Delhi High Court upholds Section 68 Addition for Unproven Loan Creditworthiness

Raj Pal Katyal challenged the addition of ₹7 lakh representing unsecured loans allegedly received from four individuals. Although the loans were supported by explanations and certain documentary evidence, the creditors either denied advancing the loans or could not satisfactorily explain the source of funds. Applying the Supreme Court’s principles in CIT v. NRA Iron & Steel (P) Ltd., the Delhi High Court held that identity alone was insufficient without proof of creditworthiness and genuineness. The appeal was dismissed.