You filed confirmations, PAN, returns and bank statements for every lender. Is that enough?
On these facts, yes, on the section 68 limb. Identity through PAN and Aadhaar, creditworthiness through the lenders' returns and bank records, genuineness through banking channels and TDS on the interest - the burden shifted, no contrary material was produced, and the Rs 1.03 crore addition stayed deleted. Note that the Revenue's appeal was only partly dismissed: it succeeded on a separate ground restoring a Rs 3,27,846 disallowance of late-deposited employees' provident fund contributions.
Decided by the ITAT (ITAT Ahmedabad - Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member); order authored by Dr. B.R.R. Kumar, VP; ITA No. 660/Ahd/2025; AY 2017-18) on 2026-02-03, reported as ITA No. 660/Ahd/2025 (Ahmedabad ITAT), order dated 3 February 2026, assessment year 2017-18. No law report citation traced.. It bears on section 68 of the Income Tax Act 1961, in Cash Credits & Unexplained Money matters.
It is a working checklist. The detail that carried weight beyond the usual paperwork was the TDS on the interest — a fact the department itself created, which is hard to argue with.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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For assessment year 2017-18 the Assessing Officer added Rs 1.03 crore as unexplained cash credit in respect of unsecured loans received by the assessee firm from five parties, holding it had failed to establish the lenders' identity and creditworthiness and the genuineness of the transactions. The assessee had filed confirmations, PAN and Aadhaar copies, income tax returns and bank statements of the lenders.
The Revenue's appeal was partly allowed. On the section 68 ground the Tribunal upheld the deletion of the Rs 1,03,00,000 addition: identity was established through PAN and Aadhaar cards, creditworthiness through the lenders' income tax returns with statements of total income and their bank statements, and genuineness through transactions routed via banking channels and payment of interest after deduction of tax at source, and the Revenue brought no adverse material to controvert the Commissioner (Appeals)'s findings (paras 5.3 and 5.4). Grounds 1 and 2 were accordingly dismissed. Ground 3, a disallowance of Rs 1,66,037 of interest said to relate to borrowings not used for business, was also dismissed. Ground 4 was allowed: a disallowance of Rs 3,27,846 for employees' provident fund contributions deposited late was restored, following the Supreme Court in Checkmate Services (para 7). The appeal was therefore partly allowed (para 8).
Where the assessee produces complete documentation — confirmations, income tax returns, bank statements, PAN details and Aadhaar copies of the lenders — and the Revenue brings no material to the contrary, the statutory burden under s.68 stands discharged and shifts to the Assessing Officer. Unsecured loans cannot be treated as unexplained cash credits when proper substantiation exists; suspicion alone is not a basis for an addition. The receipt of the loans through banking channels and the payment of interest with tax deducted at source further corroborated the genuineness of the transactions.
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Handle my notice → Ask a CA on WhatsAppOn these facts, yes, on the section 68 limb. Identity through PAN and Aadhaar, creditworthiness through the lenders' returns and bank records, genuineness through banking channels and TDS on the interest - the burden shifted, no contrary material was produced, and the Rs 1.03 crore addition stayed deleted. Note that the Revenue's appeal was only partly dismissed: it succeeded on a separate ground restoring a Rs 3,27,846 disallowance of late-deposited employees' provident fund contributions. This was decided by the ITAT (ITAT Ahmedabad - Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member); order authored by Dr. B.R.R. Kumar, VP; ITA No. 660/Ahd/2025; AY 2017-18) and bears on section 68 of the Income Tax Act 1961. It is reported as ITA No. 660/Ahd/2025 (Ahmedabad ITAT), order dated 3 February 2026, assessment year 2017-18. No law report citation traced.. It is a working checklist. The detail that carried weight beyond the usual paperwork was the TDS on the interest — a fact the department itself created, which is hard to argue with. If it applies to you, the first step is this: Collect confirmation, PAN, latest return and the relevant bank statement for every lender, before the reply is due.
