Loan Credit Dispute

At its core, the dispute reflects a classic misapplication of Section 68, where the Assessing Officer, driven by suspicion around group transactions and alleged layering, overlooked the basic accounting reality that the impugned amount represented repayment of an earlier loan rather than a fresh credit.

The Tribunal decisively rejected this approach, holding that jurisdiction under Section 68 cannot be triggered on mischaracterised entries, and further emphasized that once identity, genuineness, and creditworthiness are established through documentary evidence, procedural deficiencies such as non-appearance of directors lose significance.

Crucially, the ruling anchors itself in the doctrine of consistency, aligning with prior year adjudication involving the same lender and transaction chain.