Unexplained Money under section 69A fails where credible evidence rebuts ownership and explains cash as belonging to third parties.

Cash found in an assessee's possession can be assessed under section 69A only if the revenue first establishes that the assessee was the owner of unexplained money and that no satisfactory explanation of its nature and source exists. Mere possession creates only a rebuttable presumption of ownership, which may be displaced by credible evidence. Here, the assessee promptly explained that the cash belonged to seven third parties, and that explanation was supported by affidavits, sworn statements, revenue records, and evidence of agricultural receipts. Applying the preponderance of probabilities test, the explanation was accepted and the addition under section 69A was held unsustainable.

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Issues: Whether cash of Rs. 1,05,000 found in the assessee's possession could be assessed as income under section 69A when the assessee asserted that it belonged to seven third parties.

Analysis: Section 69A applies only when the revenue establishes that the assessee was found to be the owner of unexplained money not recorded in the books and that no satisfactory explanation for its nature and source is offered. The deeming fiction under the provision is confined to treating the money as income of the relevant financial year; it does not dispense with the initial burden on the revenue to prove ownership. Possession may raise a rebuttable presumption of ownership under the principle reflected in section 110 of the Evidence Act, but that presumption can be displaced by credible explanation and supporting material. On the facts, the assessee gave a spontaneous explanation at the time of search, named the persons concerned, and that version was corroborated by affidavits, sworn statements, revenue records, and evidence of agricultural receipts. The explanation was accepted on the touchstone of preponderance of probabilities, and there was no material to dislodge it.

Conclusion: The addition under section 69A was not sustainable; the cash was satisfactorily explained as belonging to the seven persons, and the assessee succeeded.

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