Suspicion cannot replace proof where accepted cash book entries and unrebutted business explanation support note encashment.

An addition for income from undisclosed sources based on encashment of high denomination notes was deleted where the assessee's cash book entries were accepted and the employee's affidavit and statement explained that theatre collections were handed over in the ordinary course on the next day. In the absence of rebuttal evidence from the Revenue, the explanation of available business cash was treated as reasonably established, and mere suspicion or perceived inconsistency was held insufficient to support the addition. The impugned income addition was therefore set aside in favour of the assessee.

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Issues: Whether the addition of Rs. 9,000 as income from undisclosed sources on account of encashment of high denomination notes was justified.

Analysis: The assessee's cash book entries showing receipt of the notes on the relevant dates were accepted, and the cashier-cum-head booking clerk's affidavit and statement explained that the collections of the theatre business were handed over in the normal course on the next day. The Revenue did not produce rebuttal evidence to discredit the explanation. Mere suspicion arising from perceived inconsistencies in the declaration and the employee's statement was held insufficient to sustain an income addition where the cash availability from business collections was reasonably established.

Conclusion: The addition of Rs. 9,000 was not sustainable and was deleted, in favour of the assessee.

Final Conclusion: The appeal succeeded and the impugned addition made on account of the high denomination notes was set aside.

Ratio Decidendi: An addition cannot be sustained on mere suspicion when the assessee's books and explanation are accepted on record and no rebuttal evidence is produced by the Revenue; suspicion cannot take the place of proof.

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