Bank Credits and Section 68

The Revenue challenged the deletion of an addition of ₹2.49 crore made under Section 68 on account of cash deposits in a bank account. 

The Tribunal affirmed the CIT(A)’s order dated 14.08.2024, holding that the deposits were part of a structured loan mechanism linked to agricultural produce storage and not unexplained income.

The ruling reinforces two key principles: first, that bank statements are not “books of account” for Section 68 purposes; and second, that where a clear transactional nexus exists, gross credits cannot be taxed as income.