Unexplained cash credit addition fails where unsecured loan evidence, lender response, tax-deducted interest and repayment remain uncontroverted.

An unsecured loan supported by confirmation, bank statements and other documentary evidence cannot be treated as unexplained cash credit where interest was paid after tax deduction at source, the lender responded to the statutory information notice, and no discrepancy was identified in the evidence. Repayment of the loan further supported the documented transaction. The stated conclusion directs deletion of the addition because the premise that the lender had not complied with the information notice was factually incorrect.

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Issues: Whether the unsecured loan of Rs. 60 lakh could be treated as unexplained cash credit.

Analysis: The loan was supported by confirmation, bank statements and other documentary material. Interest was paid after tax deduction at source, the lender responded to the statutory information notice, and the Assessing Officer identified no discrepancy in the evidence. The loan had also been repaid; consequently, the finding that the lender had not complied with the information notice was factually incorrect.

Conclusion: The loan could not be added as unexplained cash credit; deletion of the addition was directed.

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