Source of investment explained through documentary evidence; addition for unexplained house construction funds was found unjustified.

Documentary evidence showing sale proceeds from the assessee's own house and plot, along with loans from LIC, provident fund advances and savings, was treated as sufficient to explain the funds used for residential house construction. The Inspector's estimate was found to lack firm basis, and the additional evidence should have been considered in the interest of justice and fair play. On that footing, the source of investment was held to be properly explained and the addition of Rs. 20,000 as unexplained investment was unjustified, with the issue decided in favour of the assessee.

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Issues: Whether the assessee had satisfactorily explained the source of funds used for construction of the residential house, and whether the addition of Rs. 20,000 as income from undisclosed sources was sustainable.

Analysis: The assessee produced documentary evidence showing sale proceeds of his own house and plot, a loan from the Life Insurance Corporation of India, loans from provident fund advances, and other savings. The evidentiary material was found to be credible and sufficient to explain the investment. The estimate made by the Inspector had no firm basis, and the appellate authority ought to have considered the additional evidence in the interest of justice and fair play.

Conclusion: The source of investment was held to be properly explained and the addition of Rs. 20,000 as unexplained investment was unjustified; the issue was decided in favour of the assessee.

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