Cash credit additions require direct evidence linking the assessee to the disputed entry; unsupported inference cannot stand.

Cash credit in a third party's accounts could not be treated as the assessee's undisclosed income without direct, reliable evidence linking the assessee to the disputed entry. The record showed that the credits originated from the same person through an intermediary, and there was no sound basis to isolate one entry as a separate lending transaction by the assessee. On the evidence as a whole, the fact-finding conclusion was unsupported by relevant material and could not stand; the addition was therefore not justified and was answered in favour of the assessee.

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Issues: Whether the addition of Rs. 10,000 as undisclosed income of the assessee, based on the cash credit standing in the name of the assessee in a third party's accounts, was supported by relevant materials and evidence.

Analysis: The material on record did not establish any direct link between the assessee and the disputed cash credit. The statements of the debtor showed that all the credits came from the same person through an intermediary, and there was no reliable basis to isolate the disputed entry and attribute it to a separate lending transaction by the assessee. The Tribunal's conclusion rested on insufficient material and could not be sustained when tested against the evidence as a whole. In such a situation, the court was entitled to interfere with a fact finding conclusion that was unsupported by relevant evidence.

Conclusion: The finding that the sum of Rs. 10,000 represented the assessee's undisclosed income was not justified on the materials on record and was answered in the negative, in favour of the assessee.

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