Cash deposits linked to disclosed turnover cannot be separately added as unexplained investment when already taxed as business income.

Cash deposits reflected in business records as part of turnover cannot be separately taxed as unexplained investment where the corresponding cash sales were already disclosed and offered as business income. The same receipts had already entered the computation of business income, so treating them again as an addition under section 69 would result in double counting. On the material on record, the deposits were linked to declared business turnover, and the separate unexplained investment addition was therefore deleted.

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Issues: Whether cash deposits treated as unexplained investment under section 69 of the Income-tax Act, 1961 were liable to be added when the corresponding cash sales were already reflected as turnover and offered as business income.

Analysis: The amount deposited in cash was shown in the business records as part of turnover. Once such sales were already taken into account in the computation of business income, a separate addition of the same receipts as unexplained investment would duplicate the same income. On the material placed on record, the cash deposits were linked to the disclosed business turnover, and the addition could not be sustained as a separate unexplained item.

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

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