Unexplained investment addition fails where bank records and affidavits explain the source of funds for land purchase.

Where documentary evidence, including bank entries and affidavits, explained the source of funds for purchase of agricultural land, an addition for unexplained investment could not be sustained. The assessee showed that the investment was met through withdrawals and transfers from her son's bank account, and the record reflected that the Assessing Officer had already accepted the cheque transfer component while noting the cash withdrawals. On those facts, the source of the total investment stood explained, so the balance addition was rightly deleted.

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Issues: Whether the addition made on account of unexplained investment in purchase of agricultural land was justified.

Analysis: The assessee claimed that the investment was met through amounts withdrawn and transferred from the bank account of her son, and supported the claim with bank records and affidavits. The record showed that the Assessing Officer had itself accepted the cheque transfer of Rs. 83 lakhs, while also taking note of cash withdrawals of Rs. 45 lakhs. In these circumstances, the source of the total investment stood explained and the balance addition could not be sustained.

Conclusion: The addition for unexplained investment was not justified and its deletion was upheld.

Ratio Decidendi: Where the documentary record, including bank entries and supporting affidavits, explains the source of investment, an addition for unexplained investment cannot be sustained merely by ignoring the accepted transfer component.

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