Unexplained deposit treatment requires evidence beyond suspicion when the assessee's source explanation is supported by affidavit and cheque trail.

A deposit received by the assessee was supported by the creditor's affidavit and an explanation that the funds came from a bank loan against fixed deposits and were paid by cheque. Although the surrounding circumstances appeared suspicious, suspicion alone was not sufficient to treat the amount as the assessee's income. In the absence of further evidence contradicting the explanation, rejection of the assessee's evidence was unjustified, and the addition as unexplained was deleted.

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Issues: Whether the sum of Rs. 15,000 received by the assessee as a deposit was liable to be treated as unexplained.

Analysis: The deposit was supported by the creditor's affidavit and by the explanation that the amount had been raised through a bank loan against fixed deposits and paid to the assessee by cheque. Although the surrounding circumstances appeared suspicious, suspicion by itself was held insufficient to conclude that the amount belonged to the assessee. In the absence of any further evidence to contradict the assessee's explanation, rejection of that evidence was found to be unjustified.

Conclusion: The amount could not be treated as unexplained and the addition was deleted in favour of the assessee.

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