#Unexplained Cash Credits

ITAT Kolkata rules that prior period expenses crystallising in the current assessment year are deductible under the mercantile system if evidence of crystallisation is furnished. The ruling clarifies that disallowance is unwarranted where the liability becomes certain during the year, impacting tax assessments for businesses with deferred liabilities.

ITAT Pune rules that unsecured loans from family members under Section 68 of the Income Tax Act are valid if identity, genuineness, and creditworthiness up to ₹2.5 lakh are established through bank statements and affidavits. This sets a precedent for taxpayers to defend cash credits from close relatives without tax additions, provided documentary evidence is furnished.