Unexplained investments cannot be taxed again when traced to disclosed firm receipts and partner withdrawals.

Additions for unexplained investments were held unsustainable because the amounts were traced to the assessee firm's unrecorded receipts disclosed under a voluntary disclosure scheme and then distributed to the partners. The revenue material showed that the funds were available with the firm and had been withdrawn by the partners, so the same income could not be taxed again as unexplained investments in the assessee's hands. The additions for both assessment years were deleted.

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Issues: Whether the additions made on account of alleged unexplained investments could be sustained when the amounts were referable to unrecorded receipts of the assessee's firm and the funds withdrawn by the partners.

Analysis: The amounts found by the revenue were traced to the firm's unrecorded receipts disclosed in the voluntary disclosure scheme. The material showed that the sums had been distributed to the partners, and the availability of those funds could not be denied. On that footing, the same income could not be brought to tax again in the assessee's hands as unexplained investments.

Conclusion: The additions for both assessment years were not sustainable and were deleted in favour of the assessee.

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