For assessment year 2017-18 the Assessing Officer added Rs 1.03 crore as unexplained cash credit in respect of unsecured loans received by the assessee firm from five parties, holding it had failed to establish the lenders' identity and creditworthiness and the genuineness of the transactions. The assessee had filed confirmations, PAN and Aadhaar copies, income tax returns and bank statements of the lenders. The matter was decided on 2026-02-03 by the ITAT (ITAT Ahmedabad - Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member); order authored by Dr. B.R.R. Kumar, VP; ITA No. 660/Ahd/2025; AY 2017-18). On those facts the ITAT held as follows. The Revenue's appeal was partly allowed. On the section 68 ground the Tribunal upheld the deletion of the Rs 1,03,00,000 addition: identity was established through PAN and Aadhaar cards, creditworthiness through the lenders' income tax returns with statements of total income and their bank statements, and genuineness through transactions routed via banking channels and payment of interest after deduction of tax at source, and the Revenue brought no adverse material to controvert the Commissioner (Appeals)'s findings (paras 5.3 and 5.4). Grounds 1 and 2 were accordingly dismissed. Ground 3, a disallowance of Rs 1,66,037 of interest said to relate to borrowings not used for business, was also dismissed. Ground 4 was allowed: a disallowance of Rs 3,27,846 for employees' provident fund contributions deposited late was restored, following the Supreme Court in Checkmate Services (para 7). The appeal was therefore partly allowed (para 8).
Where the assessee produces complete documentation — confirmations, income tax returns, bank statements, PAN details and Aadhaar copies of the lenders — and the Revenue brings no material to the contrary, the statutory burden under s.68 stands discharged and shifts to the Assessing Officer. Unsecured loans cannot be treated as unexplained cash credits when proper substantiation exists; suspicion alone is not a basis for an addition. The receipt of the loans through banking channels and the payment of interest with tax deducted at source further corroborated the genuineness of the transactions.
It was decided by the ITAT on 2026-02-03 and is reported as ITA No. 660/Ahd/2025 (Ahmedabad ITAT), order dated 3 February 2026, assessment year 2017-18. No law report citation traced.. 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 helps the taxpayer. The Revenue's appeal was partly allowed. On the section 68 ground the Tribunal upheld the deletion of the Rs 1,03,00,000 addition: identity was established through PAN and Aadhaar cards, creditworthiness through the lenders' income tax returns with statements of total income and their bank statements, and genuineness through transactions routed via banking channels and payment of interest after deduction of tax at source, and the Revenue brought no adverse material to controvert the Commissioner (Appeals)'s findings (paras 5.3 and 5.4). Grounds 1 and 2 were accordingly dismissed. Ground 3, a disallowance of Rs 1,66,037 of interest said to relate to borrowings not used for business, was also dismissed. Ground 4 was allowed: a disallowance of Rs 3,27,846 for employees' provident fund contributions deposited late was restored, following the Supreme Court in Checkmate Services (para 7). The appeal was therefore partly allowed (para 8). It arises in Cash Credits & Unexplained Money matters, on section 68 of the Income Tax Act 1961, and was decided by ITAT Ahmedabad - Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member); order authored by Dr. B.R.R. Kumar, VP; ITA No. 660/Ahd/2025; AY 2017-18. 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. If interest was paid, show the TDS return and Form 16A — it independently evidences a real loan. Where a lender's own balance is thin, expect creditworthiness to be tested; be ready with their source.
