HUF ownership of bank account and explained cash deposits led to deletion of unexplained investment addition.

A cash credit account was held to belong to the HUF rather than the individual assessee, based on the account-opening records, bank confirmation, affidavit, and the explanation for HUF use of the facility. The absence of a HUF PAN at the relevant time did not defeat that claim. Cash deposits were also explained as receipts from Darshan Traders and related business transactions, and the source of funds was accepted from the material on record. On that basis, the addition as unexplained investment was not sustained and the disputed additions were deleted in favour of the assessee.

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Issues: (i) Whether the cash credit account stood in the name of the HUF and not the individual assessee. (ii) Whether the cash deposits in the account could be assessed as unexplained investment under section 69.

Issue (i): Whether the cash credit account stood in the name of the HUF and not the individual assessee.

Analysis: The account-opening and banking material, together with the affidavit and the explanation regarding the HUF's use of the facility, supported the claim that the credit account was maintained for the HUF. The absence of PAN for the HUF at the relevant time and the bank's confirmation regarding the cash credit facility were also relied upon to support the assessee's claim of ownership in the HUF.

Conclusion: The account was accepted as belonging to the HUF and not the individual assessee, in favour of the assessee.

Issue (ii): Whether the cash deposits in the account could be assessed as unexplained investment under section 69.

Analysis: The assessee explained that the deposits represented receipts from Darshan Traders and related business transactions, and the material on record indicated that the source of the deposits had been explained. In view of the acceptance of the HUF account explanation and the supporting evidence regarding the flow of funds, the addition as unexplained investment was not sustained.

Conclusion: The addition under section 69 was deleted, in favour of the assessee.

Final Conclusion: The disputed additions did not survive, and the assessee succeeded in the appeals.

Ratio Decidendi: Where the assessee substantiates the ownership of a bank account and explains the source of deposits with supporting evidence, an addition as unexplained investment cannot be sustained.

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