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Issues: Whether the addition made as unexplained investment was sustainable where the assessee produced an unstamped and unregistered loan agreement showing borrowing from his brother, and whether the initial burden under section 68 stood discharged without further enquiry by the revenue.
Analysis: The agreement, though unregistered, was on stamped paper and contained the identity and whereabouts of the creditor. It could not be ignored as lacking all evidentiary value. Since the departmental authorities did not summon the alleged creditor or undertake any verification after the document was produced, the assessee had done enough to discharge the initial burden. The revenue failed to disprove the explanation by making further enquiry under the statutory powers available to it.
Conclusion: The addition of Rs. 7,500 was not justified and was deleted, in favour of the assessee.
Ratio Decidendi: An assessee discharges the initial burden under section 68 by producing a credible document identifying the creditor and the loan, and the addition cannot stand where the revenue makes no further enquiry or summons the creditor to test the explanation.
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