The High Court considered an appeal regarding unexplained cash ...

High Court rules unsecured loan not income under IT Act sec 68 if repaid in FY. Explanation key to avoid tax.

Case Laws     Income Tax

June 29, 2024

The High Court considered an appeal regarding unexplained cash credit u/s 68 of the Income Tax Act. The issue was whether the unsecured loan to the assessee should be treated as income. The court noted that the loan was repaid by the assessee within the financial year. Referring to precedents, the court emphasized that section 68 allows for charging unexplained cash credit as income only if there is no satisfactory explanation. The court clarified that the use of "may" in the provision means that unsatisfactory explanation does not automatically deem the credited amount as income. Consequently, the revenue appeal was found without merit and dismissed.

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