Unexplained investment under Section 69: an assessee's FIR admission can support addition absent a satisfactory explanation.

An assessee's own admission in an FIR that money was paid for investment in agricultural land can be relevant evidence for treating the amount as unexplained investment under Section 69 of the Income-tax Act, 1961. Where the assessee fails to give a satisfactory explanation of the source and nature of the payment, or to support the claim with accounting evidence, the apparent admission is not displaced. The Revenue is not required to first prove the truth of the FIR version before Section 69 can be applied. The Tribunal and first appellate authority were said to have erred in insisting on such proof, and the matter was remanded for fresh consideration in accordance with law.

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Issues: Whether an assessee's own averment in an FIR that a sum was paid for investment could, in the absence of a satisfactory explanation and supporting evidence, justify addition as unexplained investment under Section 69 of the Income-tax Act, 1961.

Analysis: The assessee had lodged an FIR stating that a large amount had been paid for investment in agricultural land. Such a factual assertion, being in the nature of an admission, could not be ignored merely because the criminal proceedings did not result in a conclusive finding. The relevant question was whether the assessee could satisfactorily explain the source and nature of the payment or show that the FIR version was and unsupported. In the absence of a plausible explanation or accounting evidence, the burden to disprove the apparent admission was not discharged. The Tribunal and the first appellate authority erred in proceeding on the premise that the Revenue had to prove the truth of the FIR before Section 69 could apply.

Conclusion: The addition could not be deleted on the ground that the FIR was unsubstantiated; the issue was answered in favour of the Revenue and the matter was remanded for fresh consideration in accordance with law.

Ratio Decidendi: An assessee's own admission in an FIR regarding payment of money can constitute relevant evidence for Section 69, and unless the assessee offers a satisfactory explanation or proves that the amount was duly accounted for, the sum may be treated as unexplained investment.

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