Unexplained money addition failed where saree sale receipts were supported by invoices, bank records and purchaser verification.

Sale proceeds from saree transactions could not be treated as unexplained money under section 69A where the assessee supported the receipts with ledger entries, invoices, bank details and ledger extracts, and the purchaser complied with notice under section 133(6). The Inspector's verification also confirmed the purchaser's existence at the stated premises, and the receipts were routed through banking channels with no material showing cash movement or rebutting the transaction evidence. The addition was therefore deleted, and the assessee's disclosed turnover could not be ignored without proper adjustment to the returned income.

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Issues: Whether the sale proceeds from saree transactions could be treated as unexplained money under section 69A of the Income-tax Act, 1961.

Analysis: The assessee's sales were supported by ledger entries, the purchaser responded to notice under section 133(6) of the Income-tax Act, 1961, and furnished invoices, bank details and ledger extracts. The Inspector's verification also supported the existence of the purchaser at the stated premises. The receipts were through banking channels, and there was no material to show cash movement or to rebut the transaction evidence. The assessee had also been filing returns under section 44AD of the Income-tax Act, 1961, and the addition was made without properly adjusting the disclosed turnover.

Conclusion: The receipts could not be treated as unexplained money under section 69A of the Income-tax Act, 1961, and the addition was rightly deleted in favour of the assessee.

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