Unexplained money addition fails where turnover is extrapolated from isolated survey bills without verifying the books or sales records.

An addition treated as unexplained money under section 69A could not be sustained where it was based only on two survey bills and an extrapolation of turnover for the whole year. The Assessing Officer had not verified the books of the successor firm or the surrounding business records, while the sales registers showed higher declared sales for the relevant dates than the figures relied on. On these facts, the estimate lacked proper evidentiary foundation, and the deletion of the addition was upheld in favour of the assessee.

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Issues: Whether the addition made under section 69A as unexplained money, based on extrapolation of turnover from two bills found during survey, was sustainable.

Analysis: The addition rested on two bills found during survey and the Assessing Officer extrapolated the figures for the entire year without verifying the books of the business carried on by the successor firm. The sales records showed that the declared sales of the successor concern for the relevant dates were higher than the amounts relied upon by the Assessing Officer. On these facts, the estimate had no proper evidentiary foundation and the appellate finding deleting the addition was found to be justified.

Conclusion: The addition under section 69A was not sustainable and the deletion was upheld in favour of the assessee.

Ratio Decidendi: An addition based on estimation and extrapolation from isolated survey material cannot be sustained as unexplained money without proper verification of the books and surrounding business records.

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