Unexplained credit addition upheld where inconsistent explanations failed to prove the source and character of funds received.

An addition for unexplained credit was sustained where the assessee failed to discharge the onus of proving the source and character of receipts from M/s. Harbhole Enterprise. The assessee also gave inconsistent explanations, first describing the amount as a business loan and later as sale consideration for cloth, without any satisfactory reconciliation. Non-cooperation before the lower authorities and non-appearance before the Tribunal reinforced the absence of credible evidence. On the material available, the credited amount was treated as unexplained, and the addition was upheld against the assessee.

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Issues: Whether the addition of Rs. 2.05 crores as unexplained credit, arising from receipts from M/s. Harbhole Enterprise and the assessee's inconsistent explanations regarding the source and nature of the funds, was liable to be sustained.

Analysis: The assessee did not appear before the Tribunal despite repeated opportunities and had also failed to cooperate before the lower authorities. During assessment, the assessee gave shifting stands, first asserting that the amount was a loan for business activities and later claiming that it represented sale consideration for cloth. No satisfactory explanation was furnished to reconcile these contradictory versions or to explain the receipt of the funds. In these circumstances, the material on record supported the view that the assessee had not discharged the onus regarding the source and character of the credited amount.

Conclusion: The addition of Rs. 2.05 crores was rightly upheld and the issue was decided against the assessee.

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