Searched for later treatment; none was found. That is not the same as a source affirming it. The order has now been read in full at https://indiankanoon.org/doc/72805813/ and the earlier note recording that it could not be located is withdrawn. Confirmed from the order itself: ITA No. 660/Ahd/2025, DCIT Circle 3(1)(1), Ahmedabad v. Techno Industries, assessment year 2017-18, heard 27 November 2025 and pronounced 3 February 2026, before Dr. B.R.R. Kumar (Vice-President), who authored it, and Siddhartha Nautiyal (Judicial Member); the Rs 1,03,00,000 addition under section 68 on unsecured loans from five parties was deleted by the Commissioner (Appeals) and that deletion was upheld, the Revenue's grounds 1 and 2 being dismissed. The disposal is a partial one: the Revenue also lost ground 3, a disallowance of Rs 1,66,037 of interest, but succeeded on ground 4, where a disallowance of Rs 3,27,846 for employees' provident fund contributions deposited late was restored on the Supreme Court's decision in Checkmate Services, so the appeal was partly allowed. What could not be added remains what could not be added before: no law report citation for this order was traced, so no citator could be run and no later treatment could be looked for, and no appeal to the High Court was found, which is what one would expect of an order some months old rather than evidence that none exists. The status therefore stays unverified. On the provision, the Finance Act 2022 amendment requiring the creditor to explain its own source applies from assessment year 2023-24 onwards, so this order applies the pre-amendment section 68; the amendment is of 2022 and the order of 2026, so the entry is not superseded by it, but its three-limb reasoning does not answer the source-of-source requirement for a current year. 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 has now been read in full at indiankanoon and the earlier note recording that it could not be located is withdrawn. Confirmed from the order: ITA No. 660/Ahd/2025, assessment year 2017-18, pronounced 3 February 2026, DCIT Circle 3(1)(1) Ahmedabad against Techno Industries, before Dr. B.R.R. Kumar (Vice-President), who authored it, and Siddhartha Nautiyal (Judicial Member) - the Judicial Member's name was previously misspelt here. No law report citation was traced, so the appeal number remains the only citation. Three things a reader should carry. The appeal was partly allowed, not dismissed: the Revenue lost grounds 1 to 3 but won ground 4, where a disallowance of Rs 3,27,846 under section 36(1)(va) read with section 2(24)(x) for late deposit of employees' provident fund contributions was restored on the Supreme Court's decision in Checkmate Services. That limb is not tagged in the sections list, which is confined to the section 68 point this entry is about. And paragraph 5.3 of the order lists five lenders totalling Rs 1,30,00,000 while the addition was Rs 1,03,00,000; the order does not reconcile the two figures. On the provision, the assessment year was 2017-18, so the order applies the pre-amendment section 68; the Finance Act 2022 source-of-source requirement operates from assessment year 2023-24 and the order is not superseded by it. The assertion made elsewhere that section 102 of the Income-tax Act 2025 hard-codes the source-of-source requirement was not verified against the text of that section and should not be relied on. The order does not state whether the lenders were related to the partners. A Tribunal decision, 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.
The Revenue's appeal was partly allowed. On the section 68 ground the Tribunal upheld the deletion of the Rs 1,03,00,000 addition: identity was established through PAN and Aadhaar cards, creditworthiness through the lenders' income tax returns with statements of total income and their bank statements, and genuineness through transactions routed via banking channels and payment of interest after deduction of tax at source, and the Revenue brought no adverse material to controvert the Commissioner (Appeals)'s findings (paras 5.3 and 5.4). Grounds 1 and 2 were accordingly dismissed. Ground 3, a disallowance of Rs 1,66,037 of interest said to relate to borrowings not used for business, was also dismissed. Ground 4 was allowed: a disallowance of Rs 3,27,846 for employees' provident fund contributions deposited late was restored, following the Supreme Court in Checkmate Services (para 7). The appeal was therefore partly allowed (para 8).
TaxSphere, “DCIT v Techno Industries”, https://taxnotice.vittsphere.com/caselaw/case/dcit-v-techno-industries/ (validity last checked 2026-08-23)
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The Assessing Officer rejected my explanation for cash credits. Must he then prove where the money actually came from before taxing it?
Additions were made to my book profits in earlier years. Can I use that money to explain a cash credit or an unexplained payment in a later year?
I made unexplained investments after the close of my accounting year. Which year can the officer tax them in, and can he reopen an earlier year to do it?
A fixed deposit stands in the name of a partner's son and my firm used it as security for its overdraft. The Assessing Officer says the money is really the firm's concealed income. Who has to prove what?
