Unexplained investment in land purchase requires proof of actual consideration; retracted statements without corroboration were insufficient.

Additions for unexplained investment in land purchase could not be sustained on the basis of an alleged higher sale consideration unless the department proved that such consideration actually passed between the parties. The vendor's statements were retracted and, without independent corroboration, were insufficient to support the addition. The assessee was also denied an effective opportunity to test the witnesses through cross-examination. As no material error, misreading of evidence, or perversity in the concurrent findings of the lower authorities was shown, the additions were held unjustified and the issue was answered against the Revenue.

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Issues: Whether additions towards unexplained investment in purchase of land were sustainable on the basis of the alleged higher sale consideration.

Analysis: The core controversy turned on a factual determination of the actual consideration paid for the land. The alleged higher amount could not be brought to tax unless the department established, on reliable material, that such consideration actually passed from the purchaser to the seller. The additions rested mainly on statements of the vendor, but those statements were retracted and were not supported by adequate independent evidence. The assessee was also not given an effective opportunity to test the veracity of the witnesses through cross-examination. No material error, misreading of evidence, or perversity in the concurrent findings of the Commissioner (Appeals) and the Tribunal was shown.

Conclusion: The additions were not justified and the questions were answered against the Revenue.

Ratio Decidendi: An addition for unexplained investment based on alleged higher sale consideration cannot be sustained unless the department proves that the alleged consideration actually passed, and a retracted statement alone, without corroboration, is insufficient.

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