Loan transaction

afreen shaikh (143 Points)

25 June 2016

please guide me how to to prove genuineness of loan transaction in income tax

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CA Gyati Gupta (In Practice) (8012 Points)
Replied 25 June 2016

The loan should be disbursed in the borrower bank account and the proceeds from such loan should be applied towards the required purpose i.e. the transaction should be routed in such a way that the bank account should reflect the correct application of funds. The funds should be disbursed to say the supplier of material (in case of cc), or to the supplier of palnt and machinery (in case of Term Loan Facility) etc.