Unexplained cash addition fails when assessee proves third-party ownership and Revenue offers no contrary evidence.

Seized cash could not be assessed as unexplained money in the assessee's hands under section 69A where the assessee produced statements, affidavits and supporting material showing that the money belonged to identified third parties who had advanced funds for goat purchases. The Revenue brought no contrary material to disprove ownership, and the addition rested only on presumption and ad hoc estimation of capacity. On that evidentiary record, section 69A was not properly invoked and the addition of unexplained cash was deleted.

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Issues: Whether cash seized from the driver could be assessed as unexplained money in the assessee's hands under section 69A of the Income-tax Act, 1961.

Analysis: The assessee produced statements, affidavits and supporting material to show that the cash belonged to persons stated to have advanced amounts for purchase of goats. Their identity and business activity were established, and there was no contrary evidence to show that the cash belonged to the assessee. The addition had been made only on presumptions and on an ad hoc estimation of capacity, without rejecting the evidence adduced by the assessee on any sound basis.

Conclusion: Section 69A of the Income-tax Act, 1961 was not rightly invoked, and the addition of unexplained cash was deleted in favour of the assessee.

Ratio Decidendi: Once the assessee substantiates that seized cash belongs to third parties and the Revenue brings no material to the contrary, an addition under section 69A cannot rest on conjecture or ad hoc estimation.

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