITR 161 (SC)).
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Handle my notice → Ask a CA on WhatsAppLargely, yes, on evidence. Genuineness cannot be doubted merely because the lenders are relatives, particularly where their own returns are produced. Most of a Rs 12.91 lakh addition was deleted; Rs 1 lakh was sustained. This was decided by the ITAT (ITAT Panaji Bench) and bears on section 68 of the Income Tax Act 1961. It is reported as ITA No. 484/PAN/2025. This is the ordinary salaried household's version of a s.68 case, and it shows what actually persuades a bench: a documented income history over years, and the lender's own return. Not affidavits. If it applies to you, the first step is this: Get each family lender's income tax return for the relevant year, not just a confirmation letter.
A 65-year-old individual filed a return declaring Rs 2.65 lakh. In limited scrutiny the Assessing Officer noticed cash deposits totalling Rs 12.91 lakh during the demonetisation period. The assessee explained these as interest-free loans from relatives of Rs 6 lakh, his wife's savings of Rs 2 lakh and his own accumulated savings of Rs 3 lakh, producing an employment history spanning 24 years and the relatives' income tax returns. The matter was decided on 2026-06-30 by the ITAT (ITAT Panaji Bench). On those facts the ITAT held as follows. As reported: the Tribunal deleted the addition relating to Rs 6 lakh of interest-free loans from relatives and sustained an addition of only Rs 1 lakh, accepting the balance as explained out of accumulated savings having regard to the assessee's documented income history and age. None of that has been checked against the order, which could not be found in a full-text subscription research database. No paragraph has been read, and whether the Tribunal decided the point itself or restored any part of it to the Assessing Officer is not established.
No paragraph of the order has been read. What was previously set out here — that genuineness cannot be disputed merely because the lenders are relatives where their returns have been produced, that interest-free family loans do not by that fact become unexplained credits, and that 24 years of documented employment and the assessee's age made the accumulated-savings explanation credible for all but Rs 1 lakh — is a reconstruction from that report and cannot be sourced to the order. It should be run as an argument on the facts rather than cited as a holding. What the evidentiary standard actually requires under s.68 is set out at High Court level, on the Revenue's side of the line, in ACIT v. Agrawal Infrabuild (P.) Ltd. [2025] 178 taxmann.com 374/307 Taxman 153 (Chhattisgarh)/[2026] 484 ITR 558, 4 September 2025: the assessee must cumulatively establish identity, creditworthiness and genuineness, and if any one is not proved the addition stands; production of permanent account numbers, returns and bank records is relevant but not conclusive where the surrounding circumstances point the other way (paras 12 and 13, applying Pr. CIT v. NRA Iron & Steel (P.) Ltd. [2019] 103 taxmann.com 48/262 Taxman 74/412 ITR 161 (SC)).
It was decided by the ITAT on 2026-06-30 and is reported as ITA No. 484/PAN/2025. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 68, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. As reported: the Tribunal deleted the addition relating to Rs 6 lakh of interest-free loans from relatives and sustained an addition of only Rs 1 lakh, accepting the balance as explained out of accumulated savings having regard to the assessee's documented income history and age. None of that has been checked against the order, which could not be found in a full-text subscription research database. No paragraph has been read, and whether the Tribunal decided the point itself or restored any part of it to the Assessing Officer is not established. It arises in Cash Credits & Unexplained Money matters, on section 68 of the Income Tax Act 1961, and was decided by ITAT Panaji Bench. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Build a savings history from Form 16s or past returns — the length of the record is what makes accumulation credible. Accept that a residual amount may be sustained; a partly-won case is still a large reduction.
Validity check could not be completed. Downgraded from 'good law'. The order could not be found in a full-text subscription research database: three searches were run — the distinctive part of the surname, the full first and middle name, and the appeal number ITA No. 484/PAN/2025 — and none returned it. No later decision applying, following or affirming it was traced, which is unsurprising for an order said to be two months old, but absence of later citation is not good law and neither is absence of contrary authority. The statement previously made here about the successor provision in the Income-tax Act 2025 was not verified in this read and has been removed rather than repeated. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order could not be found in a full-text subscription research database. Three searches were run: the distinctive part of the surname, which returns nothing; the full first and middle name, which returns nothing; and the appeal number ITA No. 484/PAN/2025, which returns two records matched on the numerals alone. The cause title, the Members, the date of 30 June 2026, the assessment year and every figure rest on a single news report, and no paragraph of the order has been read. It is not established whether s.69A was invoked as an alternative, nor whether the Tribunal decided the point or restored any part of it. The sentence previously quoted was that report's rendering rather than language of the order, and has been removed. Treat the citation as unconfirmed and the entry as a secondary report of a fact-specific order. A Tribunal decision, decided on its own facts. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
As reported: the Tribunal deleted the addition relating to Rs 6 lakh of interest-free loans from relatives and sustained an addition of only Rs 1 lakh, accepting the balance as explained out of accumulated savings having regard to the assessee's documented income history and age. None of that has been checked against the order, which could not be found in a full-text subscription research database. No paragraph has been read, and whether the Tribunal decided the point itself or restored any part of it to the Assessing Officer is not established.
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