Assessee Fails to Prove Genuineness and Creditworthiness: ITAT upholds ₹75.6 Income Tax Disallowance Lakh against Interest on Unsecured Loans

The ITAT (Income Tax Appellate Tribunal) has upheld an income tax disallowance of ₹7.56 lakh against interest on unsecured loans because the assessee failed to prove the genuineness and creditworthiness of the lenders. The tribunal emphasized that merely identifying the source of loans is insufficient; the assessee must also demonstrate that the lenders had the financial capacity to provide the loans and that the transactions were bona fide. This ruling reinforces the strict scrutiny applied to unsecured loans, particularly in cases where the Assessing Officer raises doubts about the legitimacy of the funds.