Unexplained income addition rejected where household expense estimate was excessive and the assessee's explanation was more probable.

An addition for unexplained investment/professional income was disallowed where the assessee's returned income had been accepted in earlier years and showed a progressive increase. The addition rested on an estimate of household expenses and a difference between interest received and annuity deposit refund figures. On the facts, the household expense estimate was found excessive and the stated difference substantially explained the amount added. The assessee's explanation was accepted as the more probable one, so the addition was held not justified and deletion was upheld in favour of the assessee.

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Issues: Whether the addition of Rs. 3,599 as unexplained investment/professional income was justified.

Analysis: The assessee's returned income had been accepted in prior assessment years and her income showed a progressive increase. The addition was based on an estimate of household expenses and on a difference between the figures of interest received and annuity deposit refund. On the facts found, the household expenses estimate appeared excessive, and the difference in figures substantially accounted for the amount added. The explanation offered by the assessee was accepted as the more probable one.

Conclusion: The addition was not justified and its deletion was upheld in favour of the assessee.